New-build delay pushes family to brink of financial ruin

Maggie Law’s 2-year old son peeps a smile out from under her arm.

His future seems secure as they sit comfortable in the lounge of their newly-built Bucklands Beach dream home in Auckland’s east – but Law isn’t smiling.

She said a dispute with their builder had delayed their home’s final inspection approval by close to a year and pushed them to the brink of financial ruin.

She subsequently took builder Jared Guojun Cha and his I Home Furture company to the Disputes Tribunal, winning a $30,000 payout.

But Cha put the company into voluntary liquidation, leaving Law feeling she has little hope of ever seeing the cash owed her.

Cha told the Herald on Sunday his company had no money to pay and that he had no regrets because he thought the Disputes Tribunal decision was unfair.

Law said she now wanted to warn others about Cha – who continued to run other building companies – as well as the risks of hiring unproven builders versus using reputable brands.

Law’s new home is just one of thousands mushrooming up across Auckland as developers rush to fill the city’s housing shortage and cash in on booming sale prices.

But while most were being built by professional developers, mums and dads were also increasingly dipping their toes into development projects.

Law and her partner Sheng Guo formed their idea to build a dream family home after buying a 1970s-built Bucklands Beach house on a 597sq m block in 2014.

Then – after meeting Cha at a party – they pushed ahead in 2019 with plans to hire his team to project manage and build a new home at the back of their property, allowing them to then rent or sell the existing house at the front.

Cha not only offered to build the new home for $420,000 – cheaper than most of the big name building brands – but Guo had also known him in the past.

Guo and Cha earlier studied English in Palmerston North together and hailed from the same hometown in China.

At first the house build went well, with the couple enjoying a great working relationship with Cha.

But towards the project’s end in early 2020, after most of the home had been built, issues arose with the concreting job on the driveway, Law alleged.

Cha contends some of Law’s concern over the driveway was not for him to deal with; including to concrete the driveway near the old house.

Driveways on new-build properties needed to be laid with permeable concrete so rain water could seep into the soil rather than flooding the street or neighbours’ properties, Law said.

She claimed Cha had no experience laying permeable concrete.

He then refused to fix his job or to concrete the rest of the shared driveway that ran from the new house to the old house, she said.

Cha subsequently downed tools over the dispute.

That had left the home’s final building inspection still incomplete almost one year later, while rubbish remained scattered through the yard and decking and a retaining wall also remained unfinished.

The delay had also left Law and Guo paying off two mortgages and unable to rent or sell the existing front home to recoup some of their costs.

The Disputes Tribunal would later side with Law, saying her evidence showed Cha had incorrectly laid the concrete and that he was also responsible for concreting the rest of the shared driveway.

Cha told the Herald on Sunday he respected the Disputes Tribunal, but thought the decision was unfair because he hadn’t had enough time to prepare his own evidence.

He also said it was not fair to expect him to concrete the driveway near the old house because he had been hired to build the new home.

“From our point of view, building a new house is building it inside the new property’s boundary, not outside the boundary,” he said.

He said he had spent $390,000 building the home, leaving little margin from his $420,000 payment.

“I don’t want to go for liquidation, but when you are suffering a customer this difficult, you have no choice,” he said.

She said Cha had set up I Home Furture solely to build her house.

He then seemingly structured it with no assets so that it acted like an empty company to accept payments from her and make payments to his sub-contractors, Law said.

That meant it seemingly held no assets and little cash that could be reclaimed in a dispute, Law said.

And while that was a common way to structure companies in the building industry, Law said she now wished she had written more protections into her contract.

That could have included a clause holding Cha personally liable for the project or one to withhold a greater share of the $420,000 payments until the house was completed, she said.

Law now believes these extra terms were needed with new builders.

“I think a well-known company would never liquidate because of $30,000, so you can trust they will finalise your payment, finalise your project and do whatever they can to ensure they keep a good brand name,” Law said.

Having already borrowed from friends and family in desperation, the couple now needed a further bank loan for the $30,000 Cha wouldn’t pay them so they could finish the driveway and gain their final building approval for the property.

“I’m just thankful that we’ve somehow survived this far because I think many people would have been left in ruins,” Law said.

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