Compensation offer for Hawke's Bay, Taupo, Gisborne A1 Homes clients

Homeowners left wondering how their houses would get built following the collapse of Hastings-based Fargher Construction have been given a ray of hope.

A1 Homes New Zealand said it would work with affected Hawke's Bay home buyers caught up in the collapse of Fargher Construction, which operated licences for A1 Homes in Gisborne, Hawke's Bay and Taupo.

The head-licensor A1 Homes NZ Limited announced, that in conjunction with Registered Master Builders Association of New Zealand, it would put together an offer to homeowners affected by the recent liquidation of licence-holder Fargher Construction Limited.

The affected homeowners will be offered an opportunity to have their houses completed on the originally agreed terms.

A1 Homes NZ general manager Matt Cunliffe said they will be working through the two main groups of homeowners that have been affected.

"The first group being A1 Homes clients whose homes are well underway. Their new home builds all have Masterbuild Guarantees which will be upheld as per original contract with the Registered Master Builders Association.

"The second group of clients are understood to have paid deposits and signed contracts with FCL, without FCL lodging jobs or obtaining Master Builders Guarantees.

"This process will be more challenging as all deposits have been lost, with the liquidator classifying those clients as unsecured creditors."

A1 Homes NZ managing director Ross Thomas said the company was still trying to get a full understanding of Fargher Construction's "unorthodox dealings".

"It has been an extremely difficult week trying to ascertain how things have gone so horribly wrong and I know the stressful predicament this leaves a number of families in.

"I want them to be assured they will all be given the opportunity to receive the full benefit of their deposits, and all homes will be commenced and completed as per originally contracted if that is what the clients choose".

He also noted that he had sympathy for the sub-trades and the suppliers, although unfortunately for them, their contracts were with FCL and those parties would need to register any claims with the liquidator.

"All relevant clients are being contacted as we speak, with the view of ascertaining where and exactly at what stage each build has progressed.

"Then our approach will be to have A1 Homes NZ representatives and management engage trades in conjunction."

Fargher Construction was put into voluntary liquidation last week, owing more than $1 million.

Liquidator John Fisk said not all final claims had been received yet but unsecured creditors - including suppliers and subcontractors - were owed $1.3 million.

Unsecured creditors - people who had deposits paid but no construction work undertaken - were owed $240,000.

Secured creditors claims amounted to $80,000, with preferential creditors (employees and IRD) owed another $50,000.

"A1 (the Licensor to Fargher Construction) is undertaking an assessment of the cost to complete the contracts that were in progress at the time of our appointment.

"Until we know what that position is, we will not know if any value will be available to Fargher Construction creditors from the contracts.

"Based on the information we have available to us from the company, we have contacted all clients that had work started by phone and email. We have also been in contact by email with all clients where contracts had been entered into.

"A1 Homes has the contact details for the parties with incomplete contracts."