Master Builders pays up to help Aucklander finish his home build

Monday, 15 March 2021

Master Builders has agreed to pay Mark Gumbrell for the extra costs he faced to finish his Auckland home after his builder went bust.

Building work on Gumbrell’s home stopped when his builder Sika was put into liquidation in June, but Gumbrell initially didn’t worry as he had paid the builder for a Master Builders’ guarantee, which would pay the extra costs to complete a build.

But Gumbrell found Sika had not applied for a guarantee, and he was left facing losses he believed to be around $200,000 for work he had paid for, but was not completed.

Gumbrell asked Master Builders to honour the guarantee he had paid Sika for, and after his story featured in Stuff, Master Builders agreed to do so.

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“They have come to the party,” said Gumbrell, who was prevented from saying how much the settlement was for. “I’m very happy.”

Gumbrell had feared he would have to sell the house in Wai O Taiki Bay in Auckland’s eastern suburbs once it was completed to recoup his losses.

From Sika Home's proposal for Mark Gumbrell's home-build project.

He went public after he believed Master Builders had declined his claim.

Master Builders denied it had turned him down and promised to contact him to re-start the claims process.

Master Builders confirmed it had now agreed a settlement with Gumbrell.

“The original builder, Sika Homes which went into liquidation, had not completed the paperwork for the Master Build Guarantee even though Mr Gumbrell had requested and paid for the Guarantee in good faith,” said its chief executive David Kelly.

“In these circumstances Master Builders will honour the terms of the guarantee,” Kelly said.

“We believe it is the right thing to do and that it is important for the construction sector that people can rely on us.”

But, Kelly said: “We do want to stress to all homeowners that they must read their contracts carefully. These are legal documents with requirements to be met by both sides. We have worked hard to ensure our contracts are in plain English, and that the homeowner can understand their obligations.”

The contract used by its member builders warned homeowners to check the guarantee they had paid for had actually been applied for.

“A key requirement is that homeowners contact Master Builders if they have not heard from us within 14 days of requesting their guarantee,” Kelly said.

Sika Homes was put into liquidation on June 18.

Liquidators Steven Khov and Kieran Jones said they had been advised Sika Homes' failed because excessive labour costs and other project cost overruns eroded profit and margins resulting in an unsustainable business model.

Gumbrell has been in contact with his local National Party MP Simon O’Connor in a bid to get MPs to revisit the idea of requiring guarantees in law on every new build as a means of protecting the public.