Buyers stranded as builder fails
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, Rob and Sue Fargher, 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 the money is not held in trust accounts – the money was paid into the company’s current account, which makes the customers unsecured creditors.
A1 Gisborne advertised kitsetstyle 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 are 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.
The full extent of creditor claims is 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.
The liquidators have contacted clients whose homes are currently under construction, and those who have paid deposits but where work has not started.
The liquidators are currently selling the assets, and the smallest of the three buildings has already been sold. The majority of the company’s vehicles have been collected by an independent third party to be disposed of at public auction.