- In short: Tasmanian company Multi-Res Builders was placed in liquidation on Sunday
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What's next?: The liquidator says it will know in the next few days how many businesses, home owners and creditors are affected
Liquidators are investigating how many contractors have been left unpaid and homes left unfinished after the collapse of a Tasmanian building company.
Contractors claim they are tens of thousands of dollars out of pocket after Multi-Res was placed into liquidation on Sunday.
It has left behind unfinished builds in the Hobart suburbs of Risdon Vale and Bridgewater.
Liquidator David Levi told the ABC he was still investigating how many home owners, creditors and contractors have been impacted by the company's collapse.
Electrical contractor Kyle Skipworth told the ABC he started doing work for Multi-Res last May.
He claimed he is owed $100,000, after the company failed to make a series of payments.
Mr Skipworth said he had avoided laying off any of his 11 employees, but said the debt had placed "massive pressure" on his business.
"It'll take us a few years to recover from this debt … as you can imagine, I'll be working for free for this year just to sustain the business," he said.
"We've had to take out a small business loan to float the debt we're owed, with the intention that Multi-Res, in good faith, would pay the debt down and we'd be able to pay the loan off.
"As it sits now, we're left with it and we're going to pay off this $100,000 loan with whatever means we can."
Multi-Res declined to comment.
Limcora Plumbing and Drainage managing director Alex Nelson also claimed his company was owed more than $110,000 by Multi-Res, for six weeks of work.
"Multi-Res were communicating with us that they were having some payment issues, but then the communication just kind of started getting less frequent and we were starting to lose confidence every day," he said.
"We then entered into a payment plan with Multi-Res, where we had an agreed amount they would be paying us weekly … they only paid us one week."
Mr Nelson said he still held out hope his business would receive the money it was owed, but this week's news that Multi-Res had been placed into liquidation came as a hammer blow.
"It's a big chunk for any company to try to absorb after the last 18 months of COVID, rain, floods. It's really tough for us to swallow," he said.
"It's really unfortunate when these types of cases go to liquidators and administrators. I often think they're the only ones that win … I really think we'll be lucky to see 20 cents in the dollar."
Mr Skipworth said he was even less optimistic.
"From what I've been told, I'll be lucky if I get five cents in the dollar."
Half-completed builds 'unprofitable' to complete
Liquidator David Levi said investigation had "immediately commenced to obtain an understanding of the business and affairs of the company including consideration of the future in relation to incomplete houses, the situation on employees, contractors and creditors."
Mr Levi said he had told owners of half-built homes that they were "regrettably unprofitable contracts for the company to complete".
He said he had torn up the agreements, and the control of the building sites had been returned to the owners.
"I visited many of the sites yesterday and have also conducted an assessment of them before taking the above action," he said.
The state government has promised to reinstate a home insurance scheme, which provides protection to home-owners if their builder dies, disappears of becomes insolvent.
Those laws have not yet been introduced in state parliament, but a spokesperson for the Department of Justice said a financial assistance package, intended to provide similar coverage to the new model, would be provided to affected customers.
Material costs 'surge' leading to insolvency spike
New insolvency figures show 2,500 home builders have collapsed in the past two years, with two thirds of those in the past 10 months.
Master Builders Tasmania chief executive Matthew Pollock said a surge in material costs over recent years had created significant pressures in the industry.
"It's been an inflationary canary in the coal mine over the last couple of years, and we've seen material price increases of upwards of 20 to 30 per cent year-on-year," he said.
Mr Pollock said this was particularly problematic for businesses that had signed fixed-price contracts beforehand and were then left with cashflow issues.
"And that's really what we've seen that's been the major determining factor of those businesses that have unfortunately gone under," he said.
He said Multi-Res Builders was not a member of his organisation.
