City of Cockburn residents who had signed up with Freelife Homes say they’re unable to get a new builder to resume construction of their houses, because the council is holding back new building permits.
The standard process for councils in the event of a builder’s collapse is the lodgement of two forms: a notice of cessation, which needs to be signed by the previous builder and effectively cancels the building permit; and another to issue a new permit.
However, administrators at Deloitte, which is liquidating the assets of Freelife’s parent company, Capital Works Constructions, have told clients they will not sign the notice of cessation forms because they are unable to verify the stage of construction or the quality of work when the builder went bust with 229 homes unfinished.
Several council areas where Freelife Homes was undertaking the majority of its work before its collapse in May, – Swan, Wanneroo and Rockingham – have been flexible with affected customers, allowing for new permits to be issued.
In the City of Wanneroo, the council usually charges $110 to change a building permit to a new builder, but it is understood the city has been providing the required paperwork to Freelife Homes customers free of charge.
City of Swan chief executive Mike Foley told Business News that its approach to the collapse had been to allow customers to submit a new application for a building permit, as they usually would for a new build.
In Rockingham, Mayor Barry Sammels said the council had also put in place a less bureaucratic process, while maintaining a good building record for future reference and ensuring completed works complied with building standards.
Mr Sammels said customers were required to submit a cover letter detailing why the application was being changed, a copy of the original plans, and to apply for a new building permit for a $95 fee.
The city would then issue an amended building permit, he said.
“This process is not detailed in the Building Act 2011, nor has there been any formal advice from the Building Commission regarding an alternative,” Mr Sammels said.
“Consequently, all permit authorities apply their own process, which can be very frustrating for the building industry and customers.”
That frustration is largely being felt by a number of Freelife Homes clients in the City of Cockburn, who spoke to Business News on condition of anonymity.
The clients said the council had been steadfast on the requirement for the notice of cessation, leaving them unable to contract a new builder to complete the unfinished works.
Review of building permits records show that, since January 2014, there were 17 building permits issued to Capital Works Constructions in the City of Cockburn.
City of Cockburn chief executive Stephen Cain said the city was committed to getting residents into their new homes, and would assist wherever possible.
However, Mr MCann said there was no legal basis by which any local government could waive the requirement for the notice of cessation form.
The other alternative to the notice of cessation forms is for a collapsed builder to be removed from the state’s list of registered builders by the Building Commission.
But the Building Commission will not remove Capital Works Constructions, the parent company of Freelife Homes, from the list, until investigations are complete.
Business News understands those investigations may take one to two months, at the soonest, to be completed.
