Dispute pushes family to brink
Builder liquidates company, leaving family out of pocket
Maggie Law’s 2-year old son peeps a smile out from under her arm. His future seems secure as they sit in their newly-built dream home in Auckland’s east — but Law isn’t smiling. She says a dispute with their builder had delayed their home’s final inspection approval by close to a year and pushed them to the brink of financial ruin.
She subsequently took builder Jared Guojun Cha and his I Home Furture company to the Disputes Tribunal, winning a $30,000 payout.
But Cha put the company into voluntary liquidation, leaving Law feeling she has little hope of seeing the cash owed her.
Cha told the Herald on Sunday his company had no money to pay and he had no regrets because he thought the tribunal’s decision was unfair.
Law said she now wanted to warn others about Cha — who continued to run other building companies — as well as the risks of hiring unproven builders versus reputable brands.
Law’s new home is just one of thousands mushrooming up across Auckland as developers rush to cash in on booming sale prices. But while most are being built by professional developers, mums and dads are also increasingly dipping their toes in.
In 2014, Law and her partner Sheng Guo bought a 1970s-built Bucklands Beach house on a 597sq m site.
After meeting Cha at a party, they pushed ahead in 2019 with plans to build a new family home at the back of the property, allowing them to rent or sell the existing house.
Cha not only offered to build the new home for $420,000 — cheaper than most of the big builders — but Guo had also known him in the past.
Guo and Cha studied English in Palmerston North together and hailed from the same hometown in China.
At first the house build went well, with the couple enjoying a great working relationship with Cha.
But in early 2020, after most of the home had been built, issues arose with the concreting job on the driveway, Law alleged.
Cha contends some of Law’s concern over the driveway was not for him to deal with; including to concrete the drive near the old house.
Driveways on new-build properties needed to be laid with permeable concrete so rain water could seep into the soil rather than flooding the street or neighbours’ properties, Law said.
She claimed Cha had no experience laying permeable concrete.
He then refused to fix his job or to concrete the rest of the shared driveway that ran from the new house to the old house, she said.
Cha downed tools over the dispute. That left the home’s final inspection still incomplete almost a year later, while rubbish remained scattered through the yard and decking and a retaining wall unfinished.
The delay had also left Law and Guo paying off two mortgages and unable to rent or sell the front home to recoup some of their costs.
The Disputes Tribunal would later side with Law, saying her evidence showed Cha had incorrectly laid the concrete and that he was responsible for the rest of the shared driveway.
Cha told the Herald on Sunday he respected the Disputes Tribunal, but thought the decision was unfair because he hadn’t had enough time to prepare his own evidence.
He also said it was not fair to expect him to concrete the driveway near the old house because he had been hired to build the new home.
“From our point of view, building a new house is building it inside the new property’s boundary, not outside the boundary,” he said.
He said he had spent $390,000 building the home, leaving little margin from the $420,000. “I don’t want to go for liquidation, but when you are suffering a customer this difficult, you have no choice,” he said.
Law said Cha had set up I Home Furture solely to build her house.
He seemingly structured it with no assets so it acted like an empty company to accept payments from her and pay sub-contractors, Law said. That meant it seemingly held no assets and little cash to reclaim.
While that was a common way to structure companies in the building industry, Law said she wished she had written more protections into her contract, such as a clause holding Cha personally liable or witholding more of the payment until completion.
“I think a well-known company would never liquidate because of $30,000, so you can trust they will finalise your payment, finalise your project and do whatever they can to ensure they keep a good brand name,” Law said.
The couple now needed a further bank loan for the $30,000 Cha wouldn’t pay, so they could finish the property.
“I’m just thankful that we’ve somehow survived this far because I think many people would have been left in ruins.”