Home building firm takes money for foundations not poured
Wednesday, 11 December 2024
Customers of struggling house building company JNJ Homes claim it took payment for the laying of their foundations, but didn’t do the work, leaving them $100,000 or more out of pocket and with only bare sections to show for it. TONY WALL investigates.
It was supposed to be Bev Gill and partner Dave Richards’ dream retirement home - instead they’ve spent $100,000 and the foundation hasn’t even been laid.
Christchurch resident Gill says she cried for two days when she realised that the house building company they’d signed up with - JNJ Homes - had ceased operations soon after they paid it $38,000 for the foundation pour.
That was on top of an initial $60,000 construction deposit paid earlier in the year.
Stuff revealed on Saturday how JNJ Homes clients and tradies owed tens of thousands of dollars were demanding answers from the company, which appears to have deserted its Wigram warehouse and offices.
Gill says she and Richards - both in their 70s - are devastated by the situation they’ve been left in, and the actions of JNJ Homes in the weeks before it stopped operating.
JNJ was chasing them for the full payment in advance of doing the foundation, she says, and must have known at that point it was in serious financial trouble.
They’d paid a $60,000 construction deposit back in late June, Gill says, but there were months of delays that the company blamed on issues with council consents for the Halswell property in a new subdivision.
Then on Wednesday, November 20, they received an email from JNJ asking for payment of $38,000 by the end of that week “to avoid any delays” with the foundation work, which the company said it was about to begin.
Gill had previously taken a photo showing boxing laid in preparation for the concrete.
She paid the money, but couldn’t believe it when she visited the site the day after the supposed pour.
“We went around to see this foundation [laid] down, finally, and when we got there, the section was just cleared, the boxing was gone, everything was just gone.”
The news only got worse.
She received a text message from a JNJ Homes salesperson saying he’d received a redundancy letter and been notified by the managing director, Jackie Huo, that he was considering putting the company into liquidation.
“I tore down to their office, only to find it all locked up,” Gill says.
The former salesperson suggested they might be covered by the New Zealand Certified Builders’ 10-year “Halo” guarantee.
But an online legal article says the Halo guarantee only applies after the completion of a build and would not be helpful if the builder goes into liquidation or stops operating.
Gill and Richards received more bad news on Tuesday - the excavation firm that did preparation work on their section is threatening to dig it all up if they don’t pay $11,000 it claims JNJ owes it.
Gill says they’ve had no communication from JNJ Homes and the whole experience has been “terrible, we’ve been quite devastated”.
Stuff put questions to Huo about Gill’s claims, and also questions about any building guarantees, but received no reply.
Another couple, Pratima Singh and Prakash Subedi, have found themselves in a similar position.
They signed a contract with JNJ Homes for a three bedroom home in Casebrook in February, paying a $50,000 construction deposit in July.
They also paid more than $10,000 for upgrades that JNJ wanted in advance, Singh says.
The project was beset with delays, she says, but finally in November the company said it was about to start foundation work.
Their contract, seen by Stuff, stipulated that payment for foundation work was to be made upon 90% completion of the work, but emails show JNJ asking for the money in advance “so your bank will have plenty of time to process”.
The couple was out of the country at the time - holidaying in their native Nepal, which they say JNJ knew - and agreed to pay the $80,000 it was requesting.
Singh explains that the emails gave them the impression the work had started and as first-home buyers, they were naive and trusted JNJ with the process.
“Now I feel as if they set us up.”
The company promised the work would be done by November 28, but Singh and Subedi were in for a surprise when they arrived back in the country on December 4.
“We landed in the evening and right away we went to the section to see what’s done - we were totally shocked because nothing was really done, they had just done some digging and they said backfill had been done, but there was no foundation.”
They emailed JNJ Homes, and received an email from Huo that said: “I am sorry to inform you that JNJ will be closing the door and I recommend to call the certified builder to have another builder to continue your build.
“This is a very sudden for us and it is totally unexpected (sic).”
Huo also asked for their bank account number, “as we will be refunding you a part portion of the foundation”.
That hasn’t happened, Singh says.
Huo emphasised in another email he was “shocked” by the company’s closure and it was “very unexpected”.
When Subedi sent an email saying “if JNJ was at the verge of closing down, why did you send us invoice for the foundation work that had not even started”, he got no reply.
Singh, who is a clinical manager at a care facility, says it was supposed to be their dream home.
They have spent almost $150,000 on construction-related costs, with nothing to show for it, she says, although they own the section.
“150,000 is no joke. We’re paying a mortgage for a thing that’s not even done, it’s very unfair.”
Singh called police to lay a complaint, but says she was told to contact a lawyer.
“We don’t have much support in the country, we don’t know where to go.”
Meanwhile, Stuff has learned that suppliers who claim they haven't been paid have been going into unfinished JNJ homes and taking items.
Campbell Turnbull says he called police at the weekend as someone had jemmied a window to get in, damaging the frame.
“They took all our appliances - oven, cooktop, dishwasher, bathroom stuff.”
Turnbull claims two suppliers admitted they had taken the items, but denied the break-in.
He says it appeared whoever broke in had done repairs to try to cover their tracks.
Turnbull says his house is almost finished, but he will lose thousands of dollars.
He and his partner, who is pregnant, are living in a house with nine people instead of their first home, he says.