Eli Thomas and Sophie Annen with daughter Charlie-Rose fear they've lost about $350,000 paid to home builder Podular. Photo / Dave Lintott
Eli Thomas and Sophie Annen with daughter Charlie-Rose fear they've lost about $350,000 paid to home builder Podular. Photo / Dave Lintott
Up to 60 home buyers are at risk of losing cash and life savings in the $5.2 million collapse of an Auckland-based home builder, a company insider claims.
That includes 21 customers who collectively paid an estimated $2m in deposits for new homes that were never started, the person claimed.
It comes after Podular Housing Systems Ltd went into liquidation on November 25, with the liquidator’s first report finding the company owes an estimated $5.2m to 217 creditors.
The liquidator also noted that an estimated $2m in deposit payments had been taken from customers and said it is not certain where these payments had gone.
Podular director Charles Innes did not provide comment for this story but has previously said “sorry” to customers.
Now a Podular staff member with knowledge of the company’s finances has claimed to the Herald most of the 21 deposit payments had already been spent to cover other expenses at the company.
These 21 customers signed up for about $12m worth of new homes that were supposed to have been built in Podular’s factories and then delivered across the country from Whangārei, Auckland and Hamilton to Wellington and Christchurch, the insider claimed.
“Small amounts would’ve been spent on these projects, but most of it would’ve been spent for general expenditures,” the insider said.
Podular’s collapse is one of the largest failures in the modular home sector, an industry that is seen by some as key in helping ease the nation’s housing crisis by building more homes faster.
Wellington doctors Kathryn Percival and David Pirotta stand to lose more than $500,000 if their Marlborough Sounds modular home isn't built. Photo / Mark Mitchell
The company offered to build fast, kitset homes - that could also be customisable - in its factories and then deliver them to customers’ properties.
The homes could range from small, backyard one-bedroom units for extra family members or renters to larger homes and coastal bachs.
Who are the up to 60 home buyers
In addition to the 21 customers who paid deposits, about another 22 customers have homes that are considered “works in progress”, while up to 18 others have had homes delivered to their properties that are not yet finished, the Podular staff member claimed.
The “work in progress” homes are houses that are not finished but which are supposed to have had work started on them in Podular’s factories. They are also homes that customers have made either deposit or progress payments for.
A number of these customers have told the Herald they paid hundreds of thousands for such homes that they now fear they may never receive.
That includes Wellington doctors Kathryn Percival and David Pirotta, who said they paid more than $500,000 in progress payments for a home that was supposed to be delivered to their Malborough Sounds property in the South Island but has never been delivered.
Young parents Eli and Sophie Thomas said they also paid $350,000 for a house in Martinborough, 80km north of Wellington, that has not been delivered.
They’re now facing financial ruin and stuck living in a trailer home with their 6-month old baby.
Another single mum to a 10-year-old boy is also stuck in a trailer home after she said she spent $235,000 for a home not yet delivered.
Then there are up to 18 other customers, who have had homes delivered to their properties but who still have issues or outstanding services, the Podular staff member said.
These homes either still need remedial work to fix issues or have not received the paperwork needed to gain final council approval, the insider claimed.
Eli Thomas says he could be left financially ruined from Podular's collapse. Photo / Dave Lintott
Eli Thomas and Sophie Annen, pictured with daughter Charlie-Rose, are living rough in a trailer due to their home not being built. Photo / Dave Lintott
Lower Hutt customer Jonathon Batchelor is one of these customers, telling the Herald he suffered debilitating stress and was forced to leave his job after a two-year battle with Podular to get his small unit built.
Another woman said she’d been left feeling physically sick with stress after she claimed Podular built her Kaipara Coast bach, north of Auckland, too low, ruining its sea view.
“There are moments when I feel physically sick, absolutely physically sick and incredibly worried and stressed.”
‘Terribly sorry’
Podular director Innes did not answer questions sent by the Herald.
But he has earlier told media outlet Stuff he was “terribly sorry” to Podular’s customers.
“I guess I’ve got them in this situation and I’m responsible for it and I need to do what I can, to help them through it. That’s what it boils down to ... I’m terribly sorry,” he said.
‘Plans to investigate’
Gerry Rea Partners - the liquidators called in to try to find money to repay customers and businesses owed cash by Podular – said they now plan to investigate the company’s management.
“The liquidators have concerns regarding the conduct of the management of the company and will conduct an investigation into the failure of the company,” Ben Francis, senior insolvency manager with Gerry Rea Partners, said.
Liquidators have identified more than 100 creditors claiming Podular owes them money, including district councils, the Inland Revenue Department and contractors.
At least one customer said they have registered a complaint with the Serious Fraud Office against Innes.
A different former employee of Podular, who didn’t wish to be named, claimed they had spoken with the SFO.
However, the SFO is yet to confirm this.
“The SFO does not generally confirm or deny information about complaints or investigations, including whether it has received a complaint about a person or organisation or whether an investigation is underway,” a spokeswoman said.
The Ministry of Business, Innovation and Employment’s integrity and enforcement team said it was reviewing information about the company and its management.
The Commerce Commission said it had received four inquiries about Podular.
