How I lost $100,000 and why I will never use steel frames

Ashington Homes · May 23, 2023 10:57 am

Hi Everyone

This is the tale of probably the biggest mistake I have ever made financially and a warning to everyone about doing your research as to who is behind a company in the building industry before you hand over any money.

As background we switched to using steel frames during COVID due to a lack of timber. We used a company called GNL and whilst their frames were good but sometimes slow with their delivery, their installation process was incredibly slow.

We built 3 houses with GNL frames.

After this we decided to make the switch back to timber, however there was one contract we had signed with the world's nicest couple and we had agreed to use steel on their home. We asked if we could swap to timber but they had their hearts set on steel. So we needed to find a new company.

So I started googling and found a local company based in Lane Cove, they had a fantastic professional looking website, they were incredibly professional when I spoke to their sales staff. So in November 2022 they promised that if I handed over the 50% deposit that all of these framing companies require, they would have no problem delivering the frames by the 14th January 2023.

By the first week of March they were running 6 weeks late but they promised me that if we paid the remaining 50% they would have all frames delivered in 2 weeks.

Fast forward to today, we only have 12% of our frames onsite.

We struggle to get phone calls answered, emails returned etc. We have even been to the address listed on their website and they aren't there.

The ABN they are using doesn't belong to the company who we signed the contract with.

The scariest part is that we researched the directors of the company that does have the ABN and he has 676 NSW fair trading complaints against him and two criminal prosecutions with fines issued that he hasn't paid.

We even found warnings issued by NSW Fair Trading against doing business with him and a newsletter that had been circulated on the North Shore warning people against dealing with him.

They are trading under the name of Stratosphere Steel but the ABN is registered to a company called Raytech

At this stage NSW Fair trading wont help as it's a business to business issue so we are bringing in the lawyers.

The big lesson is that we will never hand over money again unless we know who we are dealing with.

In hindsight, there were so many red flags such as no one would ever give their surname, no one had a personal email and everytime we asked to come to the office to have a meeting they would make an excuse.

Here is a Daily Telegraph article about him:

https://www.dailytelegraph.com.au/news/ ... 663a134b1c

And another link to a forum when he was selling 4wd products:

http://www.myswag.org/index.php?topic=24396.0

It would seem that he is a serial businessman who doesn't deliver.

Anyway, that is how I lost $100,000

ponzutwo · May 23, 2023 11:12 am

ouch. So upfront due diligence seems to have been a little lax by the look of it given what you found after the fact. All the redflags you ignored too. I guess when you're busy its easy to overlook these things.

If you're short on time, get your lawyers to spend a couple hours doing the due diligence for you. Cant seeing it cost more than a grand. Worthwhile if you don't have the time and you're looking at a new vendor.

thanks for naming and shaming. will hit search results for others.

Where are the clients at in relation to this debacle. Are they aware of whats happened and why? Are they being reasonable with you? I can imagine to them, this feels like one of the stories they keep reading about in the paper and could be getting jumpy

Ashington Homes · May 23, 2023 11:41 am

ponzutwo

ouch. So upfront due diligence seems to have been a little lax by the look of it given what you found after the fact. All the redflags you ignored too. I guess when you're busy its easy to overlook these things.

If you're short on time, get your lawyers to spend a couple hours doing the due diligence for you. Cant seeing it cost more than a grand. Worthwhile if you don't have the time and you're looking at a new vendor.

thanks for naming and shaming. will hit search results for others.

Where are the clients at in relation to this debacle. Are they aware of whats happened and why? Are they being reasonable with you? I can imagine to them, this feels like one of the stories they keep reading about in the paper and could be getting jumpy

Some good points. Thanks

Yes my due diligence was awful in this case and worse I ignored all the red flags. They dont even have any published reviews online!

Normally I check reviews and try and inspect work before hiring new vendors. I don't know why I didn't in this case.

I like your idea of getting our lawyers to do some background checks in future. Great idea.

We are lucky that the clients are absolutely amazing people.

We have been totally honest with them every step of the way and it's an issue that we just have to work through together. I have had to hire GNL again to start from scratch and they are doing their best to fast track some new frames for us, and then when we get those frames we will have to be all hands on deck to fast track the remainder of the build for them.

Anyhow, learn from my stupidity

I am letting the lawyers loose on them to see if we can recover anything

ponzutwo · May 23, 2023 11:50 am

Ashington Homes

I like your idea of getting our lawyers to do some background checks in future. Great idea.

Youre welcome. They are capable of doing a lot of stuff they may not have on their services list. Easy money for them.

alexp79 · May 23, 2023 12:44 pm

Oh...

It is really a shame that such people are still allowed to work in the industry.

I think the main lesson to learn here for everyone is to never pay full amount until you see the product delivered and installed...

I had made one of mistakes like this with the concreter where I lost around $30k and had to dig out and redo the non-compliant footings at my own expense.

Ashington Homes · May 23, 2023 12:46 pm

alexp79

Oh... It is really a shame that such people are still allowed to work in the industry.

I think the main lesson to learn here for everyone is to never pay full amount until you see the product delivered and installed...

I had made one of mistakes like this with the concreter where I lost around $30k and had to dig out and redo the non-compliant footings at my own expense.

There are some less than honest people in this industry

ponzutwo · May 23, 2023 12:48 pm

Well Simeon, if you'd just gotten BIM, data and proofs, you'd have avoided a 100k loss 😆

alexp79 · May 23, 2023 1:02 pm

ponzutwo

Well Simeon, if you'd just gotten BIM, data and proofs, you'd have avoided a 100k loss 😆

... and 3 quotes!

Ashington Homes · May 23, 2023 1:03 pm

ponzutwo

Well Simeon, if you'd just gotten BIM, data and proofs, you'd have avoided a 100k loss 😆

That comment was hilarious.

You brought sunshine into my day

ponzutwo · May 23, 2023 1:28 pm

alexp79

ponzutwo

Well Simeon, if you'd just gotten BIM, data and proofs, you'd have avoided a 100k loss 😆

... and 3 quotes!

from idiot builders who you cant trust anyway, because theyre not in the most trustworthy professions according to a survey and chatGPT. Did you know engineers are in the top 3 trustworthy professions 10 years running?

Ardo · May 24, 2023 8:55 am

So why no more steel frames? It was just one company, not s reflection on the steel frame industry.

bannie · May 24, 2023 7:14 pm

Ashington Homes

Hi Everyone

This is the tale of probably the biggest mistake I have ever made financially and a warning to everyone about doing your research as to who is behind a company in the building industry before you hand over any money.

As background we switched to using steel frames during COVID due to a lack of timber. We used a company called GNL and whilst their frames were good but sometimes slow with their delivery, their installation process was incredibly slow.

We built 3 houses with GNL frames.

After this we decided to make the switch back to timber, however there was one contract we had signed with the world's nicest couple and we had agreed to use steel on their home. We asked if we could swap to timber but they had their hearts set on steel. So we needed to find a new company.

So I started googling and found a local company based in Lane Cove, they had a fantastic professional looking website, they were incredibly professional when I spoke to their sales staff. So in November 2022 they promised that if I handed over the 50% deposit that all of these framing companies require, they would have no problem delivering the frames by the 14th January 2023.

By the first week of March they were running 6 weeks late but they promised me that if we paid the remaining 50% they would have all frames delivered in 2 weeks.

Fast forward to today, we only have 12% of our frames onsite.

We struggle to get phone calls answered, emails returned etc. We have even been to the address listed on their website and they aren't there.

The ABN they are using doesn't belong to the company who we signed the contract with.

The scariest part is that we researched the directors of the company that does have the ABN and he has 676 NSW fair trading complaints against him and two criminal prosecutions with fines issued that he hasn't paid.

We even found warnings issued by NSW Fair Trading against doing business with him and a newsletter that had been circulated on the North Shore warning people against dealing with him.

They are trading under the name of Stratosphere Steel but the ABN is registered to a company called Raytech

At this stage NSW Fair trading wont help as it's a business to business issue so we are bringing in the lawyers.

The big lesson is that we will never hand over money again unless we know who we are dealing with.

In hindsight, there were so many red flags such as no one would ever give their surname, no one had a personal email and everytime we asked to come to the office to have a meeting they would make an excuse.

The director is George Sekuloski.

Here is a Daily Telegraph article about him:

https://www.dailytelegraph.com.au/news/ ... 663a134b1c

And another link to a forum when he was selling 4wd products:

http://www.myswag.org/index.php?topic=24396.0

It would seem that he is a serial businessman who doesn't deliver.

Anyway, that is how I lost $100,000

That's a hard pill to swallow. Feel bad for you mate. I have sent you a pm reading a different matter, hoping you might be able to help/point me in the right direction.

Ashington Homes · May 24, 2023 8:30 pm

Ardo

So why no more steel frames? It was just one company, not s reflection on the steel frame industry.

Hi Ardo,

We have used two steel companies now, and I do hear that there are some good ones out there, but there are a lot of cowboys as well.

We could keep trying more companies till we find a good one but when they all require such large payments up front before they start the design it's a big risk.

But there are other issues we don't like as well, namely:

1. Speed - so far it seems to take 8-12 weeks minimum to get your frames from deposit stage to site and then there are so few tradies here in Sydney who erect steel frames that you then need to wait for them to be ready if they are committed on other jobs. Yes we pre book them but it is very hard to get an accurate delivery date so if the framing companies miss their date you lose the tradies to another job.

A good timber framing crew can erect a double story home in 3 weeks. You put your order into one of the many timber yards here in Sydney and you will have your material on site in a day or two.

2. Weakness of the frames - Overall I believe there is no difference, however we are struggling to attached wall hung vanities and TV units to steel frames. As the steel frame is a U or C channel and the gauge of steel is quite thin, screws don't have the same purchase as they do with a 90 x 45 stick of timber. So heavy wall hung joinery is less off an option.

3. General lack of flexibility for onsite modifications - this one is self explanatory, but is a big one when you are doing custom homes and the clients come to site all the time and want changes when things don't look how they imagined on 2d plans.

I could add more, but it's been a long day

Cheers

Simeon

MyFirst · May 26, 2023 10:02 am

Question has anyone live in a steel frame double storey house and happy about it? I really can't imagine the noise.

For me a simple example I build a timber frame house but the joist they put metal strap on it "X" shape for extra support. When you walk on it etc.. it just "rings" LOL... BUilder had to cut open the particle board and theeasy fix just put silicone between the metal strap and the timber joist.
Supervisor said the strap was tight. Isn't it suppose to be.. I think he also learned his lesson and in future any house he mgd he will make sure he put silicone in between.

I can imagine steel frame house will have all sort of sound.

I have colorbond roof already feels it's much noisier than a concrete tile roof.But for roof I think I'm willing to accept it since I can't imagine in 2023 people use concrete as their roof for a new house.

Ardo · May 28, 2023 6:58 pm

Supposed to be nailed to the joist/stud after tightening.

stonesthrow · May 29, 2023 3:23 pm

That sucks! Hope it all works out.

Good to move away from steel anyway for all your reasons, but it's also thermally poor.

stonesthrow · May 29, 2023 3:23 pm

That sucks! Hope it all works out.

Good to move away from steel anyway for all your reasons, but it's also thermally poor.

wterit · Jul 01, 2024 1:20 pm

Hi , I am incredible frustrated, no power no money, but this piece of information, use his last name

NSW check own a build permit

I hope you can make any justice

Ashington Homes · Jul 01, 2024 1:22 pm

wterit

Hi , I am incredible frustrated, no power no money, but this piece of information, use his last name

NSW check own a build permit

I hope you can make any justice

Thanks.

I did everything in my power from fair trading to the ATO ( he was issuing invoices with other people's ABNs).

No one seems to have an appetite do help, so I have just taken it as a learning experience and moved on.

Life is too short to dwell on these things.

Cheers

Simeon

SaveH2O · Jul 01, 2024 2:01 pm

Ashington Homes

No one seems to have an appetite do help,

When virtuous men remain silent, wickedness doth reign.