Stricken Maxim home buyers rescued by Master Build guarantees

Tuesday, 23 November 2021

Homes by Maxim has gone bust, with a shortfall for creditors of $3.2 million.

Master Build guarantees have rescued the worried customers of a failed building company.

The Christchurch-based firm, trading as Homes by Maxim, was put into liquidation by its shareholders Logan and Maria Townsend last week with 14 homes incomplete and five contracts not started.

The liquidator’s report, released on Monday night, shows trade creditors are owed $3 million, with the shortfall to all creditors estimated to be $3.2m.

Staff are owed $50,000 in holiday pay and wages and Inland Revenue is owed $500,000 in GST and PAYE. Four office-based staff lost their jobs.

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Master Builders on Tuesday declined to say how many of the unfinished homes were covered by its guarantees, citing privacy reasons, but liquidator Brenton Hunt said the guarantees would ensure all unfinished projects were completed.

“Everything that was live at the liquidation has got Master Build insurance, which in my view is one of the better of those insurances,” he said.

Are you among those affected? Email martin.vanbeynen@stuff.co.nz

A couple of projects had been cancelled by the customers and the company had one project over which there was a major dispute, he said. That contract had been cancelled.

“I’m waiting for a lawyer to ring me about that.”

Homes by Maxim was a significant building company in Christchurch.

A Maxim customer, who asked not to named, said the company had promised lots but delivered a disappointment.

“Many I have talked to have [had] issues virtually from the time of sign up. Our ride so far has been one of mostly frustration.

“For a number of us I suspect the liquidation is almost a welcome step, in that we now can deal with Master Build to sort out the mess.

“We feel heartbroken for the contractors who have worked so hard on our property and done such an amazing job so far.

“It is awful knowing that despite us paying each invoice sent to us by Maxim Design immediately, many of the contractors have not been paid for their work.”

Another Maxim customer, building in Halswell, who also spoke on the condition of anonymity, said his and his wife’s dealings with the firm had initially been excellent.

“Their salesperson was just the best salesperson you could possibly imagine. Their architect was absolutely amazing. They absolutely did everything right. Twenty minutes after meetings we would have full typed out minutes of the meeting. Everything was just so good.”

He and his wife had been understanding about delays due to lockdowns and “the council took forever” to issue a simple building consent.

He then heard through the grapevine that Homes by Maxim was in financial trouble, but Logan Townsend told him not to worry.

“But by about a month ago nothing had happened on the build and no-one from the company was answering phone calls.”

The home buyer said he had gone to Maxim’s office at 8.30am last Tuesday to confront Townsend and was then told the company was going into liquidation at 10.30am.

“Lack of communication was probably the thing that was most disappointing. They obviously knew the ship was sinking…” he said.

The only thing done on their site was an excavation, which had been backfilled with sand, he said. The sand had been repossessed by the contractor.

“This will be a good test of whether the Master Build guarantee is worth the money you pay for it,” the home buyer said.

He and his wife were now inclined to sell their section, now worth twice what they paid, and get their cash out.

“We will probably just buy another house. We don’t want to have to go through the pain of doing this again, especially with current supply issues.”