A simple renovation turned into a nightmare for one family after it went horribly wrong, leaving the house in need of complete demolition and costing over $340,000 to fix.
Alexandra Forwood, 36, bought a former housing commission house for his family in March last year in the suburb of Airds, south-west Sydney, for $550,000, planning to extend the master bedroom and add an additional bathroom.
Two months later, the mother-of-two signed a contract agreeing to pay $128,000 to a licensed builder called Adel Keir of the Building Renovation Center to complete the work.
But what she is left with is a house that contains 28 flaws, according to an independent construction report, which recommended that she better tear down the entire structure and start from scratch.
Forwood was then horrified to discover that Keir had owned several bankrupt businesses with 39 insurance claims written against them for faulty work.
Keir denies being involved in a phoenix operation, which is when a business collapses and then avoids debt when it restarts under a different name.
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Phoenix activities directly cost the economy between $2.85 billion and $5.13 billion per year, according to a report commissioned by the Australian Taxation Office in 2018.
Despite this, an independent analytical economist John Adams published on the financial regulator on October 6 found that less than 1% of financial misconduct reports are investigated.
Partly in response, a few weeks later, on October 27, the senate passed a motion to hold a parliamentary inquiry into the regulatorthe Australian Securities and Investments Commission (ASIC), to get to the bottom of it.
News.com.au calls out affected Australians submit a brief to the investigation to share their horror stories about their dealings with ASIC.
The Aussies have three months until bids close, until February 3 next year.
ASIC did not act in this particular case.
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One of the many flaws in Forwood’s home identified in the independent construction report involved stairs of “variable widths” which Forwood said caused him to trip and aggravate a pre-existing spinal cord injury.
“It was night time, the lights were on, I was trying to go down the stairs and I slipped (because) one staircase is higher than the other,” Forwood told news.com.au. “I ended up in the hospital”
Forwood was also outraged to learn that in March, just when she allegedly exacerbated her pre-existing spinal injury from the fall, Keir’s building permit was being reviewed and NSW Fair Trading released her. renewed.
ASIC documents obtained by news.com.au reveal that Keir, 66, ran Galaxy Construction and Development Group, which went into liquidation in 2012.
The NSW Public Register shows Galaxy Construction had 21 claims against the compensation fund – insurance payments – made from September 2011 to June 2017, long after the company was liquidated. ‘company.
These compensation payments ranged from $5,000 to $199,000, with aggregate claims worth $1.06 million.
The company collapsed owing $640,000 to creditors, according to the liquidator’s report obtained by news.com.au.
Appointed liquidator Roderick Sutherland, of insolvency firm Jirsch Sutherland, filed a report with ASIC in which he said there were “possible voidable transactions” six months before his appointment.
A voidable transaction is when assets are transferred out of an insolvent company, making it difficult for creditors to recover their money after liquidation. However, ASIC ordered Sutherland to close the case.
“We note that although we have received clearance from ASIC to finalize this matter, we are in the process of investigating possible voidable transactions made by the company in the six months prior to our appointment,” Sutherland wrote. .
With only $5,000 in assets, Sutherland concluded he could not fund further investigations.
In 2014, another company run by Keir, Sydney Homes, was ordered by the court to go into liquidation.
This time around there have been 18 insurance claims against the company along with a $2,000 fine for breaching the Home Building Act and also an order from the NSW Civil and Administrative Tribunal (NCAT) to reimburse $45,000 to an aggrieved owner.
The 18 compensation claims from 2015 to April 2021 ranged from $10,000 to $209,000 and totaled $1.27 million, according to the NSW Public Register.
Between these two bankrupt construction companies run by Keir, there were 39 insurance claims that totaled $2.33 million in costs to cover faulty construction.
Since March this year, Keir has registered another construction company in Southport, Queensland, called Aroma Developments.
He also runs another NSW-based construction company that has been operating since 2016 called NSW Building Renovations Group.
Keir has denied phoenixing his ventures, although he admitted to setting up his new venture, Aroma Developments, to escape poor reviews, including from Forwood.
He also told news.com.au that his two previous companies, Sydney Homes and Galaxy Construction and Development Group, had collapsed due to “mismanagement”.
However, faced with unemployment and no other skills, Keir said he had to start a new construction business to put food on the table.
The 66-year-old builder denied the Forwood home had 28 flaws.
“It’s just a little flawed. They can be fixed,” he told news.com.au.
Keir also denied that any of the issues could have caused Forwood to get injured.
“I didn’t do anything,” he added.
The construction of Forwood’s house was plagued with problems from the start.
She paid 15% of the cost of the renovation to Keir in May. But from June to September, he received payments amounting to more than $100,000, at his request, when no work had been done on the property.
In some cases, he requested money and some payments were deposited directly into his personal account, according to Forwood’s NCAT affidavit.
Worried, she contacted her insurer and found she had been awarded a contract on behalf of another construction company, NSW Building Renovations Group, another construction company he ran.
However, the iCare certificate was for Building Renovation Center, where he acted as a company licensing supervisor.
iCare also received the wrong contract with the wrong contract price and the wrong name and contact information.
Construction of Forwood’s supposed dream home was completed in October last year.
She paid $18,000 for an independent report on her new home, prepared by Sedgwick Building Consultancy Division, just two months after the renovations were completed.
Sedgwick found there were five areas of non-compliance and 28 major and minor defects, including incorrect plumbing, incomplete flooring, incomplete kitchen and leaky roof. The report also revealed inadequate ventilation systems and gaps between the wall and the cladding.
The construction report also determined that “the extension must be demolished and rebuilt”.
A certificate of occupancy has not been issued as the house is deemed uninhabitable.
The rear utility room steps were thought to be a minor fault, but that’s what Ms Forwood claims caused her injury a few months later.
In March this year, the mother-of-two fell down these stairs and was taken to hospital.
Medical records shared with news.com.au say the fall ‘exacerbated’ his pre-existing degenerative spinal condition and the new injury caused ‘sharp pain’ in his upper and lower back.
Furious, Forwood began legal action against Keir.
She took him to NCAT to seek payment for the alleged defects and compensation for his ongoing medical bills.
The woman also raised the case with NSW Fair Trading for action over Keir’s planning permission.
NSW Fair Trading escalated the matter, resulting in the Building Renovation Center being delisted in July this year and triggering its iCare insurance payment under the Home Builders’ Compensation Fund.
However, since the company had been debarred, there was no way to pursue the NCAT case.
Although she received the maximum insurance payment of $340,000, it is not enough to rebuild her house and pay medical bills.
“They gave me this money to make me leave. We are stuck now, it is better to tear down the house and rebuild. We don’t have enough money to do this,” she said.
Forwood called for an act of grace, which is when a minister decides a payment is “appropriate due to special circumstances”.
NSW Customer Service Minister Victor Dominello is currently considering his candidacy. She is hoping for another $200,000.
At the end of September, Keir’s planning permission was suspended after Forwood’s case reached the office of NSW Fair Trading Commissioner Natasha Mann.
“I am pleased to inform you that the decision regarding Keir and the recommended disciplinary action against him as a result of our investigation has been made,” the notice read.
Keir is now banned for five years from holding a building permit or being a company director. News.com.au understands he is considering appealing the decision.
At a parliamentary committee in August, Mann said she was “quite horrified” to hear about the faulty house in Forwood.
Abigail Boyd, a Greens member of the NSW Legislative Council, questioned why Keir initially renewed his planning permission, despite his long experience of failing businesses.
“But how did it happen in the first place?” Boyd asked. “Is there a communication breakdown? This is a very serious case that has resulted in serious harm. This is something he (Keir) was fined for.
“His company was deregistered… and yet he was able to renew his individual building permit. How is it? Is there a systemic problem here? Boyd asked the parliamentary committee.
In response, Mann said, “Her application, ironically, came the same day I first met her, so she was processed, I guess, because those inquiries were ongoing.”
She said their online systems weren’t always updated instantly and could take a few days to process, so it went unreported until Forwood brought the matter to her attention.
In conversation with news.com.au, Boyd said: “There are significant systematic issues…ASIC is not a watchdog of consumers, it is a watchdog of markets .”
His office has been pushing for new legislation that would see a builder automatically lose their license if their company’s license is suspended or revoked, which was not in place before.