In a potential breach of the Fair Trading Act, the troubled franchises of Manawatu's Jennian Homes and Milestone Homes have been advertising themselves as members of the trusted Master Build Guarantee scheme when they were not.
And as liquidators pore over the company's affairs, the house belonging to the owners of the failed franchise is on the market for $1.35 million.
But the string of creditors owed $1.19m collectively will unlikely see a cent of this, as the house is not owned by the company – instead it's listed on property records under the name of Anthony and Stephanie Scott.
The husband and wife team operated the Jennian franchise in the province for a decade until its collapse late last month.
The pair also own a Milestone Homes franchise.
Jennian and Milestone are related building companies, both of which operate franchises throughout New Zealand.
While Manawatu's Jennian franchise is in the hands of liquidators, none have been appointed for Milestone Homes Manawatu, show Companies Office records.
But the company's telephone number has been disconnected.
Both the websites for Jennian and Milestone say all franchises are covered by Master Build Guarantees.
The well-known guarantees act as a form of insurance for residential building work worth more than $25,000.
The Jennian Manawatu webpage displayed the Master Build member logo last week, although this has since been removed.
The Milestone Homes Manawatu page was still displaying the logo yesterday.
However, the Master Builders Federation yesterday confirmed both Jennian Manawatu and Milestone Homes Manawatu had ceased to be a part of that scheme in December.
The federation's marketing and membership manager, Tracey Bree, declined to say why the companies stopped being able to offer guarantees.
The federation's website says Master Build Guarantees are not automatic on hiring a registered master builder, and documentation must still be signed.
Falsely advertising being a member of the scheme does, however, put Jennian Manawatu and Milestone Homes Manawatu at risk of breaching the Fair Trading Act.
"Businesses are obliged to ensure that the information they do provide is accurate and that important information is not withheld," a Commerce Commission fact sheet says.
Mr and Mrs Scott did not return calls to the Manawatu Standard.
Jennian's business development manager, Dave Wilson, said he was unavailable to talk this week.
Last week he said there was one house under construction by Jennian in Manawatu. Work on that and dealing with other clients would be completed by the parent body, which was looking to establish a new franchise in the region, Mr Wilson said.
Liquidator Rod McKenzie's first report on Jennian Manawatu found it had an estimated deficit of $1.06m.
Trade creditors are owed $781,924, with building supplier Carters $376,123 out of pocket.
Even the Manawatu franchise's parent bodies are owed about $57,000.
If the scant assets are sold at their book value that would almost cover the $62,427 owed in wages and holiday pay, and $55,243 to Inland Revenue for unpaid GST.
Inquiries for more than $1.35m were being asked for the Scotts' Colyton Rd property, a four-bedroom house on a 9.347 hectare section.
- Manawatu Standard
The $850m Transmission Gully will be ...Related story: Ball gets rolling on Transmission Gully