Building firm's collapse devastates homebuyers

By Wayne Thompson

A company that builds houses from Waiuku to Whangarei has gone into liquidation, leaving customers wondering whether they will get back their deposits of $25,000 to $50,000.

Meridian Homes Ltd of Orewa had 30 contracts for homes, with half under construction, said joint liquidator Paul Sargison.

Managing director Dean Hopper blamed the collapse of the six-year-old company mainly on significant delays in getting building consents for homes.

By the time the council gave consent, he said, the cost of the building had exceeded the original contract price and profit was lost.

With a website jingle "The building company that puts people first", Meridian offered a design and build service for homes mainly in the $180,000 to $220,000 range.

The company was a registered master builder and offered the Master Build guarantee.

"I think most customers will have guarantees and they will be covered if the documents were sent in," said Mr Sargison.

But an Aucklander who had signed up Meridian to build a home in Warkworth said last night that Master Build had not received his guarantee application form.

Eric Thompson also said there was not even an engineer's report or builder's plans to show for the $28,000 deposit he paid in late August.

Master Build cover for loss of deposit was only up to 10 per cent of the contract price to a maximum of $20,000.

"I thought I would get something back," Mr Thompson said.

Another customer, Gaynor Ashman, said a start was made on her new home at Greenhithe last Wednesday after she paid $50,000 to the company.

"The excavator was pulled off the section on Monday, leaving just big piles of earth."

She and her husband, Trevor, and their three children were renting a house in anticipation of moving into a new home on their section.

"We have probably lost about $40,000."

Mrs Ashman said she was a Meridian sales consultant for six months until she had to stop work because her 13-year-old daughter was ill.

"I feel terrible because I sold Eric [Thompson] the house."

A project manager at Meridian, Richard Borey, said he was owed wages and holiday pay and his wife was owed $5000 for draughting services.

Mr Borey said about 15 sites still needed building consent from councils and those customers would be out of pocket.

About 20 homes were at least half finished and about 15 not started.

The Northcote resident said he invited customers to hire him as their project manager to get their homes built on at-cost basis.

He said savings from not having to pay a builder's profit loading as well as Master Build's compensation for non-completion meant customers might not lose.

The company had 11 staff and a manager.

Mr Sargison, who is joint liquidator with Gerry Rea, said Mr Hopper and his wife, Linda, were co-owners of the company and they had put significant sums into it to enable it to go forward.

But the company could no longer pay its debts as they fell due.

Mr Sargison said Meridian Homes Ltd had no relationship to any other Hopper family companies.

Mr Hopper said he had carried out repairs costing as much as $100,000 in one home because of "very poor quality" subcontractors.

"It's cost me everything, my house ... except for what I'm standing up in," said Mr Hopper, who has been a builder for 23 years.

Master Builders Federation chief executive Pieter Burghout said that in some council areas across the country building consents could be delayed up to six months and rising costs meant a difference between contract and actual costs.

He said Auckland had experienced shortages of subcontractors for four years but in the past nine months the market had eased and the problem was not so pressing.

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