If Michael Nelson wants to access the back half of his home, he has to go out the front door, walk through the muddy backyard and enter through an unfinished back door.
The doorway which would have joined the original house to the new extension has been boarded up after his builder went into liquidation earlier this year. Although Mr Nelson says he had paid about 90 per cent of the total cost of the build, the house is far from finished.
"Everything just ground to a halt right then," he said.
Money he had paid towards the windows, joinery and appliances was not passed on to the suppliers, he said and the new part of the house is not connected to water or electricity. Renovations to the existing part of the house have not been started.
The new section is unpainted both inside and out, and the backyard - which was supposed to have been landscaped - is nothing but piles of dirt. When it rains, the water pools where a rainwater tank was supposed to be installed, before flowing to the bottom of the property, eroding the soil.
Mr Nelson said with the quotes he has been given to complete the work, he believes he will be about $300,000 out-of-pocket.
"We will not be able to finish the original scope of the extension as it stands right now," Mr Nelson said.
"We're going to have to work out a way to get that liveable, or even sellable, because at the moment we have an enormous white elephant stuck to the back of our house."
In the ACT, home owners are required to get builders warranty insurance, sometimes called home owners warranty, if they are building a large enough project on their property.
The warranty is intended to protect home owners against financial loss if the builder they have hired dies, disappears or becomes insolvent before the work is completed. Before January 1, 2025, it was capped at $85,000 but now covers up to $200,000 in unfinished or faulty work.
Mr Nelson said the government was able to acknowledge the original amount was not enough to cover an incomplete project, but because he had started the build before the change came into effect, he can only access the lower amount.
"Even though they knew that $85,000 wasn't enough, they're helping people in the future, not the people who needed it right now when they'd made the assessment," he said.
"We want them to consider how they can support people who have been victims of this situation and provide support and help for those who were caught in the transition gap that they created.
"There's been a real lack of consumer protections in terms of the gap, because the same situation has delivered very fundamentally different outcomes to us versus everyone else."
The number of construction companies going into insolvency in the ACT more than doubling between 2021 and 2025, and the cost of construction has only continued to rise.
Mr Nelson's builder, Keith Perrett, told The Canberra Times he was left with no options but to go into voluntary administration after the cost of supplies spiked during the pandemic.
The Housing Industry Association's regional executive director, Geordan Murray, said the insurance payment was only intended to cover one progress payment, but that the increased cap was an acknowledgement that $85,000 was unlikely to be enough.
"During COVID it was recognised that that $85,000 was insufficient to actually cover that progress payment just given the increase in construction costs," Mr Murray said.
Progress payments are supposed to be paid after certain stages of work have been completed, Mr Murray said, so home owners should not have paid for supplies they have not yet received.
However, he said builder insolvencies could leave home owners in a "difficult position", and they often had a hard time finding another builder willing to take on the work of finishing the build.
He said it was worth investigating whether there was a market demand for insurers to offer home owners who started building earlier than January 1, 2025 the option to increase their cover, but that it was unlikely there were many people in Mr Nelson's situation.
"A typical build would take nine to 12 months and the new insurance cap has been in place since the beginning of 2025," he said.
"That's 18 months on. There's probably very few projects that are still going where the lower cap applies."
A spokesman for Planning Minister Chris Steel said there was no mechanism for a home owner to increase the insurance cap on their existing policies prior to January 1, 2025.
"The insurance that was taken out by the builder at the time the contract was signed sets the terms and conditions that are provided by the insurer until the insurance expires," he said.
"The increase of January 1, 2025 applies to insurance taken out from that point forward. Insurance premiums were also adjusted at this time to cover the increased insurance coverage."
