Prominent Point Cook based builder, Chatham Homes, goes into voluntary liquidation, impacting staff and homeowners.
In a distressing turn of events for both employees and homeowners, Chatham Homes, a prominent builder based in Point Cook, has collapsed into liquidation. The fallout from this financial crisis has left 50 homeowners in Melbourne and regional Victoria in limbo, with staff losing their jobs abruptly.
The company, previously known as River Dale Building Group Pty Ltd, voluntarily initiated the liquidation process just over 24 hours ago. Andrew Schwarz, an insolvency expert from AS Advisory, has been appointed as the liquidator to manage the company’s affairs.
Shockingly, all 16 employees lost their jobs during a company-wide meeting, and Chatham Homes officially ceased its operations. Preliminary findings indicate that the company owes approximately $2 million to around 200 creditors, primarily tradespeople.
One alarming revelation is that Chatham Homes may not have insurance coverage for some of its customers, putting them at risk of losing their entire deposits without government intervention. Hamish, one of the affected homeowners, expressed frustration, saying, “We’re 560 days into a build that was meant to take just over a year. Our dream of moving into a home in 2022 never eventuated.”
The liquidator, Andrew Schwarz, noted that it remains unclear how many customers lack insurance coverage. Chatham Homes’ website and social media profiles are still active.
The company had been operating under its current leadership since 2019, but it had been in business for years prior. In a letter to customers, the liquidators explained that the company could no longer complete contracted works due to a lack of funds and the termination of all employees. They also stated that it is likely the company will be unable to obtain domestic building insurance, further hindering project completion.
Efforts are underway to find another registered builder willing to acquire Chatham Homes’ contracts to complete ongoing projects. Homeowners have been urged to get in touch with the liquidators and initiate insurance claims to begin the process of recovering their investments.
This unfortunate incident adds to a growing trend in Victoria’s building industry, with 2,213 building companies collapsing during the 2022-23 financial year, representing a 72 percent increase compared to the previous year. Experts attribute this trend to various factors, including fixed-price contracts, rising costs, supply chain disruptions, and shortages of skilled tradespeople.
The HomeBuilder grant, introduced by the previous Morrison government in June 2020, contributed to the booming construction sector. However, the program’s fixed-price contracts became unsustainable as prices surged, leaving both builders and homeowners vulnerable to financial instability.