Frustrated homeowners are one step closer to finishing their partially completed home, but are still unsure of when they will be able to move in.
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In a meeting of creditors of the collapsed homebuilder Elderton Homes held yesterday, creditors voted for the company to be bought out by another builder.
Elderton, which had been building homes in Calderwood and Kembla Grange as part of a pipeline of 60 homes across the Illawarra, Western Sydney and the Central Coast, went into voluntary administration in December last year.
Kelly and Tony Sharples were promised they were just weeks away from moving into their dream home by Christmas when the company went bust.
In the months since, the family have had to look on as recently built houses on either side filled their driveways with children's toys and started tending to their front yards, as building materials remained fenced off out the front of their home.
Now, the Sharples have the option of completing their house with Elderton Homes owner Andrew Whitehead's other business Creation Homes - something they say they will never do - or find their own builder.
"We'll have to either find a new builder or see if we can try and finish what we've got left ourselves if the bank will let us do that," Kelly Sharples said.
As part of the administration process, the Sharples lodged a proof of debt, stating they were out of pocket for unfinished works and the cost of rent and interest rate increases on the loan for the uncompleted home to the tune of over $90,000.
This debt was written down by administrators by nearly half. Mrs Sharples said she thought it was unlikely the couple would ever see their missing money.
The Sharples are one of 60 families who are attempting to find a solution and move into their dream homes after Elderton went bust. However, as UOW building industry expert Tillmann Boehme points out, the story of Elderton Homes is not at all unique.
"What you have is almost a perfect storm," he said.
Last year, 2022, was littered with stories of building companies going bust, from large, corporate builders such as Probuild to smaller outfits such as Elderton.
Dr Boehme said this was down to a number of factors all coming together in 2021.
"We have continuous supply chain disruptions, material shortages, skill shortages and staff shortages in the industry," he said.
Data from the State Insurance Regulatory Agency shows that in late 2021 claims due to builder insolvency under the Home Builders Insurance Scheme reached levels not seen since the end of the global financial crisis in 2011. Data for 2022 has not yet been released.
With builders largely tied to progress payments and fixed contracts, as costs rapidly inflated, builders did not have the cash to pay tradespeople and reach key payment points. Companies that were particularly at risk were those that had overstretched geographically and did not have the local network of tradespeople to complete jobs on time.
For those companies that go into administration, there often are ways out, through cash injections from governments or investors, through to liquidation, but those hoping to move into the family home are left carrying the cost of rising interest payments, rent and the inflated cost of completing the home, just like the Sharples.
"For those people who deal with companies that are in voluntary administration the pain is the interest rate, and not progressing and stalling the development," Dr Boehme said. "They're going to be out of pocket a lot because of the time delay."
"We don't even know how much it's going to cost to finish the house," Mrs Sharples said.
Do you know more? Contact Connor at connor.pearce@austcommunitymedia.com.au
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