Couple paid $260k for one wall and a garage after Hotondo Home collapse
Hobart couple Roxy and Lachlan Goss shelled out their life savings for their dream home – but what they were left with has ruined them.
A Tasmanian couple say they have forked out $260,000 only to be left with a wall and partially built garage after the collapse of Hotondo Homes Hobart.
Roxy and Lachlan Goss, who have a three-year-old son and 15-month-old daughter said they were promised their dream home would be completed by June 2021, but now more than seven months later, it’s still a building site.
Ms Goss, 27, said they had paid amounts between $5000 and $10,000, before sinking a final $216,000 into Hotondo Hobart to get the project moving.
But despite this huge financial outlay, next to nothing has been completed.
“We had paid well past lockup stage and we were left with basically one wall and the garage was concreted and that’s it,” she told news.com.au.
“As of now we have had no communication from anyone on the Hotondo team whether that be higher up or office admin, so we have not got answers.
“I don’t really know where we go from here but we are a young family, it’s just my partner and I and my two kids and we were supposed to have this house before my daughter was born.”
Stream more property news live & on demand with Flash, a dedicated news streaming service. New to Flash? Try 14 days free now >
She said the news of the collapse was shocking and completely “blindsided” the family, with her 29-year-old partner now having to work two jobs to support them.
The mum-of-two said the family has no money left to continue building the home, predicting a “difficult” year ahead.
“I am very torn at the moment. I didn’t ever expect that this would be happening to us. I think that I was very shocked to begin with and it took me a long time to process that my dream house is not going to work out the way I wanted to,” she added.
“I think that I am feeling very failed as a person to be able to provide a home for my kids and very upset not knowing when I will be able to finish the build on this place.”
The family’s struggle comes as two former franchisees have hit out at Hotondo Homes Australia accusing the major building company of offering no support while still taking thousands in fees, after the collapse of its Hobart branch left 40 customers out of pocket and with unfinished homes.
They claimed that Hotondo head office would have known the Hobart franchisee was in trouble weeks before it went into liquidation, however Hotondo Homes Australia has insisted it only found out in late December.
On January 4 this year, the Hotondo Hobart branch collapsed, with a liquidators’ report showing that there is $1.33 million owed, but at least $1.2 million is outstanding to unsecured creditors.
The collapse has left many families out of pocket and without homes.
Put off building forever
Nick and Amber, who did not want their surnames to be used, are another young family that planned to build their dream home with Hotondo’s Hobart branch but instead have lost almost $21,000 with the collapse.
Nick said some of the money for their deposit came from cashing out long service leave from his fire protection job.
The couple also recently became parents with Amber, who works as a nurse, giving birth to a baby two months ago.
Nick said he had to hound the office for updates on the build with not much done after signing on in March 2021.
He got a tip-off from a builder friend the week before Christmas that the Hobart franchise was in trouble, but said he couldn’t get any answers from the branch or Hotondo Australia head office.
The 28-year-old said the couple were “distraught” by the news.
“It makes you feel pretty sick when you aren’t getting any straight answers,” he told news com.au.
“When I first found out I was just manic. It was lucky I was on long service leave as I was sending so many emails and phone calls and it was taking up my whole day on top of trying to support bubs.”
He said he rang Hotondo’s head office three days in a row when it first reopened in January but never had his calls returned.
It wasn’t until he sent an email with stories from the Mercury newspaper and screenshots from Facebook to Hotondo head office, telling them their name was “mud” in Tasmania that he got a response.
“Being a massive franchisor I thought they surely want to uphold their name, but they have basically left it all to the liquidators from all the emails,” he said.
“It looks pretty grim, it doesn’t look like we are going to get anything out of it all and I’ve lost hope.”
Nick said the home had been their first big purchase together as a couple and they were so excited, but they have been completely turned off building.
“I’m not going to be able to build again for a long time now and especially with prices having gone up,” he noted.
“There is $35,000 we have missed out on grants and the $21,000 deposit and on top of that the cost to build a house in Tassie in six months has gone up substantially and we can’t afford to build the house we wanted six months ago.”
No builder will take on the work
Another Tasmanian family, who have a daughter with a disability, said they have lost more than $30,000 and have nothing to show for it other than a development application from their local council, despite being told the home would be completed by November last year.
Peter, who did not want his surname used, said he receives a disability support pension while his wife works part time and the family sunk their life savings into building a new home with Hotondo Hobart.
“There isn’t a builder or company in Tasmania who is prepared to build our home that we contracted to build with Hotondo in March 2021,” he said.
“We are homeless and simply do not know what we will do. We are faced with either having to start all over again, building a smaller home or selling our block and try to get back into the inflated Tasmanian real estate market.”
Reasons for the collapse
Hotondo Homes Australia blamed a mix of supply and labour price increases, high demand from government Home builder grants and delays in material availability as factors that led to the Hobart branch becoming insolvent.
The national company added that the events unfolding in Tasmania were an “isolated case”.
“As a franchise network, every Hotondo Homes builder operates independently of each other and as such, are not involved with the Hobart franchisee,” the company told The Mercury.
“This is not a trend. Builders are navigating unprecedented spikes in the cost of materials and labour, widespread shortages in materials and trades, council delays and other ongoing impacts of the Covid-19 pandemic and current industry environment.”
However, news.com.au is aware of seven Hotondo Homes franchisees that have gone into liquidation in the past 10 years.
Hotondo Homes Australia said it became aware of issues with the Hobart branch in late December before commencing work “with our franchisee on their building workflow and financial status” and then being advised on January 7 that a liquidator had been appointed.
‘Absolutely dreadful’
But two furious former franchisees, who signed up to five-year contracts with the major Australian builder, have alleged head office would have known something was wrong with the Hobart branch when the bills weren’t paid.
A report from the appointed liquidator Revive Financial, lists Hotondo Building as a creditor, which is owed $115,370, and liquidator Jarvis Archer said he believes it is related to the national Hotondo office as the franchisor.
The former franchisees, who forked out tens of thousands to sign on but did not want to be identified, told news.com.au that the experience with Hotondo Homes Australia was “absolutely dreadful” and left them “broken”.
They were required to pay monthly fees of between $1300 and $1600 and up to 4 per cent on every building contract.
Neither were surprised by the collapse of the Hobart franchisee.
Both franchisees, who had worked in the building industry for years, said despite promises of support from Hotondo Homes Australia with systems, business development and sales leads, there was “very little” help.
It became non existent when they needed it most when Covid hit, they added.
Based on the east coast, both were led to believe that once they went live on the Hotondo website there would be an “avalanche of inquiries and leads” but this was not their experience, with just a handful of customers sent their way.
“Hotondo has literally the most horrid toxic work environment I have ever seen with a turnover of 15 to 20 staff a year,” one man told news.com.au.
“When we were doing our original training, one of the employees who was helping took us into conference room and said working there was like being on Survivor and it was about who is going to be voted off next and that was literally coming from a staff member.
“There’s no chance to give support to franchisees as they can’t keep their own staff.”
News.com.au reached out to Hotondo Homes Australia multiple times for a response to the claims but did not hear back.
Franchisees ‘close to breakdown’
Both the Hotondo Homes franchisees said they were lucky to continue in other jobs while running their business, which helped keep them afloat with the money from their salaries, with one even going so far as to “beg and borrow” funds from family.
“If I didn’t follow my gut and stay with the business I was working with … and I was on north of $130,000 because of all the overtime … we would have gone bankrupt,” the man said.
“Hotondo sign you up and put their name on door so they get the brand presence and don’t do anything to help you from there.”
“I refused to pay them in the end and said I was not giving them anything,” he admitted. “The sad thing is I’ve done the wrong thing as the franchisee in terms of the agreement but it’s only thing can do you can do, it’s the only power you have.”
The former franchisee said he got pretty close to a breakdown at one stage, was drinking too much and his marriage suffered.
More Coverage
The other said he was still $100,000 in debt from the experience.
“Once Covid hit, the support totally fell away and as far as I was concerned I wasn’t important as I wasn’t bringing money into the kitty and the way I looked at it, they just didn’t care,” he added.
News.com.au approached Hotondo Australia multiple times for comment.
Robin Williams’ former mansion sells for $29 million
The home where the beloved actor once resided has sold for $28.9 million — a year after hitting the San Francisco market for $40 million.
Sydney’s skinniest waterfront has eyewatering price
Sydney’s skinniest waterfront is about to hit the market to kick off the year in real estate and it has a jawdropping price tag, despite its size.
Archibald Prize winning artist’s creative haven for sale
Archibald Prize winning artist Guy Maestri is selling his $2.7 home, that’s full of some of Australia’s greatest art and holds some of the secrets of his success.