Browse Forums Building A New House Re: Cosmopolitan Homes - Liquidator appointed 281Apr 12, 2012 9:50 am Claims Update No 3 - Cosmopolitan Constructions and Westminster Homes | 13 Mar 2012 The following update as at 8 March 2012 is provided for the information of clients of Cosmopolitan Constructions and Westminster Homes who have made claims under their home warranty insurance policy with the Home Warranty Insurance Fund via its agent QBE Insurance (Australia) Limited. The insolvencies of Westminster Homes and Cosmopolitan Constructions have been the first test of the home warranty insurance scheme involving major builders since the Self Insurance Corporation, trading as the Home Warranty Insurance Fund, became the sole insurer in July 2010. The collapse of Westminster and Cosmopolitan has generated 214 non completion claims. Some 127 claims have been finalised to date. It is anticipated that large non completion claims may take three to four months to finalise with the recent spate of wet weather and the building industry shut down of three weeks over Christmas impacting on the timeframe. There has also been some delay as a result of the volume of claims hitting at the same time and the time required for builders to complete quotes. The NSW Government has reviewed the approach to managing current claims under the home warranty insurance scheme. As a result of the review, the Home Warranty Insurance Fund will accept a higher level of liability for incomplete work for such claims. This will have the effect of increasing the non completion cap from 20% to 40% for all Westminster and Cosmopolitan claims (refer to Clause 1.3(c) of the Home Warranty Insurance Policy for Residential Building Work). This is intended to avoid the situation where some claimants may incur uninsured losses on some claims, depending on the stage of the progress payments at the time of insolvency of the builder. The continued existence of a cap is considered appropriate to ensure that homeowners assume some responsibility for accepting uncommercial quotes from their builder or agreeing to progress payments that do not reflect the stage of works completed. Please note that defective items or rectification works required to work already carried out by the insolvent builders are not subject to the non completion cap limitations, and are paid separately to the non-completion loss. Westminster Homes The Westminster claims were parcelled into five groups and sent to major builders for quotation. The intention was to treat the claims as a collective thereby limiting uninsured loss for homeowners as well as the Home Warranty Insurance Fund’s exposure by providing scale to the project and using major reputable builders. It was also anticipated that time would be saved by dealing with major reputable builders who had expressed interest in supporting claimants. Regrettably, the industry shutdown over Christmas, wet weather and the scale of work required has in some cases delayed a final settlement. Two of the groups have been offered settlement letters based on the quotes received. Two groups have had to be retendered because one of the original builders approached withdrew support. The final three groups of settlements will be made as soon as possible. The Home Warranty Insurance Fund had agreed with the tendering builders that they would obtain the entire group of contracts to ensure that homeowners and the Home Warranty Insurance Fund benefitted from scaled up operations and the builders having an incentive to quote competitively. The below table includes claims under policies issued by Vero Insurance Limited and Lumley General. Table Updated as at 13 March 2012 Total Non-completion Claims Claims Settled Claims Outstanding Central Coast & Hunter 13 13 0 North & North East Sydney 19 19 0 South West Sydney & Macarthur 8 8 0 West & North West Sydney 18 9 9 Inner West, South & South East Sydney 11 11 0 Individual difficult cases 1 0 1 Loss of Deposits 5 5 0 75 65 10 The quoting builder tender was in respect of the drawings; specifications and colour schedules contained in Westminster’s contract files which were obtained from the liquidator. The obligation of the successful builders is to complete the home to the same specification and details originally agreed with Westminster. Homeowners with settlement letters should contact the successful builder and have building contracts prepared for completing works in accordance with the Westminster documentation. The quotes have included some items of defective work identified during the quotation process. There may be matters that were not identified previously or have occurred since the homes were last inspected. These matters will be treated as variations to the settlement and if justified should be added to the building contract as a variation. Cosmopolitan Constructions Cosmopolitan Constructions had liquidators appointed 4 November 2011 with 132 incomplete dwellings all insured by the Home Warranty Insurance Fund. Of the Cosmopolitan claims 57 percent have had quotes and assessments completed. Two homes were occupied by homeowners before Christmas 2011 with three more completed during January 2012. All sites have been comprehensively assessed by a builder or consultant and a detailed scope of works prepared for tendering. Quotes for Cosmopolitan claims were called from the whole industry to give work to smaller builders with a proven capacity and track record. An expression of interest was circulated through the industry associations. Homeowners were also able to obtain their own quotes. All clients of Cosmopolitan with valid contracts and policies of insurance where the works had not commenced have had the building contract deposits refunded. Total Non Completion Claims Claims Settled Pemulwuy Estate 22 21 Jobs nearing completion 37 19 Various projects throughout Sydney and Central Coast 36 3 Loss of Deposit 37 37 Total 132 80 Once claims settlements have been offered homeowners will be required to negotiate a building contract with their choice of builder. The Home Warranty Insurance Fund will provide the tender documents used as the basis of the claim settlement. Homeowners with settlement letters should contact the successful builder and have building contracts prepared for completing works in accordance with Cosmopolitan documentation. The quotes have included some items of defective work identified during the quotation process. There may be matters that were not identified previously or have occurred since the homes were last inspected. These matters will be treated as variations to the settlement and if justified should be added to the building contract as a variation. It was fairly obvious that Jon East manager of the NSW Home Warranty scheme was going to have to lift the non completion cap on these claims due to the significance of the front end loading of the progress payments in the contracts. An issue that the scheme was notified about by all the prior private insurers when they took over the scheme in 2010. This now sets a great precedent for future non completion claims where the progress payments are front end loaded and a warranty certificate is issued by the scheme effectively sanctioning the payments. Watch for a big blow out in the future claims and rising warranty premiums through the effective doubling of the non completion exposures especially for the medium to large builders...........NSW Taxpayers beware.....Note the underwriting losses advised prior to these large insolvencies........ Re: Cosmopolitan Homes - Liquidator appointed 282Apr 13, 2012 1:02 pm Tintin, congrats on moving into your home! I saw you outside your house a few weeks ago. I was going to stop the car and say hello but got shy. Your place looks great. We've just put in our defects claim so now we wait for that. Cosmo didn't put adequate drainage in so with the wet weather we've had, it was easy to spot any issues. once that is solved we can tile the front porch and then we are done. Certifiers should be out on Monday so hopefully they'll sign everything off and we can forget about this sorry story. Land at Chermside At tender stage Re: Cosmopolitan Homes - Liquidator appointed 283Apr 13, 2012 1:32 pm zozo Cosmo didn't put adequate drainage in so with the wet weather we've had, it was easy to spot any issues. Good to hear you are so close. Your drainage problems - were they from the roof, tiling or plumbing? Or water drainage on the ground / site? (We have a sloping block and are a bit concerned about our site drainage issues, and I hear people mention drainage issues a lot, so I was wondering what type you have?). Thanks. SunshineT's Build: viewtopic.php?f=31&t=34585 Designs start: 4/12/09 DA: 5/7/11 Demo: 22/12/11 Slab: 24/2/12 Keys: 31/8/12 Re: Cosmopolitan Homes - Liquidator appointed 284Nov 16, 2012 9:01 pm Hi everyone. I just read this whole thread to gain some insight on our current situation with the administration of ProCorp Builders. I was just wondering on everyone's general outcomes such as timeframes? how much you were out of pocket with new quotes from the builders that took over and if you were able to re-jig your tender to bring the quote down if you weren't in any position financially to cover out of pocket expense? PM if you would prefer pertaining figures etc. Thankyou Thanks everyone as you can imagine all questions are ones you've probably experienced first hand and any info would be appreciated. Re: Cosmopolitan Homes - Liquidator appointed 285Nov 16, 2012 9:29 pm Dan17179 Hi everyone. I just read this whole thread to gain some insight on our current situation with the administration of ProCorp Builders. I was just wondering on everyone's general outcomes such as timeframes? how much you were out of pocket with new quotes from the builders that took over and if you were able to re-jig your tender to bring the quote down if you weren't in any position financially to cover out of pocket expense? PM if you would prefer pertaining figures etc. Thankyou Thanks everyone as you can imagine all questions are ones you've probably experienced first hand and any info would be appreciated. Refer to 20% non completion cap override authorised by sicorp and check the progress payments in the procorp contracts to see if they were taking excessive payments in advance of works being done that will cause uninsured losses for the consumers who contract with them........ Ask for references and speak to them. If they are defensive or try to avoid the request, walk. 1 74701 I would never build with Fowler homes. I built with them in 2021 and till date maintenance issues are pending. All their existing trades and businesses don't work with… 14 105551 Hi there! Putting the feelers out there for those who have (or almost) built with Arli homes! Interested in your experiences who've built from their stock home designs… 0 23482 |