Sangong Homes faces $1m lawsuit over unfinished work on Myrtle Bank townhouse

An Adelaide developer has filed a $1m lawsuit against a local builder, accusing it of refusing to complete construction of his dream home after years of delays.

Omid Rad with son Aria at the incomplete townhouse in Myrtle Bank. Picture: Matt Loxton

An Adelaide property developer has launched a million dollar lawsuit against a local home builder, accusing it of refusing to complete construction of his family’s “dream home” after more than two years of delays.

Omid Rad claims Sangong Homes abandoned the Myrtle Bank building site in March, leaving him with an incomplete townhouse, and forcing him to sell his existing home and move into a rental property in order to repay lenders amid a surge in interest rates.

The company denies the claims and has indicated it will defend the lawsuit.

In a statement of claim filed in the District Court, Mr Rad claims Sangong had initially promised to complete construction of the third and final townhouse in his development by August 2021.

He claims that a year after missing the original deadline, the builder, and its director Xiaoshan Sun, entered another formal agreement promising to finalise building work by the end of December 2022.

Aria Rad with his dad, Omid, at the unfinished Myrtle Bank house. Picture: Matt Loxton

However, Mr Rad claims the builder failed to complete work by the revised date, leading to the project grinding to a halt in March, with Sangong refusing to undertake any further work at the site.

Mr Rad’s company Group Kinetica is suing Sangong, and its sole director Xiaoshan Sun, for breach of contract, negligence, misleading or deceptive conduct and misrepresentation, seeking an injunction requiring the company to complete the project, as well as $1m in compensation for unliquidated damages relating to the delays, building rectification work required due to poor workmanship and surging interest costs.

He claims interest rates on loans he had taken out to fund construction of the townhouse increased from as low as 2.59 per cent in March 2022 to as high as 8.79 per cent, which he would not have had to pay had the build been completed on time.

He said it left him with no choice but to sell his existing home within the development – in order to repay lenders – and relocate with son Aria into a nearby rental property.

Omid Rad, pictured with son Aria, claims Sangong Homes abandoned the Myrtle Bank building site in March, leaving him with an incomplete townhouse. Picture: Matt Loxton

“I’ve lost my house – I basically exhausted everything, including most of my personal and financial resources, in order to keep the project going, because something that was supposed to take nine months has taken three years, and I’m still expected by the bank to pay the mortgage,” he said.

“And the mental drain is unbelievable. It’s affected my health physically, my health mentally, and my family as a whole – no one should have to go through all of this. I shouldn’t have to beg somebody who I’m paying money to, to build the house.”

Mr Rad said he had lodged several complaints with Consumer and Business Services (CBS), but to date no action had been taken.

A spokesman for CBS said it was “currently assessing a complaint in relation to this trader, to determine whether any further action is warranted”.

In their defence, Sangong and Mr Sun argue the delays to construction were outside of their control, blaming difficulties sourcing building materials including timber, insulation and gyprock, design changes that required additional approvals and rain delays.

They say they were entitled to stop work on-site in April after Mr Rad refused to pay an invoice for work undertaken by the company.

Mr Rad argues the invoice had been issued for work that has still not been completed.

Several calls to Sangong Homes went unanswered, and the company’s website appears to be deactivated.

However Jia Xiao, the lawyer representing Sangong and Mr Sun, argued many of the delays to construction were caused by Mr Rad’s interference and ongoing amendments.

“Our position is that the delays, to a great extent, were caused by the applicant, because they kept changing things and they didn’t give enough information to my client to work on,” he said.

“And then of course Covid had an impact as well.”