Major South Australian home builder Coast to Coast Homes collapses

The seventh SA home builder to collapse in less than a year owes millions to creditors — as the State Treasurer warns it could result in a record number of claims over 90 unfinished properties.

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The collapse of a seventh home builder in less than a year could be among the biggest in recent years, says Treasurer Rob Lucas — who will consider further reforms to strengthen the building industry.

Coast to Coast Homes was placed into liquidation on Friday, leaving 15 staff without jobs and 90 homes across the state unfinished.

The company owed $3.1 million to 180 creditors as of last month, according to a list of company and trade creditors obtained by ReGroup Solutions, who is acting for a number of contractors left out of pocket.

ReGroup Solutions turnaround practitioner Eddie Griffith said Coast to Coast Homes management had blamed the expansion of the business into Adelaide and slow progress on jobs as reasons for the financial difficulties.

Mr Lucas said his early advice was Coast to Coast’s demise after nine years of business could be the biggest in recent years.

“The largest number of (insurance) claims we have seen in recent years, I’m advised, was 38 claims for a particular building,” he said, expressing his sympathy to the affected homeowners.

Homeowners can claim up to $150,000 on builder’s warranty insurance premiums that have been underwritten by the government since 2013.

A property built by Coast to Coast Homes.

Mr Lucas said there was no “immediate Budget hit” to the taxpayer but said insurance premiums may need to be reviewed if “it is a big claim”.

The Master Builders Association of SA chief executive Ian Markos said a lack of financial acumen had been a “major factor” in recent building company collapses.

He said it should be mandatory for builders to undertake compulsory finance training before being granted a licence.

“Seven residential home builders have gone under in less than seven months. That is a clear signal something isn’t right in the industry,” he said.

“We think the time has come to enforce a skill level — including financial — that allows a licence to be granted or renewed.

“All approvals including home loan funding should require the licence of the builder to be verified, and all breaches should be strictly enforced with significant penalties.”

The logo for Coast to Coast Homes.

Coast to Coast Homes managing director Sean Craven did not return calls about the company’s closure.

Mr Craven and his son Steven established Regency Custom Cabinets in July.

Liquidator Timothy Clifton of Clifton Hall said staff entitlements would be covered by the Federal Government, and a quarter of superannuation was outstanding.

He said a clearer picture of the company’s debt should be known by early next week.

He said the company’s problems were caused by the “same old story”.

“They work on skinny margins, they are undercapitalised, a few jobs go bad and they can’t recover,” he said.

A property built by Coast to Coast Homes.

The director of a Yorke Peninsula-based cabinet-maker said Coast to Coast Homes owed him $63,000.

“We were just starting legal proceedings this week (to recover money) but it looks like we got in too late,” he said.

Steven Haskell, ex-director of collapsed cabinet maker Yeomans & Haskell, said Coast to Coast had owed the company a “significant amount”.

He would not say how much but his father Robert told The Advertiser in February, on the day his company was placed into liquidation, that two builders had failed to pay more than $100,000.

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