Emma Kealy said she first raised concerns about an impending industry crisis a year ago when she spoke in Victorian Parliament about timber and other product shortages and related cost increases that were decimating.

This comes after Lynch Builders, the operators of Hotondo Homes Horsham, entered into voluntary administration, owing more than $1.2 million to various creditors.

Hotondo Homes, the franchises parent company, said the closure was due to external pressures facing the construction industry.

"All you have to do is drive around any regional town to see how much the building sector really is struggling," Ms Kealy said.

READ MORE:

"It is upsetting to see Hotondo Homes Horsham go into administration. It is something no one ever wants to see happen to any business, and is devastating for the local family operators, the local employees who have lost their jobs, the local businesses left out of pocket, and the local families who are now uncertain about the future of their homes."

Hotonodo Homes Horsham was the second franchise to be placed into administration, after the collapse of Hotondo Homes Hobart in January 2022.

In early July, Victorian construction firm Snowdon Developments was ordered to go into liquidation on the grounds of insolvency.

In addition, Wulfrun Construction and Westernport Constructions entered liquidation while Victorian-based Langford Jones Homes and CBD Developments were also forced to shut down.

With the string of building companies entering administration across the country, calls have come from industry groups such as Master Electricians Australia for the state government to also increase protections for sub-contractors - many of whom were owed substantial amounts by the collapsing businesses.

Master Electricians Australia National Advocacy Advisor Chris Lehmann building contractors needed the protection of statutory trust accounts to ensure they were not left out of pocket when building companies failed.

OTHER NEWS:

"If we had proper trust accounts for each project, builders would be prevented from switching money between jobs,'' Mr Lehmann said.

"They'd be forced to plan their cash flow and expenses better, and sub-contractors would face less risk from building company collapses.

"Sub-contractors should not have to bear the brunt of poor planning and mismanagement by the building contractors.''

In response, a Victorian government spokesperson said the government was "aware" of issues affecting the construction industry.

"We understand the pressure on builders due to increases in costs and supply chain disruption, and the impacts this is having on the construction industry and residential clients," the spokesperson said.

"The Government is continuing to work constructively with the industry to help address these challenges."

If you are seeing this message you are a loyal digital subscriber to The Wimmera Mail-Times, as we made this story available only to subscribers. Thank you very much for your support and allowing us to continue telling your stories. We appreciate your support of journalism in our great city.