Angry home buyers stuck in builder’s money-go-round
Builder’s clients struggle to get progress on their homes, to the point where one couple have put plans for a baby on hold, writes Geraden Cann.
Ashley and Kerryn Croudis thought they were safe building their first home with Dean Lister, believing he was a member of Registered Master Builders and part of a nationwide building company called Build 7.
They signed their contract in July 2020, and say work was originally planned to be finished by April 2021. But they are still waiting and now face delays getting their Code Compliance Certificate.
The Croudises are not alone; other clients of Lister’s still have only concrete slabs or levelled sites and retaining walls after two years, and some are struggling to get money back from their deposits after cancelling contracts.
Some also never received a Master Build Guarantee they believed they had paid for.
Lister says Covid-19 has created a financial squeeze. He told one client he was relying on payment from other builds to keep their projects on track, prompting concerns about the stability of his business.
Kerryn Croudis says she and her husband’s plan was to move into their Glenbrook home, in south Auckland, with their newborn.
Their son is now 16 months old and they still don’t know when they might move.
‘‘It’s disappointing being our first home, the initial experience was really positive but when things started to go wrong, and the lack of communication, we really lost trust in him [Lister],’’ she says.
Two other clients in the Glenbrook development, Elise Stanghan and Allan Pope, say they put plans for a baby on hold due to the delays in their build.
Stanghan says the pair have been living with family and friends because it was too expensive to pay rent and a mortgage.
They can no longer afford to build, and plan to sell their section and buy an existing home.
The couple signed their contract with Lister in August 2020, and say that after two years and $88,000 paid, they have only a retaining wall and levelled site to show for it, as well as plans and consent.
Stanghan and Pope’s lawyer drew up a mutual exit agreement, which included an agreement Lister would repay $18,599 from the couple’s deposit.
They say they never received a response or a refund, and on September 10, with the help of another lawyer, an email was sent stating Lister was deemed to have abandoned the contract.
‘‘Dean never replied, and it’s been roughly three months since we have heard from him,’’ Pope says.
Lister says Eleven Limited is negotiating resolutions to some of its build contracts, and he cannot comment.
‘‘However, I can confirm that Eleven Limited intends to do right by its clients, and is seeking to resolve matters directly with the parties to ensure they can continue with their build projects.’’
Before the pair decided to try to leave the contract, Stanghan recorded a phone call with Lister, during which he said he was waiting on money from other contracts to spend on their build.
‘‘The biggest issue I have is that I can’t afford at the moment to pay people up front to get them on site. That’s my biggest issue, so what I’m having to do is get funds from other jobs and then slide the money sideways to get your one up and running, and that’s proving pretty difficult,’’ he is heard to say.
The couple became worried Lister was reliant on signing up more customers in order to cover work on existing contracts.
Joanna Pidgeon, director at Pidgeon Judd Law in Auckland, says the use of money from one job to progress another is worrying, and could suggest solvency issues. Trading while insolvent is illegal.
She says insolvency proceedings are usually taken by subcontractors who had not been paid, rather than clients who had not received homes in good time.
‘‘When you pay your builder they should be using those funds to pay their sub traders, so to keep a watching brief on your builders’ solvency, see if their sub trades are being paid.’’
Lister says Eleven Limited had its share of difficulties during the pandemic, like the majority of the build industry.
‘‘Where Eleven Limited used to obtain materials and products, which it would pay for on the 20th day of the following month, creditors began requesting deposits for those materials and products, which in many cases had to be paid in full prior to any works commencing or securing supply of those materials and products.’’
He said the flow-on effect was Eleven Limited had to bankroll projects.
‘‘Where possible, I would get the clients to pay contractors upfront, so that this would not hold up their build contracts,’’ he says.
Phillip and Francesca Smith are another couple in the Glenbrook development trying to claim money back from Lister after their build stalled.
More than two years after signing a build contract a concrete foundation has been completed.
The couple are represented by legal firm Turner Hopkins, which sent a letter cancelling the contract in July and requesting $70,000 of their deposit back, but the couple say they have had no response.
The Croudises used social media and an email mistakenly cc-ed to multiple clients to bring a group of Lister’s customers together.
They say while the process has been financially and mentally stressful, having had to pay rent and a mortgage due to delays, they are grateful to have a nearly completed home.
Lister emailed them in August, agreeing ‘‘without prejudice’’ to refund them $18,915 after the couple paid the council direct for the water connection, but Kerryn says the refund had not yet been made.
The director of Build 7, Alan Butcher, says Lister left the company in December 2020 and has been asked to stop using the brand.
Butcher says Build 7 began as a franchise business, but he pulled the pin because he didn’t believe in the model.
He says it is now just a marketing company.
Registered Master Builders chief executive David Kelly confirmed Eleven Limited – Lister is the director and sole shareholder – was not a current active member of the organisation.
‘‘During their membership Eleven Limited had several Master Build Guarantee applications declined,’’ Kelly said.
‘‘This was due to a variety of reasons including no payment for the guarantee being received by Master Build Services, insufficient information being received and contractual payment schedules not meeting Master Build Services requirements, for example deposits requested were above the recommended 10% threshold.’’
‘‘I can confirm that Eleven Limited intends to do right by its clients, and is seeking to resolve matters directly with the parties to ensure they can continue with their build projects.’’
Dean Lister, director, Eleven Limited