A major Australian home-builder has gone into receivership in a state capital, leaving thousands of dollars behind.
A woman who lost tens of thousands of dollars to homebuilder Hotondo Homes has described the ordeal as ‘absolutely horrific’ amid revelations the Hobart franchise has been liquidated.
Hotondo Homes in Hobart went into receivership and left up to 80 contractors and 40 clients in limbo with unfinished homes following speculation that a closure was imminent.
Tasmanian Constructions, owner of the Hotondo Homes franchise in Hobart, notified the Australian Securities and Investments Commission (ASIC) last Wednesday of its closure.
The company had decided at a general meeting on January 4 to liquidate its business and appoint Jarvis Lee Archer of Revive Financial as liquidator, according to ASIC’s advice.
There are liabilities estimated at over $1 million, not including amounts claimed by customers.
Client Katrina Phillips, who was building a house with Hotondo in Magra, northwest of Hobart, paid the company $64,000 just a month before it went bankrupt.
Ms Phillips, who lost her former home to the bushfires in 2019, told ABC News the construction was due to be completed by November 2021.
She attempted to delay payment to the company until construction reached a certain stage, but had been pestered for payment.
“There’s not even a power outlet in the place, there’s no bathroom, there’s no carpeting or tiling anywhere…the veranda ceiling has no redone,” she said.
“It’s just awful. Absolutely awful.
“From the time I paid them on December 6, they had a guy come in and put doorknobs, and that’s all that’s happened since I paid them the $64,000.
“I just don’t know what I’m going to do now.”
Dozens of construction projects reportedly left in limbo and customers left behind in liquidation
Mercury reported that a customer of the company received an email late Wednesday that Hotondo Homes had gone into liquidation.
“We understand the company was in the process of building residential accommodation for you,” the email read.
“We are currently working with company staff and contractors to understand the current status of each contract and the options available to you.”
The company’s liquidator, Jarvis Archer of Revive Financial, said it was unclear whether creditors would get their money back.
He confirmed that about five employees also lacked rights such as retirement pension.
Available assets are collected and sold and the investigation now examines the business of the company and the causes of financial failure.
“The director said that despite the company’s profitable contracts, delays in the planning and construction stages, particularly due to difficulties in the supply of construction materials, meant that projects could not progress as planned. “, Mr. Archer said.
“As a result, the business has been slower to meet progress milestones and issue invoices, which has had a significant impact on its cash flow and ability to continue operations.
“We obtained information on the business and financial situation of the company and dealt with various stakeholders.”
NCA NewsWire has contacted Hotondo Homes and Tasmanian Constructions for comment.
Master Builders Tasmania executive director Matthew Pollock told the ABC that the state’s construction industry was under pressure.
“The last 12 months have been characterized by a period of peak demand, driven by homebuilder subsidies, and state and federal governments (are placing) great responsibility on the building industry to lead the economic recovery” , did he declare.
“It coincided with a very difficult time for business with supply chain disruptions, material price increases and trade shortages.”
The closure of Hotondo Homes follows a period of disruption in the building industry in Tasmania, with numerous reports from residents across the state struggling to complete their homes or finding themselves with defects.
The state was the only jurisdiction in Australia without home warranty insurance, which covers customers if their builder dies, disappears or becomes insolvent, after it was scrapped in 2008.
The Tasmanian government reintroduced home warranty insurance at the end of December, but rejected state opposition calls for an inquiry into the building industry.
Labor Party Building and Construction spokeswoman Jen Butler called in October for an inquiry into “shonky” builders, which Consumer Affairs Minister Elise Archer dismissed as “completely unnecessary”.
“The Tasmanian Liberal Government has made significant reform to our building regulatory framework and supports the streamlining of industry regulations to ensure strong consumer protections are in place,” she told AFP. the time.
The government in November merged several existing courts to launch the Civil and Administrative Court of Tasmania, which will be able to handle construction disputes.