A1 Homes franchise collapses

"The liquidators will be contacting customers as quickly as possible." Liquidator John Fisk of PWC

Homes are unfinished, buyers’ deposits are at risk, and 25 staff and numerous subcontractors are out of work after the collapse of the Gisborne branch of A1 Homes.

The franchise is owned by Fargher Construction whose shareholders are Rob and Sue Fargher - they voluntarily placed the company in liquidation after a major supplier ceased providing credit.

Liquidator John Fisk of PWC said he had identified debts of $1.3 million from more than 100 creditors, among them Fletcher suppliers of concrete and building products.

At least 10 would-be home owners paid deposits but they are not held in trust accounts - they were paid into the company’s current account, which makes the customers unsecured creditors.

A1 Gisborne advertised kitset-style four bedroom, two bathroom, two-car garage homes at a built price (excluding land value) of $272,273, with a ‘‘no surprises guarantee’’.

The company built homes in Taupo, Hawke’s Bay and Gisborne. Several are unfinished, and deposits have been paid on other houses where work has yet to begin.

About 38 customers have been affected. There are 18 contracts in place with houses at various stages of completion, and 10 customers who have paid for plans but have not signed building contracts.

Fargher Construction is a relatively new company, formed in 2010 to operate the Gisborne A1 franchise.

‘‘It is our intention to work with A1 Homes to evaluate the options going forward for those customers who may have incomplete homes. In this regard, the liquidators will be contacting customers as quickly as possible,’’ Fisk said.

The full extent of creditor claims are yet to be determined.

Fisk said Fargher Construction had a licence arrangement with A1 Homes rather than a franchise agreement, which may have an effect on contracts.

Those customers who have paid deposits but are yet to have any work undertaken on their property have been written to by the liquidators. They have been encouraged to file their claim with the liquidators as soon as possible.

The company’s assets consisted of tools of trade, office furniture, computer equipment, vehicles, work in progress and three relocatable buildings.

The liquidators are in the process of selling the assets with the smallest of the three buildings already sold.

Most of the company’s vehicles have been collected for sale.