Builders upset over false ads

Last updated 05:00 06/03/2012

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Registered Master Builders is considering taking failed Taranaki housing company Dream Homes to the Commerce Commission for "fraudulent" branding, the federation's chief executive says.

The Taranaki Daily News revealed last week that Dream Homes used a Registered Master Builders logo on its promotional material despite having had its application declined.

Last Tuesday, Dream Homes went into liquidation owing more than $1.5 million to creditors.

Yesterday Master Builders chief executive Warwick Quinn said it would consider lodging a formal complaint with the Commerce Commission if it would help creditors get compensation.

"If it would assist people getting their money back we'll see what we can do," Mr Quinn said.

Because Dream Homes was not a Registered Master Builder, customers who had built homes with the company would not be secured against their investments.

A Master Build guarantee protects homeowners against loss of deposit, non-completion, defective workmanship, rot and structural defects or if the builder is unable or unwilling to put things right.

In 2010, a complaint to the Commerce Commission saw two directors of a Christchurch-based building company that had gone into liquidation pleading guilty to multiple charges of breaching the Fair Trading Act.

The company, Balmoral Homes, was suspended from the Registered Master Builders Federation in 2007, but misled customers into thinking the company was still registered.

The directors were fined $15,000 each and were ordered to pay $97,000 in reparation and $30,000 for emotional harm reparation in total for six complainants.

Mr Quinn said such incidents were uncommon and difficult to control.

"If someone is deliberately going to set out and commit fraud then that's quite difficult to police."

Dream Homes liquidator Kim Thompson said unauthorised branding was a serious offence.

"That's outside the realms of liquidation."

Once alerted to the unauthorised branding Master Builders instructed Dream Homes to remove the logos, which it did.

No subsequent action was taken.

Dream Homes director Thomas Buckthought said he was leaving Taranaki and selling his four-bedroom home for an asking price of $499,000.

New Plymouth man Mr Xiao, who did not want his first name published, was a Dream Homes customer fooled by the unauthorised branding.

Mr Xiao said he signed a contract with Dream Homes in November 2010 to build a three storey, five-bedroom home in Hine St, worth more than $700,000.

The contract required a 10 per cent deposit of $70,000 but the plans failed to get past the consenting stage because they did not meet building codes.

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People building houses with Registered Master Builders should phone their regional office or look on the federation's website to confirm the builder is registered, Mr Quinn said.

Contracts should also include Master Builder documentation, he said.

"The first port of call is to just check with us.

"It's just a phone call.

"If they had gone on the website and had a look they would have figured out pretty quickly that they're not Master Builders."

- Taranaki Daily News

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