Elderton Homes' collapse shatters Kembla Grange dream build

Just weeks before, their builder, Elderton Homes, had told the family they would be in their dream home before Christmas, after delays caused by COVID and weather pushed back their build which had begun in mid-2021.

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"[My daughter] was really happy, really excited, and then we're driving past the house and I thought, there's nobody at the house?" Mrs Sharples said.

Pulling up to the nearly complete building site in the car with her mother behind the wheel, Mrs Sharples could see a note taped to the front door.

"I said, 'Do you mind just pulling in, I want to read what this says.'"

The sheet of A4 paper informed the Sharples that they would not be moving in before Christmas. In fact, they now had no idea when they could move in.

Elderton Homes goes into voluntary administration

On December 12, Elderton Homes notified its customers and suppliers that it had entered voluntary administration. The company cited the impact of bushfires, floods, COVID-19 and economic conditions, as well as record levels of rainfall, substantial price increases, supply chain challenges and labour shortages.

"We bought our land in October 2020, we started building in August 2021 and it was supposed to be finished on the 10th of May," Anthony Sharples said.

The couple were told severe rain, tradespeople not being available due to COVID and, they say, "every excuse under the sun" why their home would not be ready.

"Obviously we've had quite a bit of wet weather, but there were houses around us being built in the same conditions and were getting finished," Mr Sharples said. "We were the last one left."

The couple held out hope that their home would be finished, particularly after being told on December 9 they would be in by Christmas. In preparation, the couple rushed out to buy Christmas presents for their three children.

"We actually, for Christmas, bought our daughters TVs to go in their bedrooms," Mr Sharples said.

Trapped in admin hell

Instead of enjoying their new home the family are trapped in a cycle of red tape and regulation. Administrators, O'Brien Palmer, was appointed to Elderton Homes and creditors were told there was interest from parties who wanted to acquire the business.

In January, the administrators circulated a report into Elderton's finances. The report revealed the dire state of the company.

At the time of entering administration, Elderton had 75 homes in various stages of completion in the Illawarra, Greater Sydney and the Central Coast, as well as a pipeline of 127 new projects.

Based on a preliminary examination of the company's accounts, the administrators found Elderton was insolvent and could not pay its debts after June 30, 2022. This places Elderton's director and sole shareholder Richard Whitehead at the threat of criminal sanctions.

The administrators also found Mr Whitehead deposited $1.7 million in the accounts of Elderton Homes on December 1, 2021 and on the same day $1.706 million was paid out, with 'Spec Home and Land' noted with the payment.

"We have sought information about this payment and are awaiting the receipt of a response," the administrators write.

The report notes that unless one of those parties that had expressed an interest in Elderton Homes and acquired the business by way of a deed of company arrangement (DOCA), the administrators recommend the company go into liquidation.

A glimmer of hope

Following the report of the auditors, a second meeting was scheduled for January, to be held in Parramatta. The Sharples hoped creditors at this meeting would be able to vote to send the company into liquidation, freeing them up to find a new builder to finish their home and enabling them to lodge a claim under the NSW home building compensation fund.

But instead the creditors were told Richard Whitehead had proposed a last minute DOCA. If approved the DOCA will prevent the immediate winding up of the company and states that 'home owners with incomplete projects are able to claim against home owners warranty insurance policies'.

Waiting for answers

In the weeks since this announcement, former clients of Elderton Homes have gathered together, seeking to find ways that their homes can be built.

Some are yet to have a slab put down, others are just wooden frames, exposed to the elements and some, like the Sharples, are agonisingly close to being finished.

But, no matter the state of construction, until a decision is made on the future of Elderton Homes, no homeowner can do anything, unless they are willing to break their contract and become liable for associated penalties.

Another meeting is scheduled for late February, but in the meantime, the Sharples and 74 other families are paying for rent, storage and watching the interest rates on their home loans go up and up on the first Tuesday of every month.

"They've used all our savings, we've got no savings left," Mrs Sharples said.

"We're not even close to being the people that are hit the worst," Mr Sharples added.

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