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ARTICLE · 22 OCTOBER 2025

The risk of builder insolvency mid way through a construction project is real (and will probably be expensive)

Swaab Attorneys
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Good planning and a collaborative approach can go a long way to mitigating these risks.

AustraliaReal Estate and Construction
Mark Glynn
Mark Glynn
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Introduction

This article provides guidance to those undertaking construction works and identifies a number of contract provisions which, if included in the construction contract, can assist a developer to identify and then manage a builder insolvency event should it arise.

All construction projects come with risk (and reward)

Some of the usual risks that immediately come to mind include:

  1. Cost overruns – Whilst most developers and principals include a 'contingency' in their project financial modelling, it is not always sufficient.
  2. Delays in build program – Delays in construction are inevitable notwithstanding that most programs will include a buffer or some 'float' in the program. The impact of delays can manifest as increased cost of materials, cranes or labour, extended financing and utility expenses, as well as lost opportunities due to the delay.

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For further information please contact:

Michael Byrnes, Partner
Phone: + 61 2 9233 5544
Email: [email protected]

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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