Couple shocked at $0.0 insurance claim after their builder collapsed into liquidation

They were waiting for a big payout, but when this couple opened the much-anticipated email, they could not believe their eyes.

When Queensland couple Valerie and Stephen Kenner learned earlier this year that their builder had gone bust, they were concerned but not distraught.

With insurance on their nearly-completed building site, they were hopeful that they would be adequately covered and wouldn’t be left too much out of pocket.

Their builder, Landmark Building & Developments (Qld) Pty Ltd, collapsed into liquidation in March and has $3.224 million in liabilities, according to a statutory liquidation report.

But months later, after a protracted claims process, the couple has learned they are not entitled to a single dollar in compensation.

Late last month, after much anticipation, Mr and Ms Kenner, 51 and 43 respectively, received an email from the QBCC, which handles the state’s last resort insurance scheme.

In a promising start, the email’s subject line was “Claim Approval Letter”. But when Ms Kenner clicked on it, she saw a big fat zero for her claim.

“Total approved claim: $0.0,” it read.

The QBCC went on to explain that their original build price was “underquoted”, meaning the insurance did not cover them as the cost should have been much higher, and they would have to find a way to pay another $180,000 to complete the project themselves.

It’s “basically ruined us financially,” Ms Kenner, a mother-of-seven, told news.com.au.

The shocking email that showed them they were entitled to $0.0.

The Kenners have seven kids to look after.

Mr and Ms Kenner signed the contract with Landmark Building & Developments for a $299,000 build in Flagstone, in the City of Logan, at the end of 2021.

Given the struggling state of the building industry amid rising materials and labour shortages, the pair agreed to a $21,000 increase on the additional price just a month after signing the original contract.

Construction began last year and the building company told them they were just six weeks away from completion.

“Then we got the letter about the liquidation,” Ms Kenner recalled.

“We were pretty much in shock. We had paid up to date, we just hadn’t paid the final stage, the handover – we had $30,000 left.”

Since March, when the builder went under, they have gone through a nightmare process.

They are now paying rent for an extended period of time while also paying off the mortgage for the partially-completed house, which is just sitting there.

They also continue to pay water bills, electricity bills and council rates for a house they cannot yet use.

“We’ve had (other) builders use our electricity as well. We had to change the locks. They just plugged in their extension lead (to our powerpoints),” Ms Kenner added.

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Valerie and Stephen Kenner are wondering how they are not entitled to any insurance payout.

Their house when it was at frame stage.

Ms Kenner also enrolled her kids into a school at Flagstone, thinking they would be living in their dream home by now.

The problem is, they are renting in another suburb, Sunnybank, so it’s a 40-minute drive each way every day to take their children to school.

In that period of time, Ms Kenner’s eldest daughter also moved out of home thinking it would be “easiest” as her other six siblings are currently crammed into a small rental.

Ms Kenner has picked up six different casual jobs to keep the family afloat and also looking after the kids, while her husband continues to work full-time.

Their home was just six weeks away from completion when the builder went bust.

Mr and Ms Kenner plan to appeal the QBCC’s decision.

In their email to the Kenner couple, the QBCC said “at the time you entered the contract, (the price) should be $501,974.10”.

“Overall, we have established that an amount of $180,624.10 of underpricing will be increased into your liability based on the QBCC Underpricing assessment calculation attached”.

That means the insurance will only kick in if the build exceeds $180,000 to complete, leaving them to scramble the money together themselves to get their house finished.

Andrew Weatherley of insolvency firm WCT Advisory Group, the appointed liquidator of Landmark Building & Developments, said in a report submitted to the corporate regulator that others were in the same boat.

“My analysis established the costs to complete outstanding projects exceeded the remaining balance payable under each contract,” he wrote.

“The significant number of QBCC claims submitted further supports this view.”

In a statement to news.com.au, a QBCC spokesperson said they could not comment on this specific case due to privacy reasons.

“A consumer is entitled to claim assistance for the reasonable cost of completing residential construction work but the QHWS (the Queensland Home Warranty Scheme) does not compensate consumers for the risk they take when entering into a contract which is significantly undervalued,” they added.

The Kenners plan to appeal the outcome.

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