A woman who lost tens of thousands of dollars to home builder Hotondo Homes has described the ordeal as “absolutely horrific” amid revelations the Hobart franchise has been liquidated.
Hotondo Homes in Hobart has entered receivership and left as many as 80 contractors and 40 customers in limbo with unfinished homes following speculation a closure was imminent.
Tasmanian Constructions, which owns the Hotondo Homes franchise in Hobart, last Wednesday informed the Australian Securities and Investments Commission (ASIC) that it was closing down.
The company had decided at a general meeting on January 4 to wind up operations and appoint Jarvis Lee Archer of Revive Financial as liquidator, according to the ASIC notice.
There are estimated liabilities of more than $1m, not including amounts claimed by customers.
Customer Katrina Phillips, who was building a home with Hotondo in Magra, northwest of Hobart, paid the company $64,000 just one month before it went under.
Ms Phillips, who lost her previous home to bushfires in 2019, told ABC News that the build was meant to be completed by November 2021.
She attempted to delay payment to the company until the build reached a certain stage but had been hounded for payment.
“There‘s not even a power point in the place, there’s no bathroom done, there’s no carpet or tiles done anywhere … the ceiling on the veranda hasn’t been done,” she said.
“It‘s just horrific. Absolutely horrific.
“From the time I paid them on December 6, they had a bloke come and put some door handles on, 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 have reportedly been left in limbo and clients left out of pocket as a result of the liquidation
The Mercury reported a customer of the company received an email on Wednesday night stating that Hotondo Homes was placed into liquidation.
“We understand that the company was in the process of constructing a residential dwelling for you,” the email read.
“We are currently working with the company’s staff and contractors to understand the current status of each contract and the options available to you.”
The company’s liquidator Jarvis Archer, from Revive Financial, said it was unclear whether creditors would get their money back.
He confirmed around five employees were also short of entitlements such as superannuation.
Available assets are being collected and sold and the investigation now is examining the company’s affairs and causes of financial failure.
“The director advised that despite the company’s contracts being profitable, delays to planning and construction stages, in particular due to difficulty sourcing building materials, meant projects couldn’t progress as planned,” Mr Archer said.
“Consequently, the company was slower to reach progress milestones and issue invoices, severely impacting cashflow and its ability to continue operating.
“We have been obtaining information regarding the affairs and financial position of the business and dealing 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 had been under strain.
“The last 12 months has been characterised by a period of peak demand, driven by Home builder grants, and both state and federal governments (are) putting a large responsibility on the building industry to lead the economic recovery,” he said.
“It’s coincided with a very challenging period for businesses with supply chain disruptions, material price increases and trade shortages.”
Hotondo Homes’ closure follows a period of disruption in the Tasmanian building industry, with widespread reports of residents across the state struggling to get their homes finished or being left 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 removed in 2008.
The Tasmanian government reintroduced home warranty insurance in late December but voted down calls from the sate opposition for an inquiry into the building industry.
Labor’s Building and Construction spokeswoman Jen Butler in October called for the probe 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 streamlining industry regulations to ensure strong protections for consumers are in place,” she said at the time.
The government in November merged several existing tribunals to launch the Tasmanian Civil and Administrative Tribunal, which will be able to handle building disputes.
