Newcastle builder Ben Geary fined $3000 for leaving homeowners 'vulnerable' and with no protection due to lack of home warranty insurance

Mr Geary, of BJG Builders, is accused of leaving several Hunter families out of pocket with unfinished or 'defect-riddled' homes.

He filed for bankruptcy just days after Charlestown MP Jodie Harrison launched a scathing attack on him using parliamentary privilege in November.

A NSW Fair Trading spokeswoman said on Wednesday that without Home Building Compensation Fund (HBCF) insurance, commonly known as home warranty insurance, homeowners had no protection.

The insurance covers minor defects for up to two years and major defects for up to six years. It also covers a portion of unfinished work.

"Without the cover the homeowner has to pay for any repairs or defects themselves or take the trader to the NSW Civil and Administrative Tribunal," she said.

"It leaves them in a vulnerable position and can cost far more than the cost of the original build or repair."

Mr Geary was issued with two penalty infringement notices and fined $3000.

Ms Harrison said Mr Geary, of Lake Macquarie, left a string of defective work, failed to comply with rectification orders and placed "enormous pressure" and "financial strain" on his clients.

She urged the government to "create the necessary protections" so homeowners can undertake the "big financial commitment" of building or renovating their homes "in good faith".

"With so much at stake, it is important that regulations exist to protect consumers when things go wrong," Ms Harrison said.

Bankruptcy trustee Mitch Griffiths, of Rapsey Griffiths Insolvency and Advisory, said unsecured creditors were estimated to be owed about $430,000, but total debt was unclear at this stage as not all claims had been assessed.

He said homeowners covered by HBCF insurance could submit claims for incomplete or defective building works.

"I am aware of three such potential claimants, but to date have received only one claim in respect to amounts paid out under HBCF totalling $226,009," he said.

"In respect to the other two potential claimants, one has submitted a claim in the administration for $100,000 and the other is yet to formally submit a claim."

Mr Geary blamed the lack of insurance on an "administration error" and said he had a "long history" of operating with insurance.

He blamed his business failure on clients not paying bills and said more protection was needed for "small time builders".

"The fines were issued some time ago and paid," he said.

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