Families left with half-finished homes after company goes into liquidation

Amanda Blake and her husband have to re-pay for some of their renovations.
Amanda Blake and her husband have to re-pay for some of their renovations.

The housing minister is investigating whether a company which Kiwi families say left them with half-finished renovations breached new disclosure requirements.

Renovar Ltd, of which Jonathan Sommers was the sole director, was put into liquidation on August 9.

And the liquidator says it's unlikely any of the complainants will get their money back.

Homeowner Amanda Blake claims she and husband Stuart paid $200,000 to Sommers for an upstairs renovation and new bathrooms in their Orakei home in September last year.

A month after renovations were meant to start, in February, they said they found out Sommers hadn't started to get council consent.

He completed the framing for the upstairs bedroom and ensuite, the wiring, part of the plumbing and the downstairs bathroom, Blake said.

In May, they claim renovations ground to a halt as they waited six weeks for Sommers to organise the scaffolding to put the roof on. In June, they contacted a lawyer with serious concerns and discussed getting out of their contract with Sommers.

Amanda Blake said she was unable to contact Sommers via phone or company email.

The couple will have to pay around $100,000 extra for their renovations but are determined to finish the house and move on with their lives.

Blake urged people to do their research before engaging with a builder.

The Blakes have poured over $200,000 into their renovations.
The Blakes have poured over $200,000 into their renovations.

"We've gone through being really angry to really upset. Now we've just got to get it done. It is what it is. We just really need to stop him doing it to anybody else."
In an email Sommers, reportedly now in Sydney, confirmed to the Herald his business failed due to financial trouble.

"Jobs were underpriced. People I hired didn't work out... Talk to the liquidators for more financial information."

He estimates creditor exposure was close to $150,000, not the millions that have been reported elsewhere. Sommers said he is trying to deregister his business in Australia.

"No I'm not starting anything in Sydney, I had intentions to when I had a business in NZ but that was months ago and before financial trouble. Yes I have a registered business here but it takes two months to deregister and I've done all I can."

Building and Housing Minister Dr Nick Smith said the Ministry of Business, Innovation and Employment is investigating an allegation by the affected home owners that Sommers did not show evidence of finances and experience.

Under new legal building requirements that came into effect in January last year, builders are required to provide full financial and historical disclosure, their level of insurance, qualifications and experience on contracts of more than $30,000.

If there has been a breach, builders may be open to prosecution.

"A key inquiry that I'll be asking my ministers to check is whether Mr Jonathan Sommers met that legal requirement," Smith told the Herald.

"He may be open to prosecution if he has not.

"The investigation is in its early stages and no further comment can be made."
When asked if he had disclosed financial and historical disclosure, Sommers said Renovar wasn't a building company and didn't fall under those requirements.

The Blakes don't want anyone else to be left in the situation they've found themselves.
The Blakes don't want anyone else to be left in the situation they've found themselves.

"Our sub-contract builders had all needed credentials to carry out the projects and they were introduced directly to the homeowners. Renovar was in place to coordinate these contractors through project management. This was made clear to every single client. As for contracts and insurance details this was sufficiently provided. "

Liquidator Simon Dalton said it seemed unlikely that the homeowners will get their money back.

"It is not possible for us to currently determine if a distribution would be available to unsecured creditors but, it seems fair to suggest, that based on the currently identified assets, it looks unlikely that unsecured creditors will receive a distribution.

"The homeowners affected by this company collapse will be unsecured creditors. We have yet to be contacted by all of them and would urge them to please get in contact with us so we can determine their claim and investigate the circumstances behind their claim."

Nick Smith said the building industry is booming with $200 billion worth of construction work set to take place over the next six years.

He urged people to be cautious when selecting their building contractors. He recommended builders that are members of the New Zealand Certified Builders and Registered Master Builders.

"[They] tend to have a better track record, they're not perfect but you're taking significantly less risk."

He also advises property owners to pay a 10 per cent deposit and the rest of the money on completion of the job.

"I get worried hearing about people forking out large sums for building projects at the beginning.

"But there is no substitute of buyer beware and make sure people use reputable firms."

- NZ Herald

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