Nicheliving cuts deal that leaves taxpayers forking out $40 million to build unfinished homes
For the builders are doing it tough and the right thing…. Why this particular builder is special and get "free out of jail card"
Niche Living Decisions
edgar28 on 14/10/2024 - 14:26
Last edited 14/10/2024 - 14:33 by 1 other user
Last edited 14/10/2024 - 14:33 by 1 other user
Comments
Just feel bad for those builders who did the right thing.
With such precedent, many builders might follow suit…. Bad for the industry
normal day under corporate socialism: privatise profits and socialise risks
Agree, we have seen countless builders make greedy and reckless decisions because they know they can get away with it. This decision by the WA Govt just confirms it.
Yep, and they will just create a new company under a new name.
Your builder collapsing is a risk that you accept when you choose to build.
This is what the mandatory building insurance covers.
The problem is - effectively - the government is forcing/agreeing to close the business, which isn't something the insurance company would normally cover. (If the builder had gone bankrupt - as this one probably would… eventually - then sure the costs would be borne by QBE)
I suspect the $40m is probably an overestimate, but it will largely depend on how much NicheLiving underquoted to get the work, and how much the costs have risen in the interim.
The insurance cover is limited so doesnt matter about Niche Living underquoting.
"In Western Australia, The Home Indemnity Insurance policy covers the completion of the residential building work at no additional cost to the owner to a limit of $200,000 if the builder dies, disappears or becomes insolvent." from www.commerce.wa.gov.au
This means that $40M is for about 200 houses.
If however you have to demolish and start the build again due to poor quality and deteriotation of a site sitting open to the elements for years that $200k might not
be enough.
10 years
Okay, but what’s stopping them from just making a new building company under a relo or the Misso’s name?
Already happened. In the article:
In fact, just last week they launched real estate agency Australian Property Alliance, with Bitdorf holding an agents license.
Sadly…..
lol my bad didn’t even read that far before being outraged
What an industry
@Jimothy Wongingtons: Niche recently began using 'Australian Property Alliance' as the trading name for its real estate division. Last month it registered a new company 'Urban Infill Developments' which the ABC understands will be its development company.
@edgar28: You know what plan of that is. Take money with one then syphon it to the other which is behind a family trust of some type and make all the money disappear, then customers and tax payers (ATO) all get to hold the bag
@Jimothy Wongingtons: I had someone send me a quote instead of $510,000 + GST it says $51,000 + GST.
Most of them can't even itemise what they are going to do on a job. I always enjoy asking them to take me through the process of how they are going to complete the job and it is like they have no idea where to start.
Imagine people handing over $300k to people with high school certificates and Cert IVs (if you are lucky).
Another day another "issue" out of the building industry. When does it all end.
Excerpt
"….managing director Ronnie Michel-Elhaj said “divine intervention” had helped him assemble a team he claimed would get those long-suffering customers into their homes."Isn't it wonderful.
I bet you he goes to confession on Sunday and walks out like he is on track to heaven.
gets in to his high yield investment company car, drives back to his 8 bedroom, 5.5 bathroom , water view house , and worries about how soon he can start the next building company.
I bet he will say that he made you one of the "divine intervention" (tax payers) for good karma and you need to thank him.
The Niche Living half built house in Dalkeith worth at least $1.8M each (if completed)
i bought a precast concrete business 6 years ago. I wake up everyday questioning "why"
The Construction industry is so hard
why DID you buy it then?
There are plenty of builders and building companies in my area doing well and a couple i know do it honestly. The ones that fail fail for a reason in 99% of cases its either pure greed or mismanagement trying to become a big company before the business is ready.
Why this particular builder is special and get "free out of jail card"
For the same reason that Ukraine is raking in the cash: they're smart enough to hand enough of it straight back to those sending it to them to make that grift work.
As a Western Australian taxpayer, I am very much against a bail out.
Let the company fold and the creditors pick over the carcass.
Your builder collapsing is a risk that you accept when you choose to build.