Auckland retirees sue over master builder's home guarantee

While Tony and Sue Norringtons' build was originally meant to be finished last September, it was dogged with delays. Picture /123rf

An Auckland couple are suing an arm of the Registered Master Builders Association over the guarantee for work done by their now bust builder.

Retirees Tony and Sue Norrington have launched action in the Auckland District Court against Master Build Services (MBS), which offers guarantees on the construction work of registered master builders.

The organisation is the largest provider of building guarantees in New Zealand and has underwritten almost 100,000 homes in the past two decades.

The Norringtons received a 10-year premium guarantee after they signed up the now-failed Shore Homes to build a $1 million house in Mission Bay.

That guarantee provides cover for the loss of a deposit or the non-completion of a project, as well as any defects with the work or materials.

While the Norringtons' build was originally meant to be finished last September, it was dogged by delays and only the foundations were in when the couple moved to cancel their contract with Shore Homes.

The company, which had more than 10 builds on the go, was put into liquidation by its shareholders in December.

Liquidators from Waterstone Insolvency estimate in their first report that the company owes creditors more than $2.5m.

The liquidators have recovered a small amount, including $25,000 the Norringtons paid for invoices they received after the Shore Homes contract was cancelled.

Although the Norringtons have a new builder to finish the project, they are in a dispute with Master Build Services over the guarantee for work done by Shore Homes.

An email from a MBS manager late last year - seen by the Weekend Herald - says the Norringtons had reached a full and final settlement with Shores Homes' liquidators in respect of their contract.

Because of this, MBS could not consider a claim for the loss of deposit or non-completion of work, the manager said.

But Tony Norrington said he and his wife had received permission from MBS to cancel the Shore Homes contract and had followed the correct process to do so.

They now have no guarantee on the work done by their new builder because there was no point in getting one if the foundations weren't covered, he said.

The couple are seeking a little over $100,000 from MBS in their court claim over the Shore Homes guarantee.

Norrington believed they had been treated "atrociously".

"I still can't believe how bad it's been. I can't believe where we are at the moment could happen with a commercial organisation".

Registered Master Builders Association chief executive David Kelly was aware of the Norringtons' claim but said he could not comment as the matter was before the courts.

He had previously told the Weekend Herald that MBS had paid out on other claims from Shore Homes' clients or arranged for another builder to finish their homes.