Kate and Rod Iskander’s building site with views across Hobart’s River Derwent is littered with bricks and hardening bags of cement after their builder stopped work on their home two months ago.
Key points:
- The Iskanders are one of a number of clients of a Tasmanian builder left in the lurch after the company went broke
- Sisters Maddy and Victoria Stansfield say they could lose their life savings after work stopped at their home
- Labor’s Jen Butler says consumers have better protections when “buying a toaster” than when building a home in Tasmania
They say they are financially out of pocket hundreds of thousands of dollars and are faced with the prospect they may not be able to finish their home.
“I haven’t slept, I cry all the time … the kids are devastated,” Kate Iskander said.
Their builder, Inside Out Construction — owned by Corey Wills — has gone into administration.
“We’ve sort of been scrambling ourselves trying to find out what our rights are calling CBOS [Consumer Building and Occupational Services], Master Builders Association, getting legal advice,” Ms Iskander said.
“But there’s really not much we can do.”
The Iskanders have described their financial loss as “a scar on our financial lives going forward forever”.
“My estimation and based on the couple of quotes we’ve got [to complete the house] is we’re nearly $250,000 out,” Rod Iskander said.
The couple embarked on the build for a four-bedroom, two-bathroom home in August this year.
The couple said they paid their builder prior to the completion of the base stage.
“We stupidly put the progress claim through because [the builder was] telling us there was material shortages,” Mr Iskander said.
“We did that, you trust the builder … and then literally the work stopped pretty much after that.”
The couple have been left with the base for a driveway into the garage and some steel posts on site.
‘It’s the wild west out here’
The Iskanders moved to Tasmania from New South Wales and were shocked to discover that there was no insurance covering their losses.
In all states, bar Tasmania, there is mandatory building warranty insurance. It covers a range of different issues — mainly builders who die, lose their licence or become insolvent.
“I guess the whole process has just taught us that there’s absolutely nothing for you as a consumer,” Mr Iskander said.
“You sign a contract, you’re on your own.
“I am absolutely shocked that that is the case.”
The couple are calling for the Tasmanian government to agree to an inquiry to look at how consumer protections can be strengthened.
“It’s quite embarrassing to be here and go through this, put ourselves out there like this. But we’re here to try and prevent this from happening to other people,” he said.
“Something has to be done, it’s the wild west out here, it’s just crazy.”
Sisters face losing their life savings
Maddy and Victoria Stansfield signed a contract with the same builder.
“It’s been a very stressful time, but we’re really grateful to have the support of our family. It’s had a big emotional toll on both of us,” Victoria Stansfield said.
The sisters have dreamed of becoming home owners since high school and have been putting money aside.
“When the government grants came out we thought that was a great time with the help from them to start to look into the housing market,” Victoria said.
The sisters could not afford to buy on their own so pooled their money to invest in building a house to share.
“We wanted our own spaces in the house … so we had it three bedrooms, two living and we’re keen to share it with our family and friends,” Maddy said.
Work started on their block in July, but then there was no progress for months.
“We heard nothing pretty much until we questioned what was happening and we’ve been going around in circles with meetings pretty much ever since,” Maddy said.
The sisters face the prospect of losing close to $75,000, with the builder in administration.
“That’s really one of our main concerns, we’ve put our life savings into building this home,” Victoria said.
Calls for better protections
Alistair Dennis said he feels like one of the lucky ones — he and his business partner were also clients of Inside Out Construction.
Their two-unit development on Hobart’s eastern shore is almost complete.
“I just feel sorry for people … we know of people who have half-built houses and framework,” he said.
Nevertheless, Mr Dennis said their build had taken a toll.
It started in 2020 and he said it had been a long and difficult journey to get the building company to finish the job.
Mr Dennis is also calling for better consumer protections in Tasmania.
“There needs to be some sort of insurance scheme. If it can operate in other states, why can’t it operate in Tasmania?”
Home owners are not the only ones to have been let down by Inside Out Construction.
The ABC has spoken to one of the company’s former employees who said he is owed about $44,000 in wages plus about $7,000 in superannuation.
He said there were about 20 employees who stopped working for the company last month.
They have received emails from Corey Wills directing them to the federal government’s Fair Entitlements Guarantee scheme — a safety net of last resort.
Mr Wills has not responded to requests for comment.
The Master Builders Association in Tasmania is helping 23 clients of Inside Out Construction find new builders.
“We provide contracts and part of that service is that we do provide support and advisory services to builders and their clients,” said the association’s executive director, Matthew Pollock.
He said under the Residential Construction Contracts Act, a builder “cannot claim for work that hasn’t been done”.
“It’s an extremely challenging environment for builders at the moment … cashflows have been affected substantially across the sector due to COVID-induced supply chain issues. This unfortunately is a result of that.
“Inside Out is not the only building business that we’ve seen go under in the last few weeks.”
Building surveyor says new home owners ‘are at their wit’s end’
Building surveyor Gabriel Barnes said his work at times brings him in contact with people who have been let down by their builder.
“I find I am a social worker and marriage consultant when I am dealing with some of these people,” he said.
He believes an insurance scheme would help both consumers and builders.
“Builders used to be restricted in the number of houses they could take on at any one time by the number of assets that they had,” he said.
“You’d get a builder that may have a ute and tools, he might be able to have one house on the go at a time until he builds up his assets.
“But now, that insurance doesn’t exist … we have builders out there who are basically taking on 20 homes at a time and all they’ve got is their ute and tools behind them.”
Mr Barnes said insurance was even more important with the state and federal government offering first home builders grants.
“As material prices have been going up by 15 to 20 per cent minimum, those contacts that they signed 12 to 18 months ago are now looking very shaky in some cases. It’s bringing builders undone.”
‘More protection when you buy a toaster’
Some in the building industry argue that the insurance was too expensive and too few claims were made.
“I am not suggesting the insurance was the rolled gold standard by any means, and yes, it was expensive,” Mr Barnes said. “But to go from something to nothing.
“I tell you what, it’s more expensive to go through the Supreme Court trying to get blood out of a stone,” he said.
Attorney-General Elise Archer said in a statement it was the “government’s intention to investigate the possibility of reintroducing a model for home warranty insurance in Tasmania”.
Labor’s Jen Butler said she would continue to fight for a government inquiry into building in Tasmania, despite it being rejected by the state government last month.
“At the moment in Tasmania you’ve got more protection when you buy a toaster than what you do when you build a home,” she said.
Ms Butler referred to the long campaign that resulted in the banking royal commission becoming a reality.
“Sometimes it takes many times for a government to agree to a parliamentary inquiry, for instance for the banking royal commission that took 18 times of tabling a notice of motion and asking a government to actually agree to an inquiry,” she said.
