Cade Lucas
The liquidator of failed Point Cook building company, Chatham Homes, has warned prospective homeowners that other construction companies could follow suit.
Andrew Schwarz of AS Advisory was appointed liquidator of River Dale Building Group Pty Ltd, trading as Chatham Homes, last week after the company collapsed leaving 50 projects without a builder and 16 staff without jobs.
The boutique home builder became the latest construction company to enter administration this year, joining the likes of Porter Davis and fellow Point Cook based company, A1A Homes, in being unable to survive the rising costs, delays and supply constraints plaguing the industry.
Andrew Schwarz said Chatham Homes may not be the last to go under.
“Given the issues the industry is facing, it wouldn’t surprise me if there were more,” he said, urging those planning to build a home to be extra careful.
“It’s very important to do your due diligence if you’re building and to investigate the financial strength or otherwise of the proposed builder.”
Chatham Homes had projects underway across Wyndham, the western and northern suburbs, the Surf Coast and Ballarat when it ceased operations.
Mr Schwarz was unable to say how many customers in Wyndham were affected, but had two pieces of advice for those with homes left unfinished.
“One is lodge your claim with the VMIA (Victorian Managed Insurance Authority) under homeowners warranty insurance and two, we are in discussion with a number of builders in relation to those builders being able to complete contracts on behalf of Chatham Homes.”
Along with existing construction projects, Mr Schwarz said Chatham Homes had signed contracts for another 30 and owed about $2 million to approximately 200 creditors.
Chatham Homes owner, Bradley Hall, last week blamed referral commissions paid by builders to real-estate agents, financial planners and other advisers for his company’s failure, telling the told the Australian Financial Review that the ‘absurdly high’ commissions represented a risk to the entire industry.
Andrew Schwarz said it was too early to tell if this was the case.
“I think preliminarily they’re reasonable (excuses) though we haven’t started our investigation phase yet,” he said, adding that liquidations generally take anywhere from 18 months to 3 years to complete.
