Yahoo Finance Aussie homeowners warned over major 'red flag' after building company collapses: 'Nightmare'
Grandeur Homes has been placed into administration and more than 100 customers have been left in limbo.
Aussies have been urged to be on the lookout for a major red flag if their dream home is in the hands of a building or construction company. Grandeur Homes was placed into external administration last week and it's left more than 100 customers in the lurch, many of whom now have no clue when their property will be built.
Restructuring advisory firm Cor Cordis told Yahoo Finance that construction work would be paused until a resolution can be completed. Melbourne mum Shauna Josan hasn't seen any progress on her home since the start of this year and revealed the move to plunge Grandeur into administration was a brutal blow to her plans.
"It's horrible. You're raising a young family, trying to build your dream home, and it's really just a nightmare," Josan told A Current Affair. "Building with Grandeur was the biggest mistake of my life."
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'Good faith' payments should be avoided at all costs
Josan claimed she was asked for money from Grandeur before certain works were completed rather than once they had finished.
Aussies who engage in building companies usually have to pay in instalments and there are typically five stages of the process.
Josan said Grandeur wanted money before it had finished the lock-up part of the build, the third stage, and she complied out of "good faith".
"We did it thinking if we paid it, it would help the building progress," she told the Channel 9 programme.
"[But] it sat there like that since the end of January."
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Metricon CEO Brad Duggan said this was something every Aussie should avoid.
"If a customer is being pressured by a builder, particularly if that pressure involves them suspending works or threatening to suspend works, to me, that would indicate a builder that's got some significant difficulties," he said.
"The contract is there to protect customers, so regardless of the pressure that's applied, customers should stick to their contract.
"Customers should not be making payments to builders outside their contractual obligations - it's a red flag to me."
Updates for Grandeur Homes customers
Staff at Grandeur were last week told that their services would be terminated immediately as the building company couldn't pay all employees.
Sam Kaso and Daniel Juratowitch from Cor Cordis told Yahoo Finance they were exploring "the possibility of developing a proposal to restructure the business".
As for the dozens of customers left in limbo, they will have a new avenue for updates on their properties.
“We understand there are 108 homeowners affected by our appointment and have been made aware some homeowners have had difficulties obtaining updates from the Company on the progress of their construction recently,” Kaso and Juratowitch said.
“We have been in direct contact with homeowners already and set up a new dedicated email address for customers, employees, and creditors to provide regular updates as we work through the voluntary administration process.”
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