A Melbourne-based construction company has collapsed with around $1million in outstanding debt to 50 creditors, liquidators say.
The construction company called Blint Builders Pty Ltd has gone into voluntary liquidation after news.com.au revealed that a number of owners were under ‘horrible’ stress as they had poured hundreds of thousands of dollars into half-finished houses that had stood untouched for months.
Cliff Sanderson of insolvency firm Dissolve has been appointed to manage the liquidation of Blint Builder.
Mr Sanderson said Blint Builders owner Michael James told him the company had ‘ceased trading’.
“In our conversations with him, which have not yet been verified, he told us that there were 50 creditors with approximately $1 million in debt and I expect that number to increase and the money increases beyond that,” he said. com.au.
“Horrible Strain”
Mr Sanderson said he had also been told that ‘half a dozen’ homeowners had been affected by the disappearance of Blint Builder’s Pty Ltd, but was waiting for more information from the builder.
One affected family is Dean and Nolle Fuller, who have five children between them, and have already paid Blint $480,000 since signing in January.
The couple demolished their existing home last November and hired Blint Builders to build two townhouses for $1.5million, which were due for delivery early next year.
No work has been done on the site since June and it was broken into after construction halted, leaving it a “mess”, Mr Fuller said.
‘During this time we have had two sets of vandalism, trespassing and damage to our property, which have been filed with the police,’ Mr Fuller told news.com.au.
“We backed up a lorry and dumped three to four square meters of rubble and rubbish on the property and the lorry also smashed the gates.
“Recently someone came and stole the electric meter from the property.”
The project manager said the experience caused “an incredible amount of stress and anxiety”.
Tony and Jo Firman and their two children, who are in the process of building a house specially designed for her because she has multiple sclerosis, are another family who are going through a “terrible ordeal”.
The couple said they have paid the builder $1.14 million so far and the house is in the process of being closed, but no work has taken place since early June, according to Mr Firman.
“Even with the insurance paid in full, it may not be enough money. We have skimped, saved and borrowed quite a large sum of money. pay off the loan and be able to live,” Mr Firman told news.com.au earlier this week.
The owner owed $14,000
The office of Blint Builders’ Pty Ltd in the Melbourne suburb of Highett was also seized by the owner.
Legal documents posted on the front door show that the landlord has executed his right of re-entry, terminating the lease and demanding that all belongings be removed and the keys returned.
The legal notice also revealed that Blint Builders owes the landlord nearly $14,000 in unpaid rent and rates.
Mr Sanderson said statistically it was rare for a dividend to be paid to a homebuilder’s unsecured creditors because they “rarely have any assets”.
“ASIC’s recently released business insolvency statistics reveal that the construction sector accounted for 28% of all insolvencies for the June quarter of 2022,” he said.
“Construction is the largest sector in the statistics, second is accommodation and catering with 16% of the total, while 28% is the highest ever recorded percentage of total insolvencies for construction, tied with the December 2021 quarter.
“On average since 2013, construction accounts for 19% of total insolvencies.”
construction crisis
Overall, the construction industry has been plagued by a series of meltdowns caused by a perfect storm of supply chain disruptions, skilled labor shortages, spiraling costs materials and logistics and extreme weather events.
Earlier this year, two major Australian construction companies, Gold Coast-based Condev and industry giant Probuild, went into liquidation.
Victorian building companies were particularly hard hit by the crisis.
Two construction companies in Victoria have fallen victim to the crisis after going into liquidation at the end of June, with one owner shelling out $300,000 for a now half-built house.
Then there were smaller operators like Hotondo Homes Horsham, which was also based in Victoria and franchised to a national building company – which collapsed earlier this month affecting 11 owners with 1.2 million dollars of unpaid debt.
It is the second Hotondo Homes franchisee to file for bankruptcy this year, after its Hobart branch collapsed in January owing $1.3 million to creditors, according to a report by liquidator Revive Financial.
Norris Construction Group, which was in Geelong, collapsed in March with $27 million in debt. He owes about 140 employees $3.2 million that he is unlikely to be able to repay, according to the liquidator’s report.
Snowdon Developments was put into liquidation by the Supreme Court with 52 employees, 550 homes and more than 250 creditors owed just under $18 million, despite being partially bought out less than 24 hours after going bankrupt.
Others also joined the list, including Inside Out Construction, Solido Builders, Waterford Homes, Affordable Modular Homes and Statement Builders.
The most recent collapse was NSW building company Willoughby Homes, which went into voluntary administration last week, leaving at least 30 homes in limbo.
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