Collapse of Hotondo Homes Horsham leaves couple who lost house to fire in limbo again - ABC News

Collapse of Hotondo Homes Horsham leaves couple who lost house to fire in limbo again
A Victorian couple say they bear no ill will towards the construction company whose collapse has left their home half finished.
Prue and Paul Beltz lost their house to fire in October 2020 and Hotondo Homes Horsham began rebuilding it in March this year.
The start of the build had been delayed by planning permits, issues with materials and tradespeople, and when the franchisee and other employees contracted COVID in February.
But last month, after 14 years in operation, Hotondo Horsham entered voluntary administration with 11 homes under construction, 11 employees with outstanding entitlements and nine homes agreed to but yet to be built.
It was the second collapse of a Hotondo franchise following the demise of the Hobart arm in January.
Mr Beltz says following every other setback, Hotondo Horsham's demise is a "kick in the guts".
"Our insurance covered rent for a year but we are now coming up towards two years afterwards, so we have had to pay a year's rent along with repayments on the house," he said.
"We keep saying we'll get there by Christmas, but right now it's Christmas 2023."
"I just want to get home," Mrs Beltz said.
"The house that burned down, we lived there for nearly 20 years and it was home. We'll get there one day."
She said the roof was set to go on the week the firm went under.
"I was in a meeting that [the franchise owner] was at and I said to him, 'I can't wait to give you a big payment', because we knew lock up would be fairly soon after the roof went on, and he said, 'I can't wait to get it'.
"That was probably a week before they went into administration.
"We assumed there would be cashflow issues because we assumed everyone in the building industry was having them as well.
"A lot of the delays we were putting down to the climate for building, because it is a bit of a rollercoaster at the moment.
"Every job gets held back a little bit so all those payments get held back a little bit too. [Hotondo] were probably building the houses at a loss."
The demise of Australia's construction industry was caused by speculation and greed, major developers argue, with more builders tipped to collapse over the next 18 months, leaving consumers in significant trouble.
Documents from administrators Worrells show Hotondo Horsham owes $1,543,360 to 27 creditors, including Mrs Beltz.
In a statement at the time, the Horsham franchise said it had been "extremely challenged" by record demand, rising costs, materials shortages and supply chain delays — problems common to the industry nationwide.
Megan Peacock from Master Builders Victoria said there had been 180 building and construction insolvencies in the state since the start of the year.
"But let me put that in perspective: There are 113,000 building and construction businesses in Victoria," she said.
"This year is still a lot lower [for insolvencies] than other years like 2019."
Ms Peacock said construction firms of all sizes had gone insolvent this year, not just franchises like Hotondo Horsham.
She said the industry-wide problems behind Hotondo's collapse were likely to continue.
"We are still seeing shipping container delays across the globe, there is still pressure on the market in terms of getting those materials.
"We are seeing an easing in timber and steel, [but there is] pressure now on plaster, insulation and componentry like door handles.
"We would hope to see some easing in 2023, but in saying that, we thought the same this time last year — we didn't predict more waves of COVID and a war in Ukraine."
Builders and their clients needed to have serious discussions about how to factor in costs increasing after contracts were signed, Ms Peacock said.
"Fixed-price contracts work really well for builders and consumers because they understand the costs and the stage of the build, but it needs a review insofar that where prices are going up, builders can't pass those costs onto consumers.
"If we are looking at inserting rise-and-fall clauses into fixed-price contracts, builders would need to stipulate exactly where they think prices will rise, and consumers need to sign off and agree to those before it happens.
"We've heard of consumers covering half the cost of price rises where they can."
Currently, builders cannot put rise-and-fall clauses into contracts under $500,000.
Ms Peacock said this proposal remained before Consumer Affairs Victoria.
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Mrs Beltz is sympathetic to Hotondo Horsham, saying it didn't do wrong by her and her husband.
"They never asked for any money before the stage was completed," she said.
"And we also have the domestic builders insurance which triggers if the builder becomes insolvent, so we've put in a claim with them and that is up to 20 per cent of the full contract price.
"We've had a local builder that I know through work come and offer to finish the job for us and two others, so we're fortunate that way … it will definitely cost us more than Hotondo's contract price, but that quote has to be accepted by the insurance [provider].
"The ones that are really going to battle are the ones whose houses had never started because they don't have domestic builders insurance; they will basically just lose their deposit."
The collapse of regional businesses cut much deeper than in capital cities, Mrs Beltz said.
"There are a lot of businesses in Horsham owed a lot of money and I feel really sorry for them.
"[The owner], like so many in Horsham, is a volunteer firefighter and involved in the pipe band … you just know more about them than you would in a city, they're not just a person with a business.
"I personally think he's feeling pretty shattered at the moment."
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