Metro Homes owed $1.4m

More details have emerged about the causes behind the administration of Metro Homes WA (Hamlen Homes), which collapsed yesterday owing $1.4 million.

Business News revealed on Monday night that Cliff Rocke and Greg Prout from WA Insolvency Solutions (Jirsch Sutherland) had taken control of the business as administrators, following reports earlier in the day that Hamlen was in trouble.

Metro’s biggest creditor is the Australian Taxation Office, claiming $600,000, while about 30 parties are owed a further $800,000 between them, Mr Rocke said today.

At this stage, other companies in the Hamlen Group are continuing to trade under the control of directors.

The business had 17 builds under construction at the time of the appointment, including 11 homes for clients, and the business had seven staff including its two directors, according to the administrators.

The directors were Peter Hoang Nguyen and Perth-based Stephen Daniel Pelosi (Stephen Pelosi), according to documents from the Australian Securities and Investment Commission. 

It’s understood Metro was squeezed between rising material and labour costs, and fixed-price contracts, some of which were signed in early 2021.

Regulatory issues also hit the business, including homeowner insurance and title clearances, both of which affected the pipeline of work, it’s understood.

But the administrators' investigation is still at an early stage.

Hamlen Homes began as the Western Australian branch of Metro Property Development, according to an archival web page, but the company grew into an independent business.

Business News reported last month on two WA residential builders that collapsed owing more than $1 million each: Individual Developments and WA Housing Group.