Gold Coast builder Pivotal Homes in liquidation with more than 100 homes now at mercy of QBCC

The future of more than 100 homes under construction by collapsed Gold Coast builder Pivotal Homes is uncertain. WHAT HOMEOWNERS MUST DO NOW:

Clients of failed Gold Coast builder Pivotal Homes have been urged to lodge a claim under the Queensland Building and Construction Commission’s insurance scheme, however what happens next is at the mercy of the industry.

The situation is likely to leave many families, who were expecting to move into their new homes, in very difficult positions as leases end and rentals continue to rise in cost and demand.

The compulsory Home Warranty Insurance Scheme is funded via builders and contractors, who collect a premium from clients and pay it to the QBCC to insure the work.

The QBCC may then assign another builder to complete unfinished work, however, the process is not quick, with the jobs going out to tender only after a claim is approved.

With high demand for builders, swift availability is not guaranteed.

The building industry is grappling with high demand and short supply.

The QBCC recommended homeowners seek legal advice about terminating contracts with Pivotal, as a termination deemed “invalid” would mean the homeowner is not entitled to claim under the commission’s insurance.

“If a claim is assessed as eligible for assistance the type of assistance will depend on the stage of the build,” a spokesman said.

“If the work has not yet started, the deposit will be refunded usually within two weeks once all required information is provided.

“If the work has started the QHWS will compensate the owner for additional costs to complete their home up to the compensation limit of $200,000 for standard cover, and $300,000 where optional additional cover was taken out.

“This process requires the QBCC to seek tenders from appropriate builders and takes longer to finalise depending on builder availability.”

Boss of collapsed builder slams price ‘gouging’ tradies

May 27, 2022: The boss of collapsed builder Pivotal Homes has savaged “gouging” tradies, who he said were taking advantage of rising supply costs to bump up their prices.

Fronting media less than 24 hours after his company went into liquidation, Michael Irwin said labour costs like bricklaying and framing had doubled in a year, without any real justification.

“As far as the tradespeople go, they have just been gouging the prices,” he said.

“There’s no need for them to put up prices from $1.10 (per brick) to $2.20 in a year.

COAST BUILDER CONDEV CONSTRUCTION COLLAPSES

But because there’s such a shortage of trades out there, there’s demand so they’re charging what they like.”

An emotional Mr Irwin said while Pivotal was still solvent, it would not have stayed that way if it continued to trade.

He said it was “devastating” and “gut-wrenching” to see his company end this way.

Mr Irwin said lockdowns, floods, Covid infections and constant rain had exacerbated the situation, obliterating the viability of fixed-price contracts.

“The government needs to step in because there are other builders out there, big builders, in the same position.

“If they don’t, it’s going to end up with carnage.”

The Surfers Paradise office of Pivotal Homes.

Major Queensland builder falls into liquidation

May 26: One of Queensland’s biggest home builders is in liquidation, leaving the future uncertain for more than 200 new home builds and 16 staff.

Surfers Paradise builder Pivotal Homes, once a sponsor of the Gold Coast Titans, went into liquidation late on Thursday.

The company was a category three builder, licensed for low-rise jobs up to $30m.

Queensland Building and Construction Commission (QBCC) records show it completed 211 jobs totalling $56.7m in 2020-21, and had completed 105 jobs worth $30.5m so far this financial year.

In a statement, the company said it had 103 houses under construction, in various stages from slab pours to turnkey, and 177 homes waiting on council approval.

Chris Cook and James Robba of Worrells were appointed as liquidators.

Managing director Michael Irwin said rising labour and construction costs had rendered the business unviable.

“In my 30 years’ experience I have never seen a set of circumstances like this and obviously we are not alone in these unfortunate conditions facing the industry,” he said.

“We are absolutely devastated for our 16 Pivotal Homes employees and assure all creditors, contractors and subcontractors have been paid in full.

“All purchasers are in a net gain position, meaning the work they have paid for has been completed. In fact, they have had more work completed on their homes than they have paid for.”

Managing director Michael Irwin. Picture: David Clark

The construction industry faces challenges on multiple fronts, as rising costs and supply chain issues leave many contracts unprofitable before building even begins.

The squeeze had seen major commercial builders ProBuild and Condev collapse in recent months.

Last week, Australia’s largest home builder Metricon Homes was forced to repeatedly deny it was facing collapse, amid rumours of cash flow issues and the sudden death of the company’s founder and CEO Marion Biasin.

The construction industry is under pressure from rising costs.

Derek Cronin of Cronin Miller Litigation, acting on behalf of Pivotal Homes, said liquidation was the only option left for the company.

“The decision for Pivotal Homes to go into liquidation has been based on forward projections dictated by the increasingly challenging market conditions, including the exponential rise in material costs,” he said.

“It is an unfortunate set of circumstances that is impacting on the industry across Australia.”

Mr Irwin started Pivotal Homes with former friend Lloyd Ross in the early 2000s, but has been its sole director since 2008.

The company was a Titans jersey sponsor for the Auckland Nines campaign in 2015.

Know more about this story? Email [e-mail]