Auckland developer and buyer in stoush over claims home left incomplete

Thursday, 7 April 2022

Stuff visited the property on April 1, because the homeowner and builder provided different photos of the property to support their claims.

A new house built in Glenbrook, Auckland, has left one man’s home dreams shattered and a local building company defending its position in a contractual stoush a litigation specialist says others should learn from.

Mechanic Sunil Nadan, 48, claims a property he purchased off the plans was delivered behind schedule with construction materials abandoned at the site.

He has not received the Master Build guarantee he was promised in the contract he signed with property developer Eco-Smart Homes, which would have protected him from non-completion.

But Eco-Smart Homes director Ritesh Mani claims the home has been completed to the “exact specification”, and delays were caused by Nadan requesting changes.

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Sunil Nadan signed a contract with Eco-Smart Homes to build him a home, but says it was delivered two years behind schedule. He supplied this photo to support his claim. It’s unclear when it was taken.

Nadan is a diesel mechanic who immigrated to Aotearoa from India in 2003. He is blind in one eye after a workplace incident in 2000.

He signed a contract with Eco-Smart Homes in 2018 to build a home for him in Glenbrook, near Waiuku.

The contract Nadan signed offered a 10-year Master Build guarantee and he was told the build would take six to eight months to be completed.

But Nadan was not able to move in until August 2021, and he never received the Master Build guarantee.

Photos seen by Stuff provided by Nadan in February show construction litter and wood abandoned at the site. But it’s unclear when the photos were taken.

“It’s been distressing,” Nadan said. “I was paying my mortgage at the same time I was paying rent, and I was not inside the house.

“I feel like I’ve been ripped off and taken advantage of. They’re mucking me around. The drainage is not properly done, you can see concrete slabs, and there’s still tape on the windows.”

Eco-Smart Homes director Ritesh Mani says delays were caused by Nadan requesting changes to the build.

Stuff has seen the schedule of material and works between Eco-Smart Homes and Nadan which states “the builder will arrange a ten-year Master Build guarantee to the owner upon settlement of the purchase of the land”.

A Master Build 10-year guarantee protects a homeowner when renovating or building a home. It covers them from loss of deposit and non-completion, materials and workmanship, and structural defects for 10 years and starts at the time they sign the contract.

Master Builders chief executive David Kelly confirmed that Eco-Smart homes was not a member of the association but is a developer that uses various Master Builders to undertake builds.

“Eco-Smart typically purchase a guarantee through the Master Builder which will be transferred to the eventual property owner at a certain point in time,” he said.

'Unfortunately, in this instance we can confirm we have never received an application for a guarantee for this property from the builder, who is no longer a member of Master Builders.'

Mani said Eco-Smart Homes follows a very robust process as a development company.

“In this particular instance and unbeknown to us, the registered Master Builder resigned from the association and did not notify us. Unfortunately, this impacted on this client,” he said.

A property developer and a buyer are at odds over this Auckland property. Russell McVeagh construction litigation specialist Michael Taylor said some lessons can be learned from the situation.

'We stopped using this particular builder after this build.'

Mani said Eco-Smart Homes offered Nadan an alternative but equivalent building warranty from a nationally recognised insurer, at its cost. Nadan claims Mani is charging him for the alternative cover.

Mani said the house was delayed because Nadan wanted further work done.

“A significant cause of the delay on this property was due to the fact that Nadan wanted to extend the house while it was under construction,” he said.

Nadan claims he asked for the extension only because Eco-Smart Homes misled him on the size of the property he was buying.

He said a salesman took him to another Eco-Smart Homes property before he made the purchase, and advised him that this was the type of house he was buying. But while the house was being built he noticed it was significantly smaller.

Mani said Nadan inspected a show home that was to give him a “look and feel and show the quality of the workmanship”.

“There is also a clause that permits the builder to make such changes to the building works to that provided for in the plans and specifications as is necessary to meet the requirements of any local, territorial or common authority,” he said.

'In the circumstances, the property built was the maximum footprint that could be built on the section.'

Nadan said the time taken to complete the property was still unacceptable, and that it was delivered to him in an incomplete state.

Ritesh Mani claims this is what Sunil Nadan's home looked like when he moved in, in August 2021. Photos provided by Nadan paint a different picture.

Mani denies the home was incomplete, and said the build has been completed to the exact specification.

“We have been in written correspondence with the client wanting to finalise the last remaining remedial issues,” he said.

'I understand the client has been completing some of their own additional works on the property.'

Nadan denies that he is conducting additional work on the property.

Mani said the tape is a cosmetic issue that can easily be moved and denies there are drainage issues.

“The client wasn’t happy with the grate on the drain on the driveway. So he requested the builder change it, which we did. Now the client wants it changed back,” he said.

Mani has provided Stuff with an image of the home that he says was taken in August 2021 when Nadan moved into the property.

Eco-Smart Homes Auckland Limited was a property development company based in Parnell, central Auckland. It was founded by Alistair Campbell Austin, who served as its director from July 2017 to January 2020. Mani was initially a salesman and took over as director when Austin left.

The company underwent a name change in July 2021 and is now called Ectch Limited. In April 2021, Mani registered a new company called Eco-Smart Homes Northwest Limited that is located at the same address.

Mani was also a salesman, and his family owned a 90 per cent share, in the failed development company Tribeca Homes. It went into liquidation in 2015, after conceding it could not honour multiple home building contracts.

In a liquidators’ final report on Tribeca Homes, there were 86 claims from unsecured creditors totalling $2,924,547, and one claim from an employee for outstanding wages of $9336. Inland Revenue’s claim totalled $2,454,253 which was mostly related to outstanding GST.

Claims were also filed against Ritesh Mani, Enterprise Australasia Limited, and the Maha-Laxma Family Trust, which is referred to as Mani Parties in the report. Enterprise Australasia Limited is the Mani-owned company that held the 90 per cent share in Tribeca Homes.

Proceedings were filed in court against Mani Parties and a settlement of $110,930 was agreed upon. Initial payments were received, but defaults were made on subsequent payments. An out-of-court settlement was reached and total recoveries from Mani Parties amounted to $133,032.

Claims were also established against Tribeca Homes director Mark Richards. A settlement was reached for $280,000 and this was paid over a six-month period ending on December 20, 2018.

Mani said he doesn't believe the history of a former employer of his has any relevance to Nadan’s build.

“This client’s house is complete. He has obtained his Code of Compliance Certificate and is living in a great house,” he said.

“We develop a great product. We have a great team and are well funded with very reputable builders building for us.”

Nadan said the ordeal has taken a toll on his health.

“It was my dream to buy a house when I immigrated here. It’s just been a real hassle, sometimes I can’t sleep, there’s a lot of tension.”

Russell McVeagh construction litigation specialist Michael Taylor said there were some lessons to be learned from this situation.

“A promise to provide someone with a Master Build guarantee isn't the same as actually having that Master Build guarantee. You don't have the Master Build guarantee until Master Builders confirm that they have provided you with the guarantee,” he said.

“An obvious one, with a substantial investment like this, is to get a lawyer to have a look through the contract. The most obvious way to pursue a remedy for this gentleman is to go after the developer under that sale and purchase agreement.”

Taylor said, often in these cases the purchaser has a right to do a pre-purchase inspection of the property before they commit to paying for it.

“I don't know if that right was exercised here, but as a general lesson it's obviously an important step to avoid this from happening.”