INSIGHT · RISK & FINANCIAL VISIBILITY

When a builder goes into liquidation,
the creditor process is national. The cover is not.

25 October 2026

When a building company enters liquidation or voluntary administration, the creditor process runs under the Corporations Act, and ASIC states unsecured creditors cannot begin or continue claims without permission. The homeowner's cover is state law. As read on 25 October 2026, the NSW, SA and ACT Acts and the NT Act name the builder's insolvency, death or disappearance; WA adds a cancelled registration; Queensland's terms of cover need insolvency and a cancelled licence, or a valid termination; Victoria's scheme, for insurable contracts entered into from 1 July 2026, turns on incomplete, defective or non-compliant work.

An empty concrete building floor seen through a chain-link fence

Analysed 25 October 2026 · ASIC information sheets INFO 45, INFO 74 and INFO 54, each reissued June 2023 · Home Building Act 1989 (NSW), archived copy of 18 January 2026, and icare HBCF pages · Building Act 1993 (Vic), Authorised Version 152 as at 16 September 2026 · QBCC Act 1991 and QBCC Regulation 2018 (Qld) · Building Work Contractors Act 1995 (SA), version 15.1.2026 · Home Building Contracts Act 1991 (WA), as at 5 April 2023 · Building Act 2004 (ACT), Republication 56 · Building Act 1993 (NT), as at 10 February 2026 · the eight security of payment Acts · all read 25 October 2026.

Key takeaways

The creditor process is the same in every state: ASIC's INFO 74 states that during a voluntary administration unsecured creditors cannot begin, continue or enforce their claims against the company without the administrator's consent or the court's permission. INFO 45 states that after a company goes into liquidation, unsecured creditors cannot commence or continue legal action against it unless the court permits.
The insurance trigger is worded differently in each state: NSW s 99, SA s 35, the ACT s 90 and the NT s 54C name insolvency, death or disappearance (the NT adds bankruptcy and a registration that ceased for a prescribed reason). WA s 25D adds a builder that ceased to exist and a registration cancelled or not renewed for failing financial requirements. Queensland's Schedule 6 s 4 needs insolvency and a cancelled licence, a valid termination on default, death, or a company that no longer exists.
Victoria's new scheme is not built on insolvency: Part 9A of the Building Act 1993 applies to work under an insurable domestic building contract entered into on or after 1 July 2026, when it commenced (s 318A(1)(a)). Section 137K entitles a building owner to assistance for loss from domestic building work that is incomplete, defective or non-compliant, subject to the Part and the regulations. The regulations were not read, and the insurance terms for earlier contracts are not verified.
Two security of payment Acts address liquidation, and both are about the claimant: NSW s 32B and WA s 68 state that a corporation in liquidation cannot serve a payment claim or take action under the Part to enforce one, and that a pending adjudication application is taken to be withdrawn. Apart from the NT's implied terms on unfixed goods where a principal becomes insolvent (s 23), no provision on a payment claim or adjudication against a respondent in liquidation or administration was found in the eight Acts read. Insolvency does appear in trust provisions, for example Queensland BIF Act s 53B(1)(b) and WA s 86(b).
We would record the appointment, not just the debt: A system-design recommendation: on the day a counterparty enters administration, the record holds the appointment type and date, the ACN, the appointee, amounts owed each way, retention held, security registrations and the proof of debt deadline once notified.

Home warranty cover, deposits,
security of payment and trusts, by state

Warranty cover, deposit limits, security of payment and trusts sit in different Acts in each state, at different versions.

Each Act states what a policy or scheme must cover. Whether a particular claim is accepted depends on the policy or the terms of cover, a matter for the insurer or scheme.

State	Warranty or insurance trigger	Deposit	Security of payment Act and insolvency	Retention or project trust	Instrument and version read
NSW	Insurance must cover non-completion and loss of warranty rights because of the contractor's insolvency, death or disappearance (s 99(1)). The policy must deem a licence suspended under s 42A, for an unsatisfied building claim order, to be the contractor's insolvency (s 101(1)); icare lists this as a licence suspended for not complying with a court or NCAT money order	Maximum deposit 10% of the contract price (s 8(1)); icare lists loss of deposit as covered	A corporation in liquidation cannot serve or enforce a payment claim; a pending adjudication application is taken to be withdrawn (SOP Act s 32B, snapshot of 23 January 2026)	Section 12A lets regulations require retention money trust accounts; the regulation was not read. Not verified (25 October 2026)	Home Building Act 1989, snapshot of 18 January 2026, and icare pages, read 25 October 2026; s 8 read 9 October 2026
Victoria	Part 9A, for insurable contracts entered into on or after 1 July 2026 (s 318A(1)(a)): assistance for loss from work that is incomplete, defective or non-compliant, subject to the Part and regulations (s 137K); provided by the Authority (s 137M). Earlier contracts: insurance terms not verified (25 October 2026)	Deposit limit 5% of a contract price of $20,000 or more, 10% below (DBCA s 11(1))	No liquidation provision found	No trust provision found; recourse to a performance security, including retention, needs a notice and at least 5 business days (SOP Act s 17H)	Building Act 1993, Authorised Version 152; Domestic Building Contracts Act 1995, Version 094; SOP Act Version 015. Read 25 October 2026
Queensland	A fixed price residential contract ends on valid termination for contractor default, death, a company that no longer exists, or insolvency together with licence cancellation (Regulation sch 6 s 4)	Deposit limits 10%, 5% or 20% (QBCC Act sch 1B s 33); assistance for the insurable deposit if work had not started (Regulation sch 6 s 5)	No liquidation provision found	Project trust for eligible contracts of $10 million or more, or $1 million for the State or a hospital and health service (BIF Act s 14); retention trust for cash retentions under withholding contracts (s 32)	QBCC Act 1991 (from 1 February 2026), QBCC Regulation 2018 (from 1 September 2026), BIF Act 2017 (from 28 April 2026). Read 25 October 2026
South Australia	Policy must insure against inability to recover under a statutory warranty, and loss from non-completion, because of the contractor's insolvency, death or disappearance (s 35(1))	Deposit not more than $1,000 below a $20,000 price, or 5% at $20,000 or more, for contracts from 1 September 2011 (s 30)	No liquidation provision found	No trust provision found	Building Work Contractors Act 1995, version 15.1.2026; SOP Act version 10.12.2011. Read 25 October 2026
WA	Death or disappearance, a builder that ceased to exist, insolvency, or registration cancelled or not renewed for failing prescribed financial requirements (s 25D(1A))	Deposit not more than 6.5% (s 10(1)); cover for loss of deposit up to $20,000 or a prescribed limit (s 25D(1)(a)(i))	A corporation in liquidation cannot make or enforce a payment claim; a pending application is taken to be withdrawn (SOP Act s 68)	Retention money trusts (Part 4) for contracts above $20,000 entered into from 1 February 2024 (reg 11), small-scale residential subcontracts excluded (reg 12). An Amendment Act inserting construction trusts (No. 16 of 2026) received assent on 21 October 2026; Part 2 commences on a day fixed by proclamation (s 2(b)) and had not commenced at 25 October 2026. For contracts from 1 February 2023 to before 1 February 2024 the threshold was $1,000,000 (reg 11(a))	Home Building Contracts Act 1991, as at 5 April 2023; SOP Act as at 21 October 2026; SOP Regulations 2022, as at 1 July 2026. Read 25 October 2026
Tasmania	No insurance provision found in the 2016 Act; no other instrument read. Not verified (25 October 2026)	Deposit limits 5%, 10% or 20% by contract price and off-site work (s 41(2))	No liquidation provision found	No trust provision found	Residential Building Work Contracts and Dispute Resolution Act 2016; SOP Act 2009. Read 25 October 2026
ACT	Policy insures against inability to enforce or recover because of the builder's insolvency, disappearance or death, and may exclude other claims (s 90(1)(f), (3)); insolvent includes a corporation under external administration (s 90(5))	If unfinished work cost less than the deposit, the owner may recover from the insurer the lesser of the deposit less work done or $10,000 less work done (s 93(3); reg 43)	No liquidation provision found	No trust provision found	Building Act 2004, Republication 56; Building (General) Regulation 2008, Republication 52; SOP Act Republication 14. Read 25 October 2026
NT	Insurance indemnifies loss where the builder failed to complete or contravened a consumer guarantee and has died, disappeared, become bankrupt or insolvent, or ceased to be registered for a prescribed reason (s 54C); an RBI policy or fidelity certificate is required (s 54AC)	No deposit limit found in the Building Act; no payment, as a deposit or otherwise, may be demanded or received unless an RBI policy or fidelity certificate is in force and its document or copy has been given to the other party (s 54AC(2))	Implied terms on unfixed goods if the principal becomes insolvent (s 23; Schedule 1, Division 8)	Implied term: retention money held on trust for the contractor, where the contract has no written provision (s 24; Schedule 1, clause 10)	Building Act 1993, as at 10 February 2026; Construction Contracts (Security of Payments) Act 2004, as at 25 May 2024. Read 25 October 2026

The creditor process
is the same everywhere.

ASIC's information sheets for unsecured creditors, each reissued in June 2023, set out the steps and the dates a counterparty will see.

INFO 45 also states that a liquidator can recover unfair preferences, generally payments in the six months before the liquidation is taken to have begun, subject to defences, and that a secured creditor's interest in personal property should be registered on the Personal Property Securities Register (PPSR) to be given priority in an insolvency. A company can be in receivership at the same time (INFO 54).

Step	Voluntary administration (INFO 74)	Liquidation (INFO 45)
Effect on claims	Unsecured creditors cannot begin, continue or enforce claims without the administrator's consent or the court's permission	Unsecured creditors cannot commence or continue legal action against the company unless the court permits
First notice to creditors	First meeting within 8 business days of appointment, with at least 5 business days' notice	Notice of appointment and creditors' rights within 10 business days (creditors' voluntary liquidation) or 20 business days (court liquidation)
Report	Administrator's report and statement sent at least 5 business days before the second meeting	Statutory report within 3 months after appointment
Decision or distribution	Second meeting within 25 business days of appointment (30 around Christmas or Easter), unless the court extends; creditors may return the company, accept a deed of company arrangement or wind it up	Costs, then employee wages and superannuation, leave, retrenchment pay, then unsecured creditors, each in full before the next
Your claim	Lodge details of the debt (usually a proof of debt form) to vote	Formal proof of debt when called, with at least 14 days' notice of the deadline, also published on ASIC's Published notices website

What a business records
the day a counterparty enters administration.

For a builder whose subcontractor or supplier fails, or a subcontractor or supplier whose builder fails, the same set of facts is needed later, and most of them are dated.

The appointment: Type (voluntary administration, liquidation, receivership), date of appointment, the company name and ACN, and the appointee's name and firm, as shown in the notice and on ASIC's Published notices website.
What is owed each way: Every open invoice, payment claim and schedule with its date, every variation, and any amount the business owes the company. The proof of debt asks for supporting documents, and INFO 45 states a claim may be rejected if there is insufficient evidence.
Payments received in the last six months: Dates and amounts, because INFO 45 describes the unfair preference period by reference to the six months before the liquidation is taken to have begun.
Retention and security held: Cash retention, bank guarantees and bonds held by or from the company, with the contract clause, and whether a statutory trust applied (Queensland, WA, and the NT implied term).
Security registrations and goods on site: PPSR registrations held over goods supplied, and unfixed goods on site, which the NT Act addresses where the principal becomes insolvent.
Each deadline once notified: Meeting dates, the proof of debt deadline, and for a homeowner's job, the insurance or scheme claim period in the policy or terms of cover.

What we would put in a system

For each counterparty, we would test for five fields.

Where agents help here is narrow. A finance and cashflow agent can watch for an appointment notice against the ACNs of current counterparties, assemble the open invoices, claims, retention and payment history into a draft creditor file, and list the dates to diary; a person confirms. No agent decides whether to lodge a proof of debt, whether a payment is an unfair preference, or whether any claim will succeed. Those are questions for the external administrator, the court and your advisers.

Field	Why it is load-bearing
ACN, appointment type and date, appointee	The ASIC steps and their deadlines run from the appointment, and differ for administration and liquidation.
Open amounts each way, with documents	A proof of debt is assessed on supporting evidence, and amounts owed to the company are part of the same picture.
Payment history with dates	The unfair preference period ASIC describes is measured back from the start of the liquidation.
Retention, guarantees and trust status per contract	Queensland and WA have statutory trust schemes with thresholds, and the NT implies a trust where the contract is silent.
State, contract date and insurance or scheme reference for each homeowner job	The trigger differs by state, and Victoria's Part 9A scheme applies to insurable contracts entered into on or after 1 July 2026.

Questions worth asking
of your own records

For a subcontractor: if a builder you work for entered administration tomorrow, could you list every open claim, schedule, variation and retention amount against it with dates?

The proof of debt asks for supporting documents, and ASIC states a claim may be rejected for insufficient evidence. General information as read on 25 October 2026, not legal or insolvency advice.

For a head contractor in Queensland or WA: which contracts carry a statutory retention trust, and is each one's account and ledger current?

Queensland's s 32 and WA's Part 4 set when a retention trust is required, by contract type and value. The answer is a query only if the threshold test was recorded when each contract was entered into. General information as read on 25 October 2026, not legal advice.

For a residential builder: does every homeowner contract record its state, contract date and the certificate or notice of cover?

The insurance trigger and the scheme differ by state and, in Victoria, by whether Part 9A applies. General information as read on 25 October 2026, not legal or insurance advice.

For a supplier: are PPSR registrations recorded against each customer, with the goods they cover?

ASIC's INFO 45 states a security interest over personal property other than land should be registered on the PPSR to be enforceable and given priority in an insolvency. General information as read on 25 October 2026, not legal advice.

Questions people ask
when a builder goes into liquidation

What happens when a builder goes into liquidation?

A registered liquidator takes control of the company to wind up its affairs. ASIC's INFO 45 (reissued June 2023) states unsecured creditors cannot commence or continue legal action against the company unless the court permits, the liquidator reports to creditors within three months, and any dividend is paid after costs and employee entitlements. Homeowner cover depends on the state's insurance Act and the policy or terms of cover. General information as read on 25 October 2026, not legal advice.

What happens to a deposit if a builder goes bust?

It depends on the state. WA's s 25D(1)(a)(i) requires cover for loss of a deposit up to $20,000 or a prescribed limit; Queensland's Schedule 6 s 5 provides assistance for the insurable deposit if work had not started; the ACT's s 93(3) allows recovery of up to $10,000 less work done; icare lists loss of deposit as covered in NSW. As read on 25 October 2026; general information, not legal or insurance advice.

My builder has gone into administration: what happens next?

ASIC's INFO 74 states the administrator must hold the first creditors' meeting within 8 business days of appointment and the meeting to decide the company's future within 25 business days (30 around Christmas or Easter), unless the court extends. Creditors may return the company to its directors, accept a deed of company arrangement or wind it up. General information as read on 25 October 2026, not legal advice.

Can a subcontractor use the security of payment Act against a builder in liquidation?

Apart from the NT's implied terms on unfixed goods where a principal becomes insolvent (s 23), the eight security of payment Acts read on 25 October 2026 contain no provision on a payment claim or adjudication against a respondent in liquidation or administration. ASIC states that after liquidation unsecured creditors cannot commence or continue legal action against the company unless the court permits, and during an administration cannot begin, continue or enforce claims without the administrator's consent or the court's permission. Separately, NSW s 32B and WA s 68 bar a claimant that is itself in liquidation. How these apply to a particular claim is a question for your advisers. General information, not legal advice.

Which states have retention trusts for construction?

As read on 25 October 2026: Queensland requires a retention trust for cash retentions under withholding contracts linked to project trusts (BIF Act s 32); WA's Part 4 applies to contracts above $20,000 entered into from 1 February 2024 (Regulations reg 11), with small-scale residential subcontracts excluded; the NT implies a trust for retention money where the contract is silent (Schedule 1, clause 10). NSW's Act allows regulations for retention trusts (s 12A); the regulation was not read. General information, not legal advice.

What this analysis
does and does not show.

Evidence note

What it shows: The national creditor process for voluntary administration and liquidation as ASIC describes it to unsecured creditors, and, for each state and territory, the insurance or scheme trigger, the deposit rule, what the security of payment Act says about liquidation, and any statutory retention or project trust, at the versions listed, as read on 25 October 2026.
Key facts quoted: ASIC INFO 74: no claims without consent or permission; first meeting within 8 business days; second within 25 (30 near Christmas or Easter). INFO 45: proof of debt deadline with at least 14 days' notice. Triggers: NSW s 99, SA s 35, ACT s 90, NT s 54C, WA s 25D, Qld sch 6 s 4, Vic s 137K. SOP Acts: NSW s 32B, WA s 68 (claimant in liquidation). Trusts: Qld BIF Act ss 14, 32; WA Part 4, reg 11 $20,000; NT Schedule 1 clause 10.

NSW legislation was read from archived copies (Home Building Act 18 January 2026, SOP Act 23 January 2026) and an extract read on 9 October 2026 through a rendering proxy, because the register blocked access on 25 October 2026. South Australian legislation was read through a rendering proxy. The NSW retention trust regulation was not read.
Victoria's Part 9A regulations and prescribed terms of cover, Queensland's insurer practice, and the policies issued in NSW, SA, WA, the ACT and the NT were not read. Whether any claim is accepted is for the insurer or scheme.
Tasmania's warranty position is not verified. For Victorian contracts entered into before 1 July 2026, the earlier domestic building insurance terms were not read and are not verified.
We did not read the Corporations Act itself or any court decision; the creditor process is as ASIC's information sheets describe it.
Nothing here is legal, insolvency or insurance advice.

Bring us one counterparty file.

Send us the open invoices, claims, retention and payment history for one builder, subcontractor or supplier you deal with. We will show you which dated facts about that counterparty your records already hold, and which would have to be rebuilt on the day of an appointment.

General information about published legislation and regulator guidance only. It is not legal, insolvency or insurance advice, and it does not determine whether any claim, payment or policy applies. Provisions as read on 25 October 2026 at the versions listed in the sources.

Send us the file · Finance and cashflow agent

Sources

Suggested citation: ASIC INFO 45, INFO 74 and INFO 54 (reissued June 2023), and the home building, building and security of payment legislation of each state and territory at the versions listed, as read 25 October 2026. Derived figures: none.

When a builder goes into liquidation, the creditor process is national. The cover is not.