Consumer Watch: Don't pay too early

Ngaire And Eric Trimbach at their now-completed home in Kumeu. They are still $200,000 out of pocket. Photo / Michael Craig

Because a guarantee might not cover it

A couple who took out a Master Builders guarantee and paid more than $500,000 in progress payments on their new home are in danger of getting nothing back after their builder went under - because they paid too much in advance.

Paying in advance is something any business owner loves but, in the case of Kumeu's Eric and Ngaire Trimbach, it could cost them about $200,000. That's because Master Builders say they have paid too much in progress payments to Location Homes North, which went bust with the job unfinished. The Trimbachs are the second victims of the collapse of Location Homes North.

Another couple lost their $37,000 deposit because Stephen Hahn, the builder, did not fill in Master Builder guarantee forms, something the couple did not know until they tried to claim.

But Ngaire Trimbach said in their case, all the forms had been filled out. They paid $1200 for the guarantee, submitted their signed contracts and received a receipt from Master Builders, confirming the guarantee.

"We followed the Location Homes contract and made payments accordingly. A payment of $150,000 was paid when the walls had been gibstopped."

But when she contacted Master Builders, she was told that because she had made large progress payments, it would be hard to get compensation.

"Tali Ifi [Master Builders' claims adviser] said as the $150,000 was paid for work in advance that 'it would be very difficult' to get any financial help from Master Builders to complete the build, but he would send through the forms anyway.

"I wasn't satisfied with his response so I phoned again the next day and talked to someone else who also said 'it would be very difficult' to get any money out of Master Builders. I took this as a PC way of saying no to us."

Desperate to get the build finished so she had somewhere to live, Trimbach and her husband paid someone else to finish it.

The build's total cost was about $640,000 but LHN went under with $200,000 of work left to do. The Trimbachs had paid $575,459.

"I waited several days for the Master Builders forms to be emailed to me, with no luck. We had to make a decision, wait for the forms, fill them out, wait an unknown amount of time for a response from Master Builders, which we had already been informed was most likely to be negative, or sign up the now ex-Location Homes contractors and get on with the build."

By doing so, she was told she had voided her Master Builders guarantee. The house is now finished.

"Why did they accept our money if they don't accept what's in the contract?"

Since the first story on LHN [in this paper last week], Trimbach had contacted Master Builders again. Claims adviser Kirsty MacDonald said the claim was being reassessed. Chief executive Warwick Quinn said: "We are in the throes of obtaining more information and background from Mrs Trimbach."

He would not say how many guarantees were issued or claimed on per year. "The number of guarantees we sell and claims we receive per annum is commercially sensitive so I am unable to provide that information, except to say that they are not necessarily related given a claim can occur years after the guarantee is taken out."

Have you had trouble with a Master Builder guarantee? Contact editor@heraldonsunday.co.nz