UP to 40 building sub-contractors could be out of pocket and property owners left with incomplete homes following the collapse of the Hotondo Homes Mildura franchise.
Liquidators have been appointed to the company this week following a decision on Tuesday to wind up the franchise leaving home owners in a state of limbo.
Some owners are still waiting for work to be finished almost 20 months after signing up for the Mildura franchise to build what was meant to be their their dream homes, but say they have instead been left with false promises and shoddy workmanship.
Mathew Gollant, from insolvency and forensic accountants Courtney Jones & Associates, said on Wednesday that while “only a handful” of home-owners would be impacted by the collapse it was “still a cause for concern for those people”.
Mr Gollant said the firm was now in the process of notifying affected property owners, sub-contractors and suppliers.
“The business isn’t going to be reopening so the homeowners are the ones that we focus on initially,” Mr Gollant said.
“In these situations … they need to take some steps now to protect their interests and we’ll be notifying them in the next 24 hours and then the general creditors at a later date,” he said.
Mr Gollant said he would not anticipate home owners to be left out of pocket due to the Victorian Managed Insurance Authority (VMIA) personal investment protection scheme.
“If the pricing of the jobs was appropriate they shouldn’t suffer a loss,” he said.
“The VMIA policy is there to protect them, and hopefully they achieve a satisfactory outcome without any significant loss other than the worry and concern that comes with a builder going broke half way through a project.
“If they secure another builder to come in and complete the job there is a mechanism that allows for some increase in the cost of doing that because of someone else having to take over somebody else’s work.
“Provided the work was quoted at a reasonable price that shouldn’t be an issue … but it will come down to specific site circumstances on each property and at what stage the project is at.
“That said, I’ve done other builders before where they went in too cheap and no-one could have done the job for the price that they quoted — (but) I don’t know the extent of it, it’s early days and I’m not at that stage by any means.”
However, Mr Gollant said there was no similar scheme for sub-contractors.
“Unless contractors have their own credit insurance, which is expensive, they will unlikely see a recovery at this point in time,” he said.
“There’s probably in the order of about 30 or 40 different companies or small businesses and sole traders, but I’m yet to get all those details.
“At this stage they will suffer a loss.”
Dream now a nightmare
A MILDURA mother says what should have been an “exciting milestone” building her first new home was the most stressful time of her life which left the family broke and living in an unfinished house.
The woman, who did not want to be named, said she signed a contract with the Mildura franchise of Hotondo Homes in March last year and works are still yet to be completed.
She said that in the time she and her partner waited for the house to be built they had a baby and spent their life savings just to stay afloat.
The woman took to Facebook to highlight her concerns over the manner in which her home slowly came to life over about 20 months.
“All we get is excuses of delays because of ‘manufacture problems’, ‘shortage of workers’, ‘delay in materials’. Why aren’t materials being ordered in advance?” she lamented earlier this year.
“We are heart broken and stressed.
“This has been the worst, most stressful time of our lives and a horrible experience.
“Our first home should be an exciting milestone that we worked hard to achieve.”
