Felmeri directors still in business as failed builder’s clients fork out thousands to see homes finished

One year on from the collapse of Felmeri Group, their clients have forked out thousands to move into their homes, while the builder’s directors continue to work in construction.

One year on from the multimillion dollar collapse of South Australian builder Felmeri Group, customers have forked out thousands in extra costs to finally move into their new homes.

One young tradie took out $100k in personal loans, while another couple doled out tens of thousands in interest payments because of delivery time blowouts.

At Felmeri’s O’Halloran Hill community village, four of the 20 promised homes still remain unoccupied and a much-touted childcare centre remains little more than a foundation and roof.

Four of Felmeri Group's O'Halloran Hill dwellings remain unoccupied. Picture: Mark Brake

Edward Gilmore and his 18 month old son Andy, who just moved into their new O’Halloran Hill home two months ago. Picture: Mark Brake

In July 2023, Felmeri Group went into liquidation owing $28.3 million with about 120 unfinished dwellings, but customers raised flags about the lack of ongoing work on site months earlier.

Several residents told The Advertiser they faced difficulties finding another builder to take on the work.

Edward Gilmore, 35, finally moved in with his wife and children two months ago but spent $30k out of pocket to fix defects – after already cashing in $150k worth of builder’s insurance.

“Because it took so long to get going, prices were continually going up,” Mr Gilmore said.

“The main plumbing for the kitchen was about two and a half metres in the wrong direction … It would have been in the middle of the living room if they actually built it.”

Car mechanic Jordan McBain, 34, was even worse off and had to borrow “around $100k” to finish the house.

Three months after moving in, Mr McBain said the financial blow “put a sour spot on the whole experience”.

“We were meant to move in 2021 … We had to move around three times before we finally got here,” he said.

A liquidator’s report found that while Felmeri Group encountered “difficult trading conditions”, there was also “significant use of funds for non-business related purposes” and “poor strategic management”.

Frank Felmeri junior ran Felmeri Group with his father, Frank senior, and the pair continue to operate another construction company called Marcalek. Picture: Bianca De Marchi

Director Frank Felmeri junior was also found to owe his company $144k in personal expenses.

Though the liquidator found it was reasonable to suspect Mr Felmeri and his father, Frank senior, knowingly traded insolvent and made false or misleading statements, ASIC has taken no legal action against them and could not comment on its investigations.

The Felmeris continue to run a parent company called Marcalek, which is contracted to finish the childcare centre within the O’Halloran Hill community.

However, Marcalek sought several time extensions from Marion Council which have lapsed and a council spokesman said it was now liable for enforcement action.

Felmeri customers Sam Carrison and Jessica Harrison outside their home. Picture: Ben Clark

Living partners Jessica Harrison and Sam Carrison, 33 and 28, said they were “relieved” when Felmeri went into liquidation because “it meant that things would finally start happening again”.

While they were promised their home in mid-2022, they only moved in this past June and ended up paying an extra $40k in interest payments to the bank.

The unfinished childcare centre at the Felmeri's O'Halloran Hill development. Picture: Mark Brake

The Advertiser understands that liquidator Agile Business Advisory is pursuing recovery actions against the Felmeris and related companies.

Last year, the state government was also forced to spend $1m to finish an uncompleted road leading into the O’Halloran Hill community.

Infrastructure and Transport Minister Tom Koutsantonis said it was “gratifying to see some residents now moving into their homes”.

“The state government acted quickly and changed planning laws to ensure this doesn’t happen again and South Australia’s consumer watchdog, Consumer and Business Services, is investigating Felmeri’s conduct,” he said.

Frank Felmeri junior was contacted for comment.

Originally published as Felmeri directors still in business as failed builder’s clients fork out thousands to see homes finished