Hotondo Homes: Families across Australia impacted by collapses

One family is horrified that more Aussies have been left with unfinished homes and thousands out of pocket after their own “heartbreaking” experience.

When Michael Lazzarini saw the news that another Hotondo Homes franchise had collapsed he was devastated for the dozens of customers left with unfinished homes and missing money, having previously gone through the “heartbreaking” experience with his own family.

Back in June 2012, the dad-of-three had just paid an instalment of $75,000 to the franchisee of the major Australian builder, while his wife was in hospital with pregnancy complications.

But the very next week his builder, the Hotondo Homes Gosford branch owned by Jamdau Investments Pty Ltd, went into liquidation.

This left the family with an unfinished house, basically consisting of the shell with outer walls and doors, but nothing inside.

“It was one of the hardest thing I’ve ever had to do is tell my wife about the collapse. It was heartbreaking as the $75,000 we had paid [the] last week, we had just lost it,” he told news.com.au.

“My son was born and he was quite sick and we didn’t think he was going to survive, so we just boarded the house up for months.”

For Mr Lazzarini, it began an “extremely stressful” battle to get the family’s Central Coast house finished – a prospect that up to 40 customers from the Hotondo Hobart branch are now facing after its recent collapse.

The Lazzarini’s house was left unfinished after the company went into liquidation. Picture: Supplied

Building supplies and rubbish was left on site as the property was left unfinished. Picture: Supplied

Only the outer shell of the house was complete when the franchise collapsed. Picture: Supplied

History repeats as Hobart branch goes into receivership

On January 4 this year, the Hotondo Hobart branch went into receivership and left as many as 80 contractors and 40 customers in limbo with unfinished homes.

A report released last week by the appointed liquidator, Revive Financial, showed some tradies are owed between $75,000 and $100,000 for work completed for Hotondo Hobart, while customers’ amounts include up to $26,000 – though many of those figures are yet to be revealed.

Overall, creditors are owed $1.33 million according to the report, but at least $1.2 million is outstanding to unsecured creditors.

While Mr Lazzarini was lucky to be covered by NSW home builder warranty insurance, it is not available in the state of Tasmania, creating an even bigger hurdle for customers there.

However, Mr Lazzarini said the insurance money was not even enough to continue building.

He explained he probably met with every builder on the Central Coast, estimating 20 to 25 came on site to tell him there wasn’t a “chance” of finishing the home with the money left over.

At the time, he was facing having to move his family back in with his mum and dad.

“I was being stubborn and everyone was telling me to sell it and move on and cop the loss but I found a local builder and I think he felt sorry for me,” he said.

“So then we had to go back through and source our own floorboards and kitchen with our local builder to try and save some money to get it all finished with the money we had. We had to forgo a few things like airconditioning and cladding the outside of the house and rendering it, so we left it bare brick as that was cosmetic,” he said.

“It was extremely stressful, especially with a sick child at the same time.”

Michael Lazzarini and his family in their home after they had to battle to complete it once their Hotondo builder franchisee collapsed. Picture: Supplied

The inside of the house after the franchisee collapsed. Picture: Supplied

Working in printing, Mr Lazzarini said he had to put in long days to make sure the five bedroom, three bathroom house was finished.

“I paid a builder but I was doing labouring, like moving floorboards, but it was the only way to get it done. So I had to work a 12-hour a day in Sydney and do stuff on the house at night,” he said.

The 42-year-old claimed that the only assistance Hotondo Homes Australia’s head office offered during the experience was to direct him to claim on insurance.

He said his “heart sank” when he heard of the latest collapse in Tasmania.

The Central Coast man believes Hotondo Homes Australia needs to step up and take responsibility when franchisees collapse.

“They just can’t keep getting away with it, like the people in Tassie said it’s the biggest investment of your life and Hotondo [head office] say ‘It’s a franchisee, its got nothing to do with us’ and that’s even though they are using their name,” he said.

Mr Lazzarini ended up working as a labourer on the house himself with a builder who ‘felt sorry for me’. Picture: Supplied

He said the entire situation was ‘very stressful’. Picture: Supplied

Company says Tasmania collapse an ‘isolated case’

Hotondo Homes Australia blamed a mix of supply and labour price increases, high demand from government HomeBuilder 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 toldThe 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 going into liquidation in the last 10 years.

Back in April 2012, Hotondo Homes Portland in Victoria collapsed leaving a handful of homes under construction and suppliers and tradespeople thousands of dollars out of pocket.

At the time, Hotondo Homes managing director Michael Renwick told The Standard that the Portland branch collapse was “an isolated and unusual incident”.

But since then franchises around Australia have gone into liquidation.

Half completed Hotondo Home in Kingston after Hotondo Hobart goes into receivership. Picture: Linda Higginson

There was the Hotondo Homes Gosford collapse in 2012, which Mr Lazzarini was caught up in, and then Hotondo Homes Caloundra in Queensland in August 2015 which went under owing $850,000 to 115 creditors and leaving six homes unfinished.

The Courier Mail also revealed that Seachange Caloundra Pty Ltd, which was operating the Hotondo Homes Caloundra franchise, had its licence suspended six times in seven years.

The next year Hotondo Rockhampton went into receivership in November 2016, followed by Hotondo Homes Mildura in October 2019 with up to 40 subcontractors out of pocket and homeowners with incomplete houses, according to The Sunraysia Daily.

The next two Hotondo Homes franchises collapsed in Tasmania, with the Sorell branch closing down in May 2020 followed by Hobart in January this year.

Franchise network to ‘help small, local builders’

Hotondo Homes Australia said its national franchise network began in 1993, with a mission to help small, local builders survive in a challenging and competitive industry where large volume builders have a significant and ever-increasing market share.

“When local builders join the Hotondo Homes network, they change their operating system and trade name to that of our franchise system yet remain a legally and financially independent party,” they said.

“As part of their franchise agreement, they agree to operate under our system, which has been designed and proven to support long-term business success.”

It added that the “handful of businesses that have become insolvent do not reflect a pattern”.

Katrina Phillips doesn’t know how she will finish her house after handing over $64,000 for the final fit-out before Hotondo Homes Hobart collapsed. Picture: Facebook

No money to finish home

Katrina Phillips is one of the Tasmania customers caught up in Hotondo Homes Hobart branch collapse.

The disability support worker said she paid the company $64,000 just a month before it went into administration and claims she was “harassed” to make the payment from October, even though it wasn’t contractually due, before eventually giving into the “pressure” in December.

She was building a new home after her house burnt down in an arson attack in 2019.

“I lost everything except the clothes I was standing in. I lost everything. They couldn’t save one single thing from the house,” she told news.com.au.

“I was at work and got the phone call and by the time I got home, the fire brigade was there and everything was gone, there wasn’t anything they could save.

“That was a huge setback and it took me a long time to be able to emotionally even think about starting to try and start again. Then when I did I went with Hotondo (Hobart), who I thought was so trustworthy, and then to cop it all again. I feel like I’ve lost my own home again,” she said.

“It’s really soul destroying.”

Katrina Phillips’ house has been left without a toilet, bath or kitchen. Picture: Supplied

The grandmother describes the collapse of the Hotondo builder as an “incredibly cruel” experience as her home was due to be completed in November 2021 but it was pushed back by delays.

“It’s just so unfair and I’m sitting there with a house that doesn’t have any power, doesn’t have any water, I don’t have lights in the ceiling, I don’t have a toilet, bath or a kitchen; it’s just an empty shell sitting there,” she said.

“It’s just bloody cruel.”

The 64-year-old said she was hoping to retire in the next couple of years.

“I have rheumatoid arthritis which sometimes leaves me incapacitated but I’ll still be working in my wheelchair at this rate as $64,000 is a lot of money to lose when you’re on your own,” she said.

“Since I paid them that money all they have done is put door handles on my door. It’s cruel. I don’t know what is going to happen as they are saying there is going to be no money to retrieve.”

One of the unfinished properties from Hotondo Hobart. Picture: Linda Higginson

Ms Phillips’ house also has no power, lights, or water connected. Picture: Supplied

Pleas for help

Ms Phillips said she has felt physically ill since the collapse and a text message she received from Hotondo Homes Australia afterwards informing her that the Hobart branch was an isolated incident was an “insult”.

“They should be stepping up and making some sort of amends. I would never ever deal with them again regardless of whether it was a franchise or not. The fact that head office has sat there and said, ‘Oh so sorry, it’s not our problem’ … How can you sit back and watch people suffer so badly and just wipe your hands of it?” she said in tears.

“I don’t know where to go. I won’t be able to complete the build of my home, I haven’t got that type of money to be able to do that again. I just haven’t got that money.”

She has also called on the Tasmanian Government to step up and help affected customers out.

On Tuesday, the Tasmanian Government announced it will develop a financial support package to assist those negatively affected by the recent failure of the Hotondo Homes Hobart branch and will introduce home warranty insurance.

“We recognise that buying or building a home is the biggest investment many families will make, and we have already taken action to support consumers by announcing our intention to reintroduce home warranty insurance in Tasmania,” Attorney-General Elise Archer said.

“Home warranty insurance covers incomplete or defective building work in the event that a builder has died, disappears or becomes insolvent, and a is currently being developed by the Department of Justice and Department of Treasury and Finance. This model will be the subject of consultation with stakeholders in the coming months.”

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