Government rescue package on the way for devastated Hotondo Homes clients

A government rescue package is on the way for Hotondo Home customers who lost their life savings when the New Town branch went bust, but those affected are worried it’s too late.

A GOVERNMENT support package is on the way for Hotondo Home customers who lost signifcant savings when the New Town branch went into receivership.

The package was hinted at on Tuesday by Premier Peter Gutwein, who said the full details of the scheme to assist those affected by the recent failure of Tasmanian Constructions Pty Ltd, trading as Hotondo Homes and Inside Out Constructions Pty Ltd would be revealed in the next 10 days or so.

Mr Gutwein said later this year the government would also be bringing back the home warranty insurance, which would otherwise have protected the Hotondo Homes clients.

The scheme was scrapped in 2008, making Tasmania the only state in Australia without those consumer protections to insure against builders going bust.

Hotondo Homes customer Nathan Meyers said it was outrageous that Tasmanians paid such hefty stamp duty fees without being afforded the basic protections when building a home that other Australians received.

Nathan Meyers and Jayne Dillon at Berriedale. Picture: Chris Kidd

Mr Meyers said the government should have done something about it a long time ago, and was worried that the newly announced rescue package could be too little too late.

He said even if most of their deposits were reimbursed, many clients would be unable to afford to finish their builds due to skyrocketing material costs and eroded worksites.

Additionally he said many clients were still burdened with debts and were currently bleeding money through rental costs, legal fees, and interest rates.

“Something needs to be done now. They need to act now. We can’t wait months while they work through red tape and bureaucracy,” Mr Meyers said.

“If we can get on the front foot it will help people in the future, but we need help now.”

It remains to be seen whether the clients will be fully or partially reimbursed for their deposits or whether the insurance will cover the remainder of their builds.

However Mr Gutwein suggested it would be similar to a warranty insurance scheme, but done as a one-off and applied retrospectively over the last year or so.

“What we’re looking to do is provide a bespoke scheme … whereby we can deal with those people who have been impacted through the Hotondo or the Inside Out Construction collapse,” Mr Gutwein said.

Master Builders Association CEO Matthew Pollock. Picture : Mireille Merlet

“We do have a significant number of people that have been impacted and we will look to ensure we can mirror the home warranty scheme in terms of the provisions we will make available to them.”

Master Builders Tasmania CEO Matthew Pollock said it was encouraging to see the government throw a lifeline to affected homeowners.

“Master Builders supports the government’s intentions to reintroduce a home warranty scheme so long as it is structured properly to not add unnecessary costs to building a new home,” Mr Pollock said.

“It is important that consumers have the confidence to invest in building a new home in Tasmania and having the right consumer protection measures in place is a key part of that.”

It remains to be seen how expensive the premiums will be, and how much this will add to the cost of building a new home in Tasmania.