Melbourne builder sends email warning customers about upcoming liquidation

When Jen* checked her emails last week and saw one unread message from her builder waiting in her inbox, she opened it with dread and her worst fears were realised.

EXCLUSIVE

When Jen* checked her emails last week and saw one unread message from her builder waiting in her inbox, she opened it with dread.

She hadn’t heard from her builder for weeks, despite multiple calls and emails, leaving her with no explanation on why the build on her four-bedroom, two-bathroom home had been stalled for months.

As she read the email, sent on Saturday from residential building company Joestarr Group, it confirmed the Victorian homeowner’s worst fears.

“The harsh reality is on the 2nd of August we will be put into liquidation,” Joestarr Group wrote.

“We apologies (sic) for the inconvenience this will cause, there just isn’t any way out.”

Melbourne-based Joestarr Group is due in the Victorian Supreme Court on August 2, which is next Wednesday, after an excavation company called Saliba Excavations Pty Ltd initiated winding up proceedings over an unpaid debt.

The email has devastated customers like Jen and at least 30 other homeowners that news.com.au knows of.

“It’s soul destroying,” Jen, a healthcare worker, told news.com.au. “I’ve had a week off work, I’ve cried every single day, it’s our dreams, we’ve done everything right. We’re financially and mentally ruined.”

This is the sixth building company this week revealed to be heading towards the chopping block amid an industry-wide crisis.

The email that confirmed customers’ worst fears.

“We at Joestarr Group would like to apologise for the lack of communication of late,” the email reads.

“As I’m sure you may have heard of the latest challenge that has been thrust upon our little company.

“Due to the events of the last two years, cash flow problems, increased supply cost and shortages, it has made conducting business in a usual manner very difficult.

“But we have faced these challenges head on and have had open dialogue with suppliers and trades.

“But it I was all in vain … it seemed as though this wasn’t enough and had put us a position where we simply cannot continue. This decision was not on a whim, and we explored every which way to avoid this situation.”

Joestarr Group, which is registered under the name Joestarr Homes Pty Ltd, has been incorporated since 2008 and said on its website most of its builds are done “in and around Melbourne”.

News.com.au has contacted Joestarr Group for comment.

Jen and Damien’s build has been impacted.

The couple have been left furious by the news.

Jen and her partner Damien* signed a $370,000 building contract with Joestarr Group in 2021 and nearly two years later, the house is still unfinished.

“We’re currently paying $450 a week rent and also paying a $500,000 mortgage for this property we can’t live in. It’s financially destroying us,” Jen said.

The couple, in their late 20s and early 30s, who are based near Geelong, live in a rental a five-minute drive away from their building site.

“We don’t like to drive past it, it’s too upsetting. There’s no end in sight,” Jen added.

When the builder goes into liquidation on Wednesday, this will trigger insurance to kick in for their build — but the entire insurance process will take several more months, and financially they’re not sure if they can hold on for that long.

What has left them even more frustrated is the fact they recently paid a $126,000 invoice for the lockup stage of their build.

Just four days later, Joestarr Group warned them of the impending liquidation.

They also visited the site and realised it was not complete. There are no doors or cladding, according to the customers, and there’s also no tap, no stormwater drain and no sewage system.

The $126,000 they paid.

“It’s arguably (been) the worst experience of our lives,” Damian told news.com.au.

He added that “It was just so obvious that they had no intention of starting our house within the time frame” stipulated in the contract.

Another customer who preferred to remain anonymous said their building site had not been touched since December last year.

“Trying to get responses to emails or return phone calls has been impossible,” the told news.com.au.

“This is an absolute nightmare for all of us, but sadly we know there are so many like us out there.”

Their home was left out to face the weather for four months.

So far this year, more than a dozen builders have collapsed.

This week alone, a number of construction firms have liquidated, including three more in Melbourne – Construct Homes Pty Ltd, placed into receivership on Thursday, Kleev Homes which owes $3.29 million to 162 unsecured creditors and Avra Group, leaving at least one family with an unfinished home.

On Monday, Sydney building company Allura Homes Pty Ltd went into liquidation, plunging 39 homes into jeopardy, leading to 11 people losing their jobs and with debts of $3.3 million to 102 creditors.

Earlier that same day, a prominent Western Australian builder Modco Residential went into voluntary administration.

Australia’s 13th biggest builder, Porter Davis, also collapsed earlier this year, placing 1700 projects and another 779 empty blocks of land in jeopardy across Victoria and Queensland, while more than 1000 unsecured creditors owed a whopping $71 million.

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Originally published as Melbourne builder sends email warning customers about upcoming liquidation