Two Auckland tiny house/transportable cabin companies specialising in the affordable end of the market have gone under, with the owner blaming Covid and reduced demand.
NZHousing and Affordable Homes Construction of Dairy Flat are in liquidation and receivership, owner and director Ian Ralph Fotheringhame of Orewa confirmed.
In his first report, liquidator Greg Sherriff of Waterstone Insolvency said Fotheringhame had put both businesses into receivership and liquidation.
"According to the director, the company was associated with a group of companies
which constructed tiny homes based in Dairy Flat," Sherriff wrote in his first report just out.
"The director has advised that poor trading conditions caused by Covid-19 precipitated the liquidation of the company."
Kieran Jones and Steve Khov have been appointed receivers.
Inland Revenue, Metal Line Roofing of Tamaki, World Coffee and Fotheringhame are creditors known to date. Sherriff cited a $40,000 shareholder loan from Fotheringhame, unsecured creditors claiming $45,000 and security holders with $25,000.
It was too early to say if anyone would be paid or what the deficit would be.
The Personal Property Securities Register shows United Timber Merchants of East Tamaki and Akarana Timbers have securities over Affordable Homes Construction.
In 2019, Fotheringhame told Kaitaia's Te Hiku Radio that his businesses could assist with the housing crisis because small homes could be rented to buy.
He cited a government ministry, referring to a New Zealand Herald article on the housing crisis.
Fotheringhame said that was "a $100m problem that the Government's got, where they stated that there's nearly 1900 households in motels and emergency housing, another 780 households in transitional housing and motels, effectively paying out an average $1500 per week.
"So we've got a rent-to-buy scheme that we're doing in conjunction with MSD where for the price of about $500 for a couple of cabins which is effectively three-bedroom cabin or accommodation and they can go on a rent to buy scheme and at the end of five years they own their own tiny home," he said in 2019.
The Herald has asked MSD if it has had anything to do with him and is awaiting a reply.
"This effectively could save the Government $1000/week if that's what they're paying in a motel, so for every customer, we're putting in one of these, we're saving them $52,000/year," Fotheringhame said on the radio broadcast.
Asked where land could be sourced from, he said: "Essentially the whole scheme revolves around some access to land. This can be put on friend's, family, parents', even older parents can put it on their children's place at the back of their section. Alternatively, it can be put on Māori land as well.
"Our first test case is on a block of Māori land down in Matangi just by Pokeno and they're looking initially at putting up to 14 cabins on those blocks. That way there's assurance for the clients who have somewhere to put these on," he said.
"The problem that MSD or the Government has is that they have all these clients but they need somewhere to put them. So we're saying there are a number of properties that they can put them on the back and after five years, they can move them onto their own land or Māori land or whatever," he said.
"We've linked up with a major finance company to finance these things but essentially they can be done by anybody," Fotheringhame said.
The receivers' first report is yet to be issued.
Further inquiries about the businesses and their insolvencies have been made this morning to Fotheringhame directly, the ministry, the liquidator, receivers and secured parties registered on the PPSR.