Browse Forums Building A New House 1 Nov 19, 2012 10:11 am Hello, As you must be aware that Procorp have gone into administration. We are left stranded without the start of any building work in our block. We are angry with Procorp business owners who did not do morally right by signing the new customers for building their homes when they clearly knew that they were in financial troubles. They can’t say that they did not see this coming. They did not do there job properly, resulting in suffering for so many people with financial hardships and some cases it may also affect peoples health and relationships. It is hard to achieve success, but even harder to maintain success, and they should have known this fact. The signs of potential downfall were there. They could have and should have done something. However in our case, our house was a custom design by Procorp, which we are not sure if it may or may not be complying development certified at the time of going into administration. We had also signed a contract, but don’t know if there was an insurance cover which in our case was supposed to by MBA (not QBE). By the looks it should be an easy outcome for us. Take the design and the approvals to another builder and start building. But its not that easy. First we will have to have the contract cancelled by the administrators, and them to authorise the release the copyright of the designs and other relevant documents. The creditors meeting has been called, which we don’t know whether we should attend or not. So far contact with the administrators Hall Chadwick is not leading to anywhere, as they are not prepared to look into individual cases. Is there anyone else in a similar situation? Or someone who can comment on how should we handle our case? Thanks Re: Procorp- House building not started yet. What next? 2Nov 19, 2012 11:49 am Hi B positive I note the irony in your profile name. My husband and I are also affected by this and had slab poured and frame up just before this happened and in hindsight I totally agree with you that they saw this coming a long time ago. I was just going to suggest that you may want to repost your question on the "ProCorp Administration" thread here on homeone. I have had numerous questions answered by others including those who went through this with Westminster and Cosmopolitan Homes collapses. Re: Procorp- House building not started yet. What next? 3Nov 19, 2012 12:58 pm Thanks, by the way B Positive is also my blood group. I hesitated to post it onto the other thread which I have been reading all the valuable information so far. I was thinking if I start a new thread with specific question, I may have possibly information from someone to share where the built had not started, but a contract had been signed. In the other thread the main discussion is taking place, who are mid-way through their built with insurance involvement and I did not want to disturb the rhythm of information flow for the people who are in bigger trouble than us. It looks like we cannot do anything other than wait and see. So let’s wait and see….. Re: Procorp- House building not started yet. What next? 5Nov 19, 2012 1:27 pm I would have thought that for a custom design, copyright would be yours. As for being released from your contract, check with Fair Trading, but unless Procorp find a way to continue operating (from everything I've heard, this is almost impossible) you cant be held to your contract. Further, depending on which stage you're at, if you have all the approvals but they cant start - they'll go over the allowed time to start construction which would put them in breach. Re: Procorp- House building not started yet. What next? 6Nov 19, 2012 2:35 pm Thanks b0son The drawings in the bottom note copyrights to Abeaut Design Pty Ltd 2012. Which I understand can't be used without permission. You are right that we paid for it, but I have to be honest that we were told about the copyright arrangement, which we didn't bother at that time. We should have. If Procorp goes into liquidation then the contract can be ended by a written letter as per clause 34. If the administarators allow, I guess the contarct can be made void earlier by mutual agreement. At this stage Hall Chadwick are saying that they have not started to look into case by case. We are not sure if the plans were fully approved at the time of going into administration to comence building work within 20 days as per clause 8. So not sure if they are in breach or not. In these circumstances, we can only wait for a phonecall form Hall Chadwick to discuss and try to work out a solution suitable to both the parties. Even our case might appear straight forward, but we don't want to be impatient and face a possible pitfall. The old saying goes like this, 'knowledge of the rule is importatnt to break the rule'. But we are open to look at all the avenues. Every input is beneficial. Re: Procorp- House building not started yet. What next? 7Nov 19, 2012 2:54 pm B_Posi+ive We are not sure if the plans were fully approved at the time of going into administration to comence building work within 20 days as per clause 8. So not sure if they are in breach or not. Contact council, they will tell you whether your DA was approved or not and when the builder was notified. Re: Procorp- House building not started yet. What next? 8Nov 19, 2012 4:19 pm B_Posi+ive, We had a custom design with Procorp as well (copyright with Abeaut Design, which I assume may have been a separate company run by someone who worked in their design team?). I'm not sure exactly what stage you're at, but it sounds like you've paid drawing fees (for us this was $3k, around 3 months prior to council approval) and council lodgement fees (for us this was $5.5k, around 1 month prior to council approval), and that you've also signed your contract, but maybe not yet paid an initial deposit? (For us, this was 5% less the $8.5k we'd already paid). We didn't get a copy of our insurance until about a month after we signed the contract, as part of the documentation that our bank required along with our application for loan approval. Although our contract with Procorp had MBA Insurance Services listed as the insurer, our actual policy document was isssued by QBE (I think MBA Insurance Services are a broker only), so it's probably worth calling QBE to see if you can find out if you had an insurance policy. My guess would be that if you're insured you get the full cost of your deposit back, and if you don't get permission to use the plans then you may need to start from a blank sheet of paper with a new custom builder. If you're not insured, then I'll cross my fingers for you that: - Procorp have paid for council approval, and this is in train; - you can get permission to use the design from Abeaut Designs (I'll PM you some details); and - Procorp would be willing to end the contract by mutual agreement (saves you the requirement to keep logs of spending and send them a summary of costs after practical completion etc). Re: Procorp- House building not started yet. What next? 9Nov 20, 2012 7:35 am Thank you DeanandKerry for a comprehensive explanation and for the PM. Very useful information. It has given us few directions to work on, and way outs to handle the things which we had not thought before. For example we were not too caring about whether we were covered under insurance or not. I will call QBE, to find any information if we were already insured. It can make a difference. We have paid $10,348 so far $1848 for the black floor layout drawing and site reports $3500 for the working drawings $5000 for the complying development certification (CDC) B0son We were going for a Complying Development Certification, not the council’s development approval. Which we are guessing must have been completed at the time of Procorp going into administration. But we don’t know who the private certifier was, therefore cannot confirm. Lets put it this way. We were at a point where we were expecting the phone call that the dirt digging will start any day, and we were looking forward to portable loo to be placed in our block (not something to really look forward to). Instead we got the news of administrators moving in. We had a very poor communication from Procorp. Phone calls were not replied. E-mails were ignored. Not sure, if that was the tactic as they knew what’s coming or the person was a low morale employee from the financial condition of the business. As a result we are left to put the pieces together. DeanandKerry, you wrote If you're not insured, then I'll cross my fingers for you that: - Procorp have paid for council approval, and this is in train; - you can get permission to use the design from Abeaut Designs (I'll PM you some details); and - Procorp would be willing to end the contract by mutual agreement (saves you the requirement to keep logs of spending and send them a summary of costs after practical completion etc). I did not completely understand the third line. Can you please explain, which logs we have to keep? For just in case…. Re: Procorp- House building not started yet. What next? 10Nov 20, 2012 8:38 am B_Posi+ive The drawings in the bottom note copyrights to Abeaut Design Pty Ltd 2012. Unless you have signed an agreement that waives your rights, IMO, that copyright symbol is meaningless. They've been paid for their time, and the intellectual input re: design layout was provided by you. Re: Procorp- House building not started yet. What next? 11Nov 20, 2012 8:50 am B_Posi+ive We were going for a Complying Development Certification, not the council’s development approval. Which we are guessing must have been completed at the time of Procorp going into administration. But we don’t know who the private certifier was, therefore cannot confirm. Local Certification Services (02) 4655 5811 They did ours (earlier this year), chances are they did yours. Re: Procorp- House building not started yet. What next? 12Nov 20, 2012 9:18 am B_Posi+ive DeanandKerry, you wrote If you're not insured, then I'll cross my fingers for you that: - Procorp have paid for council approval, and this is in train; - you can get permission to use the design from Abeaut Designs (I'll PM you some details); and - Procorp would be willing to end the contract by mutual agreement (saves you the requirement to keep logs of spending and send them a summary of costs after practical completion etc). I did not completely understand the third line. Can you please explain, which logs we have to keep? For just in case…. Basically, if the builder has its licence cancelled, or suspends the building works, you can end the contract (clause 33 of the HIA contract we signed) If you do end the contract, you have to complete the building works and keep records of the costs incurred. You have to take reasonable steps to minimise the cost of completing the building works, and give details of costs to the builder once the building works reach practical completion. If your costs are higher than the remaining payments due to the builder, you send them a bill for the difference (and if your costs were lower you pay them the difference) (clause 36 of the HIA contract we signed) Re: Procorp- House building not started yet. What next? 13Nov 20, 2012 11:31 am b0son B_Posi+ive The drawings in the bottom note copyrights to Abeaut Design Pty Ltd 2012. Unless you have signed an agreement that waives your rights, IMO, that copyright symbol is meaningless. They've been paid for their time, and the intellectual input re: design layout was provided by you. Probably you are right, but I will be very cautious, before taking further steps in that direction. It makes sense though, if we pay for a service we should own the rights too. Re: Procorp- House building not started yet. What next? 14Nov 20, 2012 11:32 am b0son B_Posi+ive We were going for a Complying Development Certification, not the council’s development approval. Which we are guessing must have been completed at the time of Procorp going into administration. But we don’t know who the private certifier was, therefore cannot confirm. Local Certification Services (02) 4655 5811 They did ours (earlier this year), chances are they did yours. Thanks, Called them, they were doing ours but have not released it as yet, and have not been paid as well. Re: Procorp- House building not started yet. What next? 15Nov 20, 2012 11:33 am DeanandKerry B_Posi+ive DeanandKerry, you wrote If you're not insured, then I'll cross my fingers for you that: - Procorp have paid for council approval, and this is in train; - you can get permission to use the design from Abeaut Designs (I'll PM you some details); and - Procorp would be willing to end the contract by mutual agreement (saves you the requirement to keep logs of spending and send them a summary of costs after practical completion etc). I did not completely understand the third line. Can you please explain, which logs we have to keep? For just in case…. Basically, if the builder has its licence cancelled, or suspends the building works, you can end the contract (clause 33 of the HIA contract we signed) If you do end the contract, you have to complete the building works and keep records of the costs incurred. You have to take reasonable steps to minimise the cost of completing the building works, and give details of costs to the builder once the building works reach practical completion. If your costs are higher than the remaining payments due to the builder, you send them a bill for the difference (and if your costs were lower you pay them the difference) (clause 36 of the HIA contract we signed) Thank you. So far we have not spent any money, but it’s a good point to keep the records, just in case. Called QBE, they couldn’t find any records of any policy for us, means we are not insured. Not sure if Procorp had their general business liability insurance, and we could claim under that policy, if we have to Re: Procorp- House building not started yet. What next? 16Nov 20, 2012 12:57 pm With the development certification, it sounds like you could be an unsecured creditor of Procorp (e.g. you've paid for them to get your development approval, but they haven't provided it to you). Contact the administrator (call Alex Frazer at Hall Chadwick, the switchboard number is +61 2 9263 2600) and they may send you some forms to complete. Don't expect to get your money back, but you could at least get a portion back, so it's worth doing. Also, if you happened to pay for either the plans or the development certification by credit card, you may be able to request a charge-back through your card issuer. Re: Procorp- House building not started yet. What next? 17Nov 20, 2012 2:42 pm B_Posi+ive b0son B_Posi+ive The drawings in the bottom note copyrights to Abeaut Design Pty Ltd 2012. Unless you have signed an agreement that waives your rights, IMO, that copyright symbol is meaningless. They've been paid for their time, and the intellectual input re: design layout was provided by you. Probably you are right, but I will be very cautious, before taking further steps in that direction. It makes sense though, if we pay for a service we should own the rights too. I guess the main questions is: if you need to get another builder to complete the build, could the other builder be liable for using the plans without permission from Abeaut Designs? For Cosmopolitan Constructions last year, the company announced that for clients with accepted tenders or signed contracts, "Where construction has not commenced and no home warranty insurance exists, to the extent that the intellectual property is Cosmopolitan Constructions, it will be assigned to clients to allow them to proceed with a builder of their choice." Procorp may be different, particularly for custom designs, and because Abeaut Designs may be a third party that itself hasn't been paid by Procorp for the plans they've drawn up with your input (even if you'd paid Procorp). Re: Procorp- House building not started yet. What next? 18Nov 21, 2012 6:10 am STOP!!! STOP!!! STOP!!! To any PROCORP customers who had a signed contract and have Home Warranty Insurance Policy, please note there should be no distinction between "Loss of Deposit" and "Incomplete", regardless of whether the construction had commenced. If another builder cannot build your home for the same contact value, then you have suffered an insured loss. You should seek legal advice. My advice: Do not submit your claim until you have spoken to a specialist lawyer in the home warranty insurance field. Re: Procorp- House building not started yet. What next? 19Nov 21, 2012 6:23 am Public Defender To any PROCORP customers who had a signed contract and have Home Warranty Insurance Policy, please note there should be no distinction between "Loss of Deposit" and "Incomplete", regardless of whether the construction had commenced. If another builder cannot build your home for the same contact value, then you have suffered an insured loss. You should seek legal advice. Note that the original poster (B_Posi+ive) does not have a home warranty insurance policy. Is your point that for customers that do have insurance and have paid a deposit, they should consider whether a refund of their deposit is enough to cover the incomplete work (which would only be the case if another builder can finish the job for the original Procorp contract price)? E.g. Say you had a $300k contract with Procorp, had paid a $15k deposit, and have all the necessary approvals in place but no building work has commenced, and that getting another builder to finish your job would cost $330k. The insurer might offer you the return of your deposit ($15k), but instead you could have the work completed by a new builder for $330k, with the $45k difference bewteen your remaining Procorp funds ($285k) and the final cost ($330k) covered by the incomplete works cover? Re: Procorp- House building not started yet. What next? 20Nov 21, 2012 1:36 pm DeanandKerry With the development certification, it sounds like you could be an unsecured creditor of Procorp (e.g. you've paid for them to get your development approval, but they haven't provided it to you). Contact the administrator (call Alex Frazer at Hall Chadwick, the switchboard number is +61 2 9263 2600) and they may send you some forms to complete. Don't expect to get your money back, but you could at least get a portion back, so it's worth doing. Also, if you happened to pay for either the plans or the development certification by credit card, you may be able to request a charge-back through your card issuer. Just spoke to Alex, they cannot release us from our contract at this stage. There is no confirmation either, when it will be going to happen We are stuck now. Claim Form ???? 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