builder gone bust, what happens in this situation?

just curious

http://www.theage.com.au/victoria/h...-watersun-homes-collapse-20170327-gv7u8j.html

it says certain builders have been allocated to complete hte job, and they will contact the customers to discuss their needs

in a straight administration, the buyers would have to pursue the builder to try and get some credit back

so in this what happens?

does the builder go in and say "hey, we can do it for $XXX, are you happy with this? If so give me money"

or who pays for these builders and are either parties legally obliged to go ahead with them

 

Builders Warranty Insurance usually. The insurer appoints a builder.

 

We were building and our builder went bust very close to our completion date. The appointed builder came in and finished off everything and all we had to pay was our insurance excess.

Others who weren't so far progressed weren't so fortunate. You're correct that the builder sets a price and asks for a sum of money. So many builders have front loaded their contracts, there's not enough money left for a new builder to complete it at no cost to you

 

I understand that some owners (close to complete) were given an appointed builder. There is no choice. They will complete the build it seems. I'm sure there is a work in progress claim for the new build but not for the past build. Those who didnt get one appointed was because the work was too preliminary or not to standard for a builder to take on the warranty (ie aged framing). I believe those with no builder will be contacted by the liquidator.