Home builder Podular goes into liquidation leaving customers fearing the worst

Wellington doctors Kathryn Percival and David Pirotta are losing hope they will be able to recover the more than $500,000 they paid for a Marlborough Sounds home that has not been completed. Photo / Mark Mitchell

Home builder Podular has gone into liquidation with customers claiming they are collectively owed more than $1 million.

Wellington doctors Kathryn Percival and David Pirotta alone believe they’ve likely lost more than half a million dollars.

They say Auckland-headquartered Podular Housing Systems Ltd had promised to build them a modular home in its factory before delivering it completed to their Marlborough Sounds property within months of the build plans being finalised in August last year.

Instead, they’ve paid more than $500,000 in progress payments on the house they now believe may never be built.

Other customers have also claimed they are owed hundreds of thousands of dollars for homes that are yet to be built.

Podular director Charles Innes and major shareholder Ilan Gross did not provide comment for this story.

Pirotta said his slim hopes of recovering his money had reduced even further with Podular’s liquidation.

“The liquidation to us suggests that we’ll be struggling to recover anything,” he said.

He said he’d instructed his lawyer to register a security interest so he can try to claim possession from Podular’s factory of any materials or work that had been done on his home.

However, he didn’t know whether his claim would be successful or not.

“Whatever happens we’ll be out of pocket, but I don’t know whether we’ll lose everything or will be able to recover some small amount,” Pirotta said.

Liquidators Gerry Rea Partners, meanwhile, announced Podular’s shareholders put the company into liquidation at 5.23pm last Friday.

“We intend to publish our liquidators’ initial report on Friday which will contain our estimation of the assets and liabilities and will include a list of known creditors,” Ben Francis, a senior insolvency manager with Gerry Rea Partners, said.

“Our priority has been to secure the premises of the company and the relevant assets.”

Francis said his team had already spoken to “several creditors and customers”.

His team also understood that a number of Podular’s unfinished home-build projects were “at various stages of completion”.

“We are working through these at present with the assistance of our legal advisors,” Francis said.

The liquidation announcement comes after six families spoke to the Herald earlier this month, describing being left in tears and feeling physically sick from the stress and “chaos” of dealing with delays by Podular and director Innes.

Wellington doctors Kathryn Percival and David Pirotta are speaking out about home building company Podular. Photo / Mark Mitchell

Collectively at risk of losing more than $900,000, they said they were speaking out to sound a warning about their experiences with Podular to other Kiwis.

They include a single mum who worries she could now spend years squeezed into a caravan with her 10-year-old son after she said she paid $265,000 in progress payments to Podular for a home that was supposed to be finished last Christmas but still hasn’t been delivered.

Another couple said they are at risk of losing $150,000 for a Raglan home that also hasn’t been built.

Three other couples, meanwhile, have received homes but said they’ve either had problems with the finished build or are still unable to use the houses because Podular hasn’t given them the paperwork needed to get final council approval.

One of these couples claimed Podular built their bach’s foundations too low - a blunder they said has taken away much of their ocean view and damaged the home’s resale value.

However, since the story’s publication on November 19, more customers have contacted the Herald claiming they have also paid hundreds of thousands of dollars for homes that are yet to be completed.

Major Podular shareholder Gross told the Herald earlier this month he was hoping to sell the company to overseas buyers, who could then take over the customers’ stalled house builds and finish them.

However, the customers said Gross had been telling them for weeks now investors were about to buy the company, yet they still hadn’t seen evidence for it.

Gross also sent an email to some customers in October – that the Herald has seen - in which he claimed the delays have been caused by “serious mismanagement”.

“I made a critical error in assuming that our (former) management team’s experience in the building industry meant they had the skill set required to steer a fast-growing building company,” Gross said in the email.

“Due to my mistake your project has been delayed and you have had to bear significant distress and frustration.”

One of Podular’s customers, who didn’t wish to be named, told the Herald she had been left feeling sick

“There are moments when I feel physically sick, absolutely physically sick and incredibly worried and stressed,” she said.

She ordered a bach from Podular for the Kaipara coast, north of Auckland, and said while it had eventually been delivered after many delays, the company had made a series of costly mistakes in its design, including building being too low so that her planned ocean view had been ruined

Trying to get Podular to build the home and then fix the problems had taken over periods of her life, she said.

“You can’t sleep, it disrupts and occupies too much of your waking hours,” she said.