A Southern Highlands builder who lost almost everything in two construction company collapses has called for trust accounts to become standard practice to protect vulnerable subcontractors.
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Michael Ryan said the company failures had cost him an estimated $890,000 over the past four years, forcing him to sell his Bowral home and office.
Now he will not enter into any contract without a trust account being in place to guarantee payment for services rendered.
"It's a touchy situation when you engage a client, but if you ask them to put money up front and they do, you know they're fair dinkum. If they walk away from it, you know they've got issues."
Mr Ryan, director of Eastwick Country Homes, was left $280,000 out of pocket after the company Universal Equity collapsed in the middle of a $31 million project at Mittagong four years ago.
In February, he lost another $360,000 when a builder, Kell & Rigby, went into voluntary administration.
Rather than passing the debts forward to his team of 15 builders, he sold his home and office at a loss to ensure they were paid.
But having suffered such huge losses, Mr Ryan is now asking for surety as a contract provision.
"A lot of people get their noses out of joint when you ask them, 'Can you pay for this project?'
"Put your money up front and let's put it in a secure account so as we know," he said.
"Some say no and then straight away you can lose the job because they're not prepared to do that.
"They can try to offer you a guarantee, but when they've got no money, it doesn't matter. You fill out a contract 76 pages long and it does not mean one thing when they've got no money."
Construction, Forestry, Mining and Energy Union Illawarra organiser Mick Lane said bank guarantees should be put in place by the client to guarantee access for the "small and middle man" in the event that a project turned sour.
He said that government jobs should be underwritten by the department involved to ensure greater accountability.
"That would place greater emphasis on that department to do its work properly when it first initiates the contract, and if people can substantiate that their claim is a real one, it's valid, then if no-one else pays, they should.
"It's as simple as that," he said.
Minister for Finance and Services and Minister for the Illawarra, Greg Pearce, said contractor, subcontractor and supplier relationships were commercial arrangements.
As such, there was Security of Payments legislation to protect subcontractors and secure progress payments for their work.
"Under the legislation, it is up to subcontractors to initiate a claim with the Government.
"We welcome any ... suggestions regarding ways to improve security for subcontractors," he said.
He did not comment on the call for trust accounts in contracts.