A retired couple has lost their $70,000 deposit and is left with an unfinished dream home following the collapse of a construction company.
Karen and Colin Scarlett paid Adelaide-based builder Qattro a $70,000 deposit three years ago to have their forever home built in Underdale, 5km from the CBD.
Now the couple, along with 200 others, are in the lurch after the construction company went into voluntary administration on Tuesday.
The house was originally scheduled to be completed within 12 months, but the completion date was postponed due to the pandemic.
The business subsequently collapsed and their house was three-quarters finished.
Karen and Colin Scarlett (pictured) have a house three-quarters finished and no idea how it will be completed after their builder went into voluntary administration on Tuesday
Their Underdale home (pictured) near Adelaide’s CBD was supposed to be ready two years ago but faced numerous delays due to the pandemic
All new build homes in South Australia are covered by property damage insurance, but it remains unclear whether their claim will cover the remaining construction costs.
Mr. Scarlett retired before the couple committed to building the house, and he didn’t save enough money to deal with the costly mess it has become.
“When you have a fixed income (like I am now retired), it is not easy to find that money,” he said 7News.
“It’s so vague at the moment where we could end up.”
The couple have been told they have three choices: hold on to the partially completed house, cut their losses and buy another, or continue renting.
Buying another home could cost $150,000 more than the first, and that’s only three-quarters done.
Mr. Scarlett doesn’t know where they can find the money to pay for another house, while in the meantime they are stuck paying the rent.
Since Qattro have entered into voluntary administration, all their customers are eligible to start the process of recovering their losses through their building damage insurance.
But even if insurance covered the cost of the house, the Scarletts would still have to overcome trade offer issues.
The developer who worked with the couple in Underdale, Mark Johnson, said he chose Qattro because of their track record of similar projects.
Mr Johnson is also due to pick up the pieces this week and reveal this would be his last build before he retires.
He said his company is stuck paying high interest rates on unfinished homes while everyone figures out what to do.
Qattro is the latest in a long line of construction companies to declare bankruptcy this year, owing $4.5 million to unsecured creditors and leaving behind 16 unfinished projects.
Among the unfinished developments were Fletcher’s Slip in New Port and Dock One in Port Adelaide, which promised harborside homes in a vibrant community.
Qattro owed $4.5 million to unsecured creditors and was working on 16 now-unfinished projects
Among the company’s key developments were Fletcher’s Slip in New Port and Dock One in Port Adelaide, which promised harborside homes in a vibrant community.
This is the latest collapse in the trend of builders failing to recover from the expensive losses the industry has incurred during the pandemic.
Karim Hrynkiw, a subcontractor who worked at Qattro’s Dock One development, said they suspected something was wrong when bills were paid late.
Mr. Hrynkiw now says he has received between $60,000 and $80,000 out of his own pocket.
South Australian Premier Peter Malinauskas appeared confident in tackling the problems, insisting the sector’s problems were subsiding.
The Prime Minister said his state has performed better than others when looking at where builders have been hardest hit post-pandemic.
He also told Qattro customers that his government hoped to set up a hotline they could call as they worked out their next steps.
Nationally, 1,709 construction companies have come into administration in the past twelve months.