Hotondo Homes Australia reveals factors surrounding New Town franchise liquidation

Hotondo Homes Australia has revealed what led to the Hobart arm of the construction franchise meeting its untimely demise. LATEST >>

Hotondo Homes Australia has revealed what led to the Hobart arm of the construction franchise meeting its untimely demise.

A liquidator said on Thursday some 80 contractors, 40 customers and five employees had been impacted by Hotondo Homes Hobart going into liquidation on January 4.

The national Hotondo Homes company said a mix of supply and labour price increases, high demand from government HomeBuilder grants and delays in material availability were among the factors which led to the New Town-based branch becoming insolvent.

The construction company said labour shortages and council delays amid coronavirus also contributed.

“These factors have created an unprecedented and challenging environment, which placed significant pressure upon the franchisee with regards to the company’s workflow, then in turn negatively impacting the business’ cashflow,” Hotondo Homes Australia said.

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

But the nationwide company said 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 said.

“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.”

The company said it became aware its franchise had entered liquidation three days after the fact.

“We are assisting the liquidator where we can,” Hotondo Homes Australia said.

“Before we were advised that the Hobart franchise had gone into liquidation, our team reached out to as many clients, contractors, and employees as we could, up until we were advised that the liquidator had taken over.

“As the franchisor, this is a devastating outcome and we are working with the liquidator to get the best outcome possiblefor all involved.”

‘Nightmare’: Family homeless amid Hotondo Homes liquidation

Disability support pensioner Peter has sunk his life savings on a “dream home” project with collapsed construction company Hotondo Homes New Town.

The local franchise entered liquidation on January 4, with Revive Financial liquidator Jarvis Archer saying some 80 contractors, 40 customers and five employees had been impacted.

Peter, who is in his 60s, has become homeless waiting for his forever home to be built.

The pensioner said he signed a contract with Hotondo Homes New Town in November 2020.

“Hotondo weren’t the cheapest but they were a recognised brand,” he said.

“We’d seen their product over the years and admired it, that’s part of why we went with that.”

The retiree and his wife spent all of their money on the build.

“We were future-proofing because of my age and my disabilities,” Peter said.

“My daughter has a disability and she is with her mum in Melbourne for a medical appointment.

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

“You can just imagine what this has done to our family.”

Peter said they were relying on the generosity of friends and family, house sitting anywhere they could for a place to stay.

Their development application was approved in the last week of December last year, but only days later the New Town branch of Hotondo Homes went into receivership.

“We were worried for the last six months because the atmosphere in the New Town office just became increasingly more toxic,” he said.

Hotondo Homes Australia said their dealings with the Hobart team were consistently professional, saying they “cannot comment without understand the client’s involvement with the franchisee”.

Peter said his family was stuck trying to find builders to take on the contract.

“It’s been a nightmare,” he said.

“We can’t afford to get back in the market. We’re facing the prospect of maybe having to live in our caravan on a block of land.

“The place we’re in at the moment is a granny flat and it’s not big enough for us all so we’ve had to split up.”

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

Peter was “touched by the local guys, the little fellas” who had offered to help in the aftermath.

A contractor, who wished to remain anonymous, said his small business of tradies was $75,000 out of pocket.

The contractor said he completed some four or five building jobs over Christmas for Hotondo Homes New Town clients, but he hasn’t received a cent.

“I only found out (the company) was in liquidation two days ago,” he said on Thursday.

The tradie said he had been dealt a hefty financial blow.

“It’s been tough, I don’t like to bring my work home with me but with something like this you’ve sort of got to,” he said.

He said he had his reservations about working for the company after seeing the Sorell branch enter liquidation a few years ago.

The Mercury has contacted the former owner of Hotondo Homes New Town for comment.

Liquidator Mr Archer is investigating when and how the company became insolvent, with his findings anticipated to be reported to creditors in three months’ time.

He said it was “not clear” whether refunds would be issued to stakeholders.

Liquidator explains what’s next for bust construction company

Hotondo Homes in Hobart has entered liquidation, with the appointed liquidator investigating the cause of insolvency and saying the status of customer refunds was “not clear”.

The company, which had offices in New Town, sent an email to customers on Wednesday night saying the franchise had gone into liquidation on January 4.

“We understand that the Company was in the process of constructing a residential dwelling for you.” the email read.

“We are currently working with the Company’s staff and contractors to understand the current status of each contract and the options available to you.”

Revive Financial liquidator Jarvis Archer confirmed his appointment earlier this month with the New Town branch.

He said no other branches were involved.

Revive Financial Partner Jarvis Archer is a liquidator.

“It is currently unclear when the Company became insolvent,” Mr Jarvis told the Mercury.

“My investigations have commenced into the company’s affairs, insolvency and the causes of failure.

“The findings of these investigations will be included in a report to creditors within three months from the date of my appointment.”

Mr Jarvis said he would communicate with key stakeholders – including customers and creditors – and collate their claims against Hotondo Homes.

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

He said about 40 customers were affected, either because they had paid deposits but not seen any construction commence, or because their builds were not completed.

“My team has made contact with all of the company’s customers to assist them to understand their position and available options in an effort to limit any loss to them,” he said.

“I am assessing the status of each project that was underway when the company ceased trading.

“It is not clear at this stage whether any refunds will be paid to customers.”

Mr Jarvis said a further 80 suppliers or subcontractors and five employees were affected.

Hotondo Homes enters liquidation leaving Tasmanians thousands out of pocket

Hotondo Homes in Hobart has entered receivership leaving dozens of people thousands of dollars out of pocket.

The company’s liquidation comes after industry insiders speculated its imminent closure just a few weeks ago.

A customer of the company received an email last night stating that Hotondo Homes was placed into liquidation on January 4.

“We understand that the Company was in the process of constructing a residential dwelling for you.” the email read.

DESOLATE: A Hotondo Homes worksite in Lindisfarne sits seemingly abandoned. Picture: Kenji Sato

“We are currently working with the Company’s staff and contractors to understand the current status of each contract and the options available to you.”

As reported by ABC Hobart as many as 80 contractors and 40 customers are likely to be financially impacted.

One Lindisfarne resident told the Mercury that she had been told by a worker late December that the company was closing down indefinitely with the construction site on her neighbour’s property abandoned.

According to the Australian Securities and Investments Commission (ASIC), a liquidator was appointed to Tasmanian Constructions Pty Ltd on January 4.

The company – which the ASIC notice says trades as Hotondo Homes New Town – is listed as being “in liquidation”.

“Notice is given that at a general meeting of the members of the company held on (January 4), it was resolved that the company be wound up,” the ASIC notice said.

A previous ASIC notice had said NB Contracting Pty Ltd, which formerly traded as Hotondo Homes Sorell, was insolvent from May 6, 2020.