Receivership events 'nightmare'

Grant Florence says the receiverships could dent confidence in the building industry. Photo / Christine Cornege

A construction sector subcontractor has expressed sympathy for Christchurch people who first suffered earthquake damage, then had their homes written-off and were now caught up in the receivership of the Stonewood businesses.

Chris Hughes of building, painting and electrical business Switchedon Property Maintenance, said he was concerned about people caught up in the series of events.

"It would be a bloody nightmare. Christchurch people have been through enough stress, without further problems like this," Hughes said after KordaMentha's Grant Graham and Neale Jackson were yesterday appointed receivers of Stonewood Homes New Zealand, Stonewood Homes and Sterling Homes.

"The appointment was requested by the companies' director," KordaMentha announced. "Stonewood Homes New Zealand Limited is the master franchisor for the Stonewood Homes network. Stonewood Homes Limited holds the Stonewood franchise for Christchurch. The receivers stress that the receiverships do not affect any of the other independently owned Stonewood franchises operating throughout New Zealand.

Graham said it was early days.

"Having just been appointed, we are working as quickly as possible to establish the companies' financial position and a path forward for the receiverships. We will communicate with all affected parties as we work through this process," Graham said.

Hughes said his business was owed about $15,000.

"We've done work with them for the last couple of years. We've worked on 50 to 100 houses. We've done a lot of warranty work, tidied up after other contractors. If the contractors didn't do the jobs right, we did everything from small repairs like doors not opening or shutting to a repaint.

"We didn't know about the receivership until articles came out that there were issues.

"We had issues being paid for the last six months and Stonewood were saying that some of it was in the queue to be paid. Any credit loss is disappointing. What we've lost only represents a small portion. We'll possibly lose $15,000 but there are other contractors out there that are owed a lot more than that, in the early hundreds of thousands of dollars," Hughes said.

Nothing will be known now until the first report was issued from KordaMentha, he said.

"There's been a lot of houses built in a very short space of time in Christchurch and it doesn't do good things for the industry either. You need to have quality systems in place and cash flow is key," Hughes said.

Grant Florence, chief executive of Certified Builders, expressed disappointment about the Stonewood receiverships.

"It potentially dents a bit more confidence in the building industry. I feel sympathy for homeowners who may be caught in the middle of it and I just hope subcontractors get looked after and get the money that's owed," Florence said.

David Kelly, Registered Master Builders Association chief executive, said Master Build Guarantees would mean places would be completed.