Zealous Group collapse: sister company leaves homeowners hanging

Homeowners in Melbourne’s south stung by a property developer’s bust have been left “absolutely helpless”, after it was revealed they cannot yet claim insurance or proceed with building works.

The Zealous Group collapse has left a string of unfinished homes across Melbourne’s southern suburbs, including Eitan and Daphne Carmi’s Bentleigh East property. Pcture: Josie Hayden

Inner south homeowners stung by a property developer’s bust have been left “absolutely helpless”, after it was revealed they cannot claim insurance or proceed with building works until a sister company is liquidated.

Zealous Group, which specialised in upscale developments across the inner south, was last week appointed a liquidator by the Federal Court.

But its sub-set company Zealous Homes — which ASIC documents seen by the Leader show is run by the same director, Steve Somchanmavong, and has only Zealous Group as a shareholder — is still solvent.

Now owners of 11 unfinished and abandoned homes in Bentleigh East, Murrumbeena and Hampton have no avenue for help.

Homeowners have been left hanging. Picture: Josie Hayden

Nikoli Lovell and other homeowners have now been told by Victorian Managed Insurance Authority (VMIA) they cannot claim insurance or proceed with a new builder until Zealous Homes is liquidated.

Ms Lovell said there had been no progress on her unfinished Bentleigh East home since October last year.

She said she had unsuccessfully tried to reach Mr Somchanmavong, who still has an active building licence, since January.

Some clients, who are close to completion and sick of waiting, have elected to cut their losses and move on.

But Ms Lovell, whose home is only partly complete, said moving on was not an option for her.

She said she tried contacting ASIC for help, to no avail, and the next step was to take the director to court for breach of contract — but that was not financially viable.

“This vicious cycle goes on,” Ms Lovell said.

“Most of the trades and suppliers had contracts with Zealous Group whereas the clients building houses had contracts with Zealous Homes, so even when … liquidators (were) appointed, we are still stuck.

“Our only avenue of hope is some employees were not paid … and one of them is taking (Mr Somchanmavong) to court. If that doesn’t work out, we are literally in the hands of the liquidator.”

Homeowners say attempts to contact Zealous Homes’ director Steve Somchanmavong have been unsuccessful. Picture: Josie Hayden

MORE: DEVELOPER GOES BUST, BUT ‘WHERE WERE ALL THE WATCHDOGS?’

‘LIVES HAVE BEEN RUINED’: OWNERS SHATTERED BY DEVELOPER BUST

PROPERTY MARKET FACING TURMOIL AS DEVELOPER GOES BUST

VMIA spokesman Andrew Drever confirmed the authority could only offer further support to homeowners “if Zealous Homes Pty Ltd is declared insolvent and unable to complete projects”.

Consumer Affairs spokeswoman Lucy Teal said if a solvent builder was not complying with a contract, the owners should seek assistance from independent government agency Domestic Building Dispute Resolutions Victoria.

State Government spokesman Nathan Motton previously said the DBDRV provided “free dispute resolution services for builders and building owners … without the cost and time often associated with courts and tribunals”.

Mr Somchanmavong, liquidator David Ross of Hall Chadwick and DBDRV have not yet responded to the Leader’s requests for comment.

Info: consumer.vic.gov.au

**** Leader previously reported Sarah Berezowski, from The Fine Print, was Mr Somchanmavong’s legal representative. This is not the case. Ms Berezowski acted for the plaintiff to send Zealous Group into liquidation.