NSW and Victorian building companies join growing pile of collapsed construction firms

Building companies are dropping like flies and two more have collapsed just days apart, leaving homeowners and tradesmen reeling.

Building companies are dropping like flies and two more have collapsed just days apart, leaving homeowners and tradesmen reeling.

On June 26, NSW-based luxury builder Millbrook Homes collapsed into liquidation owing more than $4 million to roughly 80 creditors.

Then just four days later, on June 30, Victorian residential construction firm Bentley Homes also appointed liquidators as its debts piled up to $1.8 million.

Millbrook Homes specialised in luxury custom builds and the average home it built was worth “substantially north of a million dollars” according to the appointed liquidator, John Keenan of insolvency firm BRI Ferrier.

As a result, he explained that some houses experiencing defects are making substantial claims against the now defunct company.

“They’ve ceased trading upon my appointment. Unfortunately there was no way to restructure it,” he told news.com.au.

Luxury builder Millbrook Homes has gone bust.

With its head office in Bella Vista in Sydney, Millbrook Homes had been on the rocks for some time, after an affiliate company went into liquidation.

In December, Elderton Homes appointed administrators, impacting homeowners in Greater Sydney, Central Coast, and the Illawarra. The same director ran Millbrook Homes.

“This is a fallout from the Elderton Homes collapse,” Mr Keenan said.

“As a result of the collapse, they had some licensing and insurance restrictions. Combine that with market conditions which have been deteriorating …”

There are only six unfinished projects, although Mr Keenan acknowledged “they are larger end builds”.

A number of completed builds have also been impacted, as they have been left with little chance of recourse for any defects the company left them with.

“There’s around $4 million owed (to between 75-80 creditors), including a decent amount for uncompleted projects,” he explained.

Of that figure, $1 million is owed to tradies and other unsecured creditors, who number around the 50 mark.

Sadly, the company has less than $100,000 in assets.

Just 72 hours later, in a different state, Melbourne builder Bentley Homes also collapsed.

Ronnie Brown and his family have been devastated by the collapse of Bentley Homes.

Bentley Homes had been in operation for 17 years.

Meanwhile, Bentley Homes, which had been in operation since 2006, succumbed to tough market conditions in the construction sector.

Its collapse left 50 homeowners with partially incomplete projects while another 26 homes had not yet started construction.

Around 34 homeowners who had paid an initial tender fee of between $2,000 and $9,000 have also been left out in the cold.

More than 170 creditors were owed $1.6 million according to initial investigations, but this figure has risen to $1.8 million according to the most recent liquidator’s report from early July.

Bentley Homes has assets worth an estimated $266,000.

One of the unlucky people caught up in the builder’s liquidation is Ronnie Brown, 40, who, along with his wife and two daughters aged 8 and 13, have been left with an incomplete house and mounting rents.

The family have been left paying rent and a mortgage.

They are entitled an insurance payout of up to 20 per cent of their contract price from the VMIA.

“The VMIA (the Victorian home insurer) called me today and their process takes so long,” Mr Brown told news.com.au.

“It takes 90 days for them to assess if I have a claim, then 14-21 days for them to get quotes and another 14-21 days for them to come up with an amount that I will get.

“My family and I are not in a financial position to pay rent and mortgage for six months while the VMIA go through their process.”

When Bentley Homes went under, 11 employees lost their jobs. They are owed $77,000 in unpaid wages, leave and superannuation.

Timothy Holden of insolvency firm Crouch Amirbeaggi is the appointed liquidator.

“Supply chain, staffing issues and cost over runs were very common in the construction industry during the past 12 months,” he said in a media statement.

“The director has advised the liquidator these variables were material factors in thedemise of the family-owned business.’

Bentley Homes went into liquidation at the end of June.

It comes as the entire building industry is in crisis because of supply chain disruptions, skilled labour shortages, skyrocketing costs of materials and logistics, locked-in price contracts and extreme weather events.

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

On Monday, news.com.au reported that another Melbourne builder, Como Homes, is facing the possibility of being ordered into liquidation, with a definitive court date set for Wednesday after racking up at least $1 million of debt among 13 creditors.

Less than two weeks ago, Perth-based building company Flexible Homes bit the dust.

Last month, news.com.au also reported that Melbourne construction firm Red Bluff Homes had gone into liquidation amid a dispute with a customer over suddenly cancelling the contract.

Last month, another Western Australian firm, the Slatter Group, also went into liquidation, after being in business for 20 years.

Interface Constructions Victoria, which specialised in childcare and education projects, also appointed external administrators in May.

PBS Building, a multimillion-dollar firm which did a mix of commercial and residential projects across Queensland, NSW and the ACT, officially collapsed, leaving 180 staff and 80 projects up in the air.

Earlier this year, three prominent building companies collapsed a day apart from each other, with NSW apartment developer EQ Constructions going bust owing up to $50 million, then Perth building company called Hamlen Homes going into administration with $1.4 million reportedly owed to creditors and the next day Melbourne-based residential builder Hallbury Homes went into voluntary administration.