Felmeri Homes went into liquidation last month, leaving many projects unfinished, including one at O’Halloran Hill.
The State Government underwrites mandatory Builders Indemnity Insurance, which protects homebuyers against financial losses if a builder dies, disappears, or becomes insolvent. That insurance is now available to many of Felmeri’s customers who have homes under construction.
But customers at the O’Halloran Hill development are unable to use insurance settlements to finish their houses, because the developer has not completed internal roadworks, leaving a trench down the middle of the roadway, meaning other builders cannot safely access the homes.
The highly unusual situation has left 20 families who bought home and land packages within the development facing an uncertain future, with deteriorating financial positions while their homes are unfinished and uninhabitable.
To provide urgent relief to those families, the State Government will fix the internal road. Preliminary estimates sought by Consumer and Business Services indicate that may be in excess of $1 million.
In the first instance, the Department for Infrastructure and Transport will immediately arrange for a contractor to complete preliminary works inside the development to ensure that builders can then finish work on the homes.
While the government will fund those works upfront to ensure work can begin quickly, it is currently examining cost recovery options from the developer and associated entities.
The development was originally approved in 2015 by the City of Marion as the planning and development authority. Subsequent approvals were provided by council in 2019 and 2020.
The State Government is examining mechanisms to prevent future instances where a council allows subdivision to occur prior to the construction of necessary infrastructure without requiring financial security.
Consumer and Business Services launched an investigation in May, prior to the company going into administration and suspended Felmeri’s license to prevent it from entering into any new builds.
As put by Peter Malinauskas
This is a very unfortunate and unique set of circumstances, that demands a unique response from Government.
These families have been left in a dire situation through no fault of their own.
We have been working hard to support consumers to access Building Indemnity Insurance, while the Member for Davenport Erin Thompson has been busy making sure the special circumstances of these 20 families at O’Halloran Hill are well understood within the government.
In the middle of a housing crisis, I’m not prepared to sit by and let them suffer, losing more money, when their homes in many instances are nearly complete.
Quite frankly – I’m surprised a developer was given approval to build on these blocks without completing the roadway, or providing financial security to do so.
We’re examining options to make sure this doesn’t happen again.
As put by Andrea Michaels
This is an appalling situation for these families that should never have been allowed to happen.
The Government has been monitoring the collapse of Felmeri closely over the past few months and we will continue to investigate, and prosecute, if there are grounds to do so.
In the meantime the Government will step in and build the road so these people can finally move into their homes.
As put by the Member for Davenport, Erin Thompson
It should have been a happy and exciting time for these families, many of whom are building their dream home. Instead, it’s been a living nightmare.
After being let down by this developer time and again, these families have been desperately seeking help.
It’s disappointing that it has got to this. But I am pleased that our State Government can step in and ensure these families are not left homeless.
I know our community will also help out wherever we can, with working bees and other supports to get these families into their homes as soon as possible.
