Fallout from failed firm

ANDREW GORRIE/The Dominion Post

DREAM DASHED: Shona Shaw paid David Reid Homes Wellington a $42,200 deposit for a new home that has not been built. She is still waiting for a $25,000 refund, agreed to after lawyers' negotiations.

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Disgruntled clients and subcontractors left out of pocket by a failed Wellington building company are angry.

David Reid Homes Wellington went into voluntary liquidation on Monday, leaving at least 10 houses half-built and owing contractors thousands.

It is the fourth David Reid business to go under in recent months, after Manawatu, Pukekohe and Marlborough franchisees were declared insolvent.

Solo mother Shona Shaw paid David Reid Homes Wellington a $42,200 deposit in October 2007 to build her "dream home" in Churton Park.

The building consents were secured and the section readied but then work stopped.

"Nothing happened. I kept phoning [the franchisee] Steve Franklin to ask why nothing was happening."

In July, she told him she wanted her money back.

After protracted negotiations between their respective lawyers, Mr Franklin agreed to repay $25,000.

Ms Shaw is still waiting.

"He told me cash flow was tight but I would get it as soon as he had it ... I still have a contract with him even though someone else is now building my house."

Her lawyer was told she would have the money by the end of this month, but this week she learned the company had gone into liquidation.

As well as losing her money, she has been paying rent on a house for herself and her two children since selling her house in June.

"That's when I expected to move into my dream home."

Another homeowner, who is waiting for his house to be completed, said the first he knew of the collapse was when he opened his Dominion Post yesterday.

His house is largely complete, but needs "finishing touches" and a compliance certificate. But he is angry it took two years to build instead of six to nine months and ran $150,000 over budget.

"I kept having to pay up but he couldn't say what had happened to the money."

Painter John Braddock is owed $49,000 by David Reid Homes.

He said payment had been "a bit slow" for some time, but he was reassured after a meeting in October with Mr Franklin and David Reid Homes general manager Ben Allan, who told him "everything would be fine".

"We went and did another four houses after that, and won't get paid for those either."

He and other contractors are meeting the Master Builders' Association today to sort out what will happen with the existing houses.

Michael Bartoli, whose house was mostly completed by David Reid Homes two years ago, said he was still waiting for some "finishing touches" and repairs, such as a crack in the garage floor and painting.

He had contacted Mr Franklin repeatedly about the work. "They made out as if it was the painter's fault for not doing the work, but I think the painter must have been owed money too."

He is now employing plasterers and painters at his own expense to finish the job.

"But at least my house is finished."

Mr Franklin could not be reached for comment yesterday.

- © Fairfax NZ News