Major builder collapses after backlash

Construction on more than 700 homes has been put on hold in Victoria as another construction firm enters voluntary administration. Mahercorp, the parent company of builders Eight Homes and Urbanedge Homes, has informed clients that construction will be suspended for more than a month as administrators work to restructure the business. This development follows the collapse of Porter Davis, one of Australia’s largest construction firms, which left thousands of homes unfinished across Victoria and Queensland.

The Melbourne-based company built residential and commercial builds across Australia and New Zealand but was recently embroiled in a debacle where a customer was demanded to pay an extra $125,000 to complete a build.

The company immediately began to build a series of one-star reviews online, with other customers revealed similar experiences.

In March it was reported by news.com.au that customer Abishek Mahajan had signed up to build a $675,500 home with Melbourne construction firm A1A Homes in August 2021.

The 27-year-old claimed his build was delayed for a year before the slab was poured – but once it was completed he was “angry and shocked” by what happened next.

He claimed the building firm demanded an extra $125,000 to complete the build but it was impossible for the NDIS worker to come up with the huge sum.

“It was always a dream getting into the property market, to build our own house and move in there and start a family,” Mr Mahajan told news.com.au.

“I recently got married and it’s a migrant’s dream. My parents came here 12 years ago and I’ve been working so damn hard to have my own house and they have ruined every year of hard work for us”

Mr Mahajan said he had no idea when attending a meeting on site in August 2022 that he would receive a request for an extra $125,000 – with the building firm basing the decision on “rising costs”.

The situation left him reeling.“Literally the earth was gone from my feet and my heart was about to come out. How would you find that much amount of money and how could ask for that much money?” he said.

“People take out a loan to get that money, it’s not like $5000 or $10,000, but $125,000 is a down payment for a house…”

“Mentally I was so damn sick from the inside, I was having breathing issues when I spoke to them. I was having a mini heart attack as you have lost everything in that split second.”

At the time, A1A Homes declined to answer detailed questions on the dispute.

The company issued this statement: “We believe some of these accusations are completely not true. As you know publishing false defamatory statements will have consequences. We will seek compensation if there will be damages to A1A Homes reputation.”

Mr Mahajan claimed he had no choice but to mutually cancel the contract with the builder in September last year after the money request.

Building in the suburb of Craigieburn, an email to Mr Mahajan from the building company outlined how he had already paid $101,325 as part of the contract.

The building firm said they had incurred an approximate cost of $92,585 from the work already done and said they owed him a refund of $8740.

On the company’s latest post on Facebook, comments have been limited.The most recent notice from the corporate watchdog, the Australian Securities and Investment Commission (ASIC) says creditors will meet for a second time to discuss the future of A1A Homes on June 6.

Builder collapses keep coming

This all comes just daysafter a prominent residential building company in Western Australia went bust.

On Monday, the Slatter Group WA Pty Ltd, trading as the Slatter Group, appointed liquidators to wind up the company.

Samuel John Freeman and Clare Anne Baily of big four accounting firm Ernst & Young (EY) are the joint liquidators of the operation.

The company held a general meeting where attendees voted for it to be put into voluntary liquidation.

The Slatter Group had been in business for 20 years.

It built both residential homes as well securing government contracts, mostly for the education sector.

Indeed, the company was reportedly engaged in several large government projects such as the Murdoch University Senate conference room, an early learning centre at Penrhos College and refurbishing the Aquinas College’s boarding house.

The website is still live and states: “At Slatter Residential, we believe that forging strong relationships with our clients is the first step towards bringing their dreams to reality.”

When news.com.au contacted them, their phone lines rang out.

An EY spokesperson told news.com.au that “The liquidators are urgently assessing the position of the company and will be writing to the company’s clients regarding existing building contracts and reporting to creditors in due course.

“The company has ceased trading upon the appointment.”

It comes as the entire building industry is in crisis because of supply chain disruptions, skilled labour shortages, skyrocketing costs of materials and logistics, locked-in price contracts and extreme weather events.

So far this year, around a dozen builders have collapsed.

Earlier this month, Interface Constructions Victoria, which specialised in childcare and education projects, appointed external administrators.

Australia’s 13th largest home builder Porter Davis as well as Lloyd Group, shut their doors within 24 hours of each other.

PBS Building, a multimillion-dollar firm which did a mix of commercial and residential projects across Queensland, NSW and the ACT, officially collapsed, leaving 180 staff and 80 projects up in the air.

Earlier this year, three prominent building companies collapsed a day apart from each other, with NSW apartment developer EQ Constructions going bust owing up to $50 million, then Perth building company called Hamlen Homes going into administration with $1.4 million reportedly owed to creditors and the next day Melbourne-based residential builder Hallbury Homes going into voluntary administration.