HBCF and the Liquidation Process: Two Recovery Paths That Must Be Managed Together

The HBCF pathway

The insurer considers the project certificate, trigger, contract, payment history, incomplete and defective work, related loss, timing and reasonable cost. The homeowner may need inspections, scopes, quotations, termination evidence and responses to requests for information.

The objective is compensation within the policy, not a distribution of the builder's assets.

The liquidation pathway

The liquidator administers the failed company for all creditors. The homeowner may lodge a proof of debt, receive reports, vote and provide information about company property or conduct. Any dividend depends on available assets and statutory priorities.

The objective is recovery against the company, not assessment of the HBCF policy.

Use one reconciled loss model

Maintain a schedule that identifies original contract price, valid variations, payments, value or extent of work received, completion and defect costs, related expenses, HBCF amounts claimed or paid and liquidation recoveries. Update both processes consistently.

Different totals may be legitimate at different stages, but each version should explain the change. Unreconciled figures can undermine credibility and create double-recovery concerns.

Coordinate communications and decisions

A settlement, deed, release or assignment in one process may affect rights in the other. Before accepting a liquidator proposal, insurer settlement or builder-related payment, obtain advice about interaction and disclosure obligations.

Provide the insurer with formal insolvency evidence and tell the liquidator about the nature of the HBCF claim where relevant. Retain all correspondence in the same project register but label the two streams separately.

The physical and evidentiary projects must move together

Builder liquidation creates a physical problem and an evidence problem. The house must be protected and completed, but the owner must also prove what was incomplete, what was defective, what had already been paid for and what the covered loss should reasonably cost.

If construction proceeds without a documentation plan, the house can improve while the strongest insurance evidence disappears. The effective model is one recovery file serving three coordinated streams: site completion, HBCF assessment and the creditor process.

Practical takeaway: Builder recovery has a construction track, an insurance track and an insolvency track. They should share evidence without being confused as one proceeding.

How ARK Houses can help

ARK Houses is structured to coordinate the construction and HBCF documentation tracks on the same project. We create the site record, separated scopes, marked plans, quotations and completion evidence while the owner and advisers manage the insurer and insolvency decisions.

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