Melbourne family loses dream as Grandeur Homes liquidated
A Melbourne family caught up in the collapse of Grandeur Homes say they have now been forced to spend more than $500,000 to fix “butchered” works and finish their dream home.
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A Melbourne family caught up in the collapse of Grandeur Homes say they are trapped in a “living nightmare” having to spend hundreds of thousands of dollars to fix dodgy works and finish their dream home.
Michel Hanna, who has to date paid Grandeur Homes $490,000, said after more than two years of construction he has been left with a half completed house that is “falling apart”.
“The quality of the work is insanely bad, anyone can see it’s warped. Bricks are broken and are falling off,” he said.
“They completely butchered the windows. They left materials on site in the rain for months.”
The Hanna’s home was one of 109 under construction when Grandeur collapsed in August owing up to $7.3m including $139,000 to employees and more than $6m to unsecured creditors.
Creditors have now voted to liquidate the builder, which had customers across Melbourne’s outer north, east and west as well as in Geelong and Bendigo, a report by Cor Cordis administrator Sam Kaso reveals.
Among suppliers facing significant losses is prefabricated timber trusses maker Melbourne Truss which is owed nearly $500,000.
Mr Hanna said the building of his Burnside Heights home faced significant delays since construction began in May 2022.
“It seems they were short in cash from early days. (They) simply told me, ‘I’m waiting for another site to collect a payment for one site so that I can pay a deposit for your frame’,” he said.
“It took them nine months alone to complete and pass the frame stage. It failed inspection four or five times.
“More than two years later, the house is 80 per cent done. They haven’t done the balcony or alfresco and there’s no doors – it’s sitting there completely open.”
He said he is now being quoted more than $500,000 by other builders to finish the house.
“It was meant to cost $260,000 to finish the home, but now with the collapse, I’m being quoted more than half a million,” he said.
Mr Hanna said he went into Grandeur Homes’ office multiple times to confront the directors after countless calls and emails went unanswered.
“I once waited in reception for three hours because they didn’t want to meet with me,” he said.
“They basically said ‘pay us more and we can escalate the process for you’.
“Once when I went down there they had locked the door and there were tradies protesting out the front. They were saying they were owed $100,000 and weren’t going home until they got their money.”
Grandeur Homes was started in 2015 by director Gurpreet Sidhu.
The company traded as part of the Grandeur Group, which also includes Sidhu Homes.
ASIC documents show both Grandeur Homes and Sidhu Homes as registered to the same Epping office address.
Sidhu Homes underwent a name change, to Vista Building, days before Grandeur Homes collapsed into insolvency.
Mr Kaso said Grandeur Homes may have traded while insolvent “during FY24 but possibly earlier”.
Trading while insolvent means a company took on new debts when it knew it couldn’t pay them back.
He said the director may be exposed to an insolvent trading claim but warned creditors it was “inherently difficult” and “costly to pursue”.
The report also identified $269,000 worth in related party claims, including to the director Mr Sidhu and another company, Sidhu Epping Trust.
Mr Kaso said further investigations would be conducted to verify the debt and determine whether there would be funds to pay back creditors.
A customer was also detailed in a creditors meeting asking whether investigations would be conducted into payments made in advance to building works being commenced.
“We understand that customers begun to become frustrated by the alleged lack of communication by the company, with respect to building delays and the status of contracts,” Mr Kaso said.
“We have been advised that some customers had made progress payments to the company in advance of the completion of the stage the payment was attributed to.”
The report says Mr Sidhu attributed their collapse to the Covid pandemic, associated lockdown periods, significant cost increases in the construction industry and delays in supply of building materials.
“The contracts which the company had entered into with customers mostly comprised of fixed price contracts, which meant there was an inability to pass on any price increases to the customer,” Mr Kaso said.
“The above, in conjunction with the delays in the supply of building materials, meant that the said contracts were no longer profitable to the company, which in turn had a negative effect on the company’s cashflow and viability in its current form.”
Grandeur was contacted for comment.
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