State government steps in to save Felmeri customers

Desperate customers of the collapsed Felmeri building company have been thrown a lifeline, but the entire process has left one family wondering if they will even live in the house.

Felmeri customers Danita and Jordan outside their unfinished home at O'Halloran Hill. Picture: Ben Clark

The state government has stepped in to save some customers of the collapsed Felmeri building group by spending more than $1m to complete an access road.

The building company’s fall into administration left projects unfinished, including one 20-home development at O’Halloran Hill.

Other Felmeri customers have been able to access their builders’ indemnity insurance to bring in other companies to finish their homes.

But the O’Halloran Hill clients were left in a bind because Felmeri had failed to complete an access road to their properties.

A trench down the middle of the unfinished road means builders cannot safely access the sites.

The Department for Infrastructure and Transport will now arrange a contractor to fix the road and initially pay for it, but the government says it will look for “cost-recovery options from the developer and associated entities”.

It also says it will look at ways to prevent similar situations arising, to stop councils allowing subdivisions before financial security for infrastructure such as roads is in place.

The unfinished homes at O’Halloran Hill, made inaccessible by the lack of a road. Picture: Keryn Stevens

Allan Hirst has a half-finished house in the development and said he was grateful for the government’s intervention – but added it had been a tough for his family since Felmeri went into liquidation.

The 36-year-old father-of-three works as an electrician and said he and wife Monique were no longer sure they wanted to live in the house and may sell it because of all the stress they had endured, both emotional and financial.

“We are a single-income family paying two mortgage, two council rates, two water bills,’’ he said.

Mr Hirst said his bank had helped with a hardship pause, which was vital “otherwise we were done’’.

Allan Hirst and his daughter Lyla outside their unfinished home at O'Halloran Hill. Picture: Ben Clark

“The whole thing has been such a rough experience to be honest, I am out of my comfort zone dealing with all this,’’ he said. “It takes over your life to some extent.’’

Premier Peter Malinauskas said it was a “very unfortunate and unique set of circumstances that demands a unique response from government”.

“These families have been left in a dire situation through no fault of their own.

“In the middle of a housing crisis, I’m not prepared to sit by and let them suffer, losing more money, when their homes in many instances are nearly complete.

Felmeri customers Sam Carrison and Jessica Harrison outside their unfinished home. Picture: Ben Clark

Premier Peter Malinauskas with Felmeri customers outside their unfinished O’Halloran Hill houses. Picture: Ben Clark

“Quite frankly, I'm surprised a developer was given approval to build on these blocks without completing the roadway or providing financial security to do so.”

Felmeri’s collapse left more than 100 customers, including dozens of first-home owners, with unfinished projects.

The company was established in 2006 and initially focused on small housing and commercial projects, but before and during the pandemic it embarked on a major expansion.

It took on several major projects including its largest – the construction of 100 townhouses at the $42m Wallaroo Shores resort project.

Customer complaints flooded into the consumer watchdog earlier this year.

At the time, few people outside of the housing industry had heard of the family business that would become one of the largest corporate collapses of its type in South Australia.

Earlier this month The Advertiser reported pressure was mounting on the state government to fund completion of the road left unfinished by Felmeri.

In May administrator Leigh Prior from Agile Business Advisory confirmed close to 150 unsecured creditors were owed close to $2m.

It has also been revealed that the construction arm of the Peregrine Corporation is chasing an almost-$1m debt relating to incomplete construction work at The Bend motorsport park.