Australian home building nightmare as Privium enters administration

The collapse of home builder Privium has left hundreds of homes unfinished, with dream homes now in doubt across Victoria, NSW and Queensland.

Annie and Raf Solomon have been left waiting for a year for their house to be built after troubled builder Privium walked away. Picture: Steve Pohlner

The collapse of one of Australia’s largest home builder Privium has left hundreds of homes across Victoria, NSW, and Queensland unfinished, while subcontractors are owed at least $28m.

But resolution and relief are nowhere near at hand, with legal issues complicating attempts by customers to claim for jobs half done.

The toppling of the home building empire behind Privium has been looming for weeks, with reports first landing at the NSW office of Fair Trading as far back as November 5.

Subcontractors reported they stopped being paid by the company in recent weeks.

But on Wednesday the formal notice of voluntary administration landed, with FTI Consulting handed the keys to the crashed company.

The group of companies will now fall under the control of administrators John Park, Joanne Dunn, and Kelly Trenfield.

FTI Consulting said they would seek to make a recommendation for the future of Privium, however the fate of those with home construction contracts with the company is uncertain.

The administrators will conduct an independent assessment of the financial position of Privium.

FTI Consulting noted they would make decisions in the best interest of the creditors and stakeholders.

“The Administrators will work closely with the applicable regulators in Queensland, New South Wales and Victoria to ensure individuals receive assistance and, if appropriate, have their properties completed by an alternative builder,” FTI Consulting said.

The administrators said they would make a high level creditors update in late November.

Privium, which started life in Queensland, also trades as Impact homes.

The company was build was former carpenter Rob Harder, riding high on the boom for suburban living.

Rob Harder started life on the tools as a builder’s labourer and carpenter. Picture: Nigel Hallett

Company records appear to point to trouble at the top for some time.

Privium, which has not filed its financial accounts for the most recent financial year, reported a $28m loss in the 2019-2020 financial year.

This came after the company pumped out more than $22m in dividends as well as throwing $11.9m at an investment in a company called Growme (Aus) which it then wrote down just a year later to just $615,038 in value.

The collapse of Privium has triggered crisis meetings at the NSW Home Building Compensation Fund icare.

However, the status of the business as in voluntary administration may complicate any resolution for insured customers in NSW.

icare allows customers to make claims while the company is under external administration, but if the insurer accepts claims and Privium emerges from administration icare may be forced to deny claims and refer homeowners back to the home builder to resolve issues.

Customers have also making claims against the company at NSW Fair Trading, with 14 landing in the past week.

In Queensland more than 160 homes are unfinished.

The Victorian Managed Insurance Authority said its records showed almost 300 insurance policies against Privium for ongoing projects in the state and six claims made against the builder to date.

All domestic building projects of $16,000 or more since 2010 have been required to purchase cover with the VMIA.

VMIA said until the formal notice of administration was lodged to the corporate regulator customers would be unable to claim, however two customers have already lodged papers.

The collapse of Privium leaves several hundred residential projects unfinished ahead of five days of rain set to strike Melbourne.

Annie and Raf Solomon last year knocked down their existing home at Birkdale in Brisbane‘s bayside suburbs to make way for a new house that was supposed to be built by Privium.

But almost a year after signing a contract and paying a $12,000 deposit, they are still living in rental accommodation and desperately trying to locate another builder.

“There were constant delays from the builder and they just did not return phone calls,” said Ms Solomon, who has two young children.

“We were supposed to be in the house by now. Our dog has had to be housed away from us during this whole time because we are in a unit.”

Ms Solomon said the best the state‘s industry regulator – the Queensland Building and Construction Commission – could do when the couple contacted them was to advise them to seek legal advice.

Originally published as Australian home building nightmare as Privium enters administration