Builders are "running out of Peters to pay Paul," subbie spokesman says
Anger is building after a Brisbane home builder collapsed owing creditors more than $7 million, with industry insiders predicting more company failures to come.
Brisbane construction company LDC collapsed earlier this month, appointing liquidator Bill Karageozis of Mcleods Accounting.
Initial investigations found that the builder collapsed owing $7.03 million to 153 subbies, contractors and other creditors. Forty-eight (48) building sites in South East Queensland were affected by the collapse.
The Queensland Building and Construction Commission cancelled LDC’s licence, according to a report by The Australian.
John Goddard, spokesman for Subbies United, said the group was expecting more company collapses this year – potentially outpacing last year – as slowing demand stifles cash flow.
“I think it will be last year all over again, maybe worse,” Goddard told The Australian. “They’re running out of Peters to pay Paul. the cash flow is not there. There has to be something done about this. It’s just getting out of hand and the subbies are left carrying the bag.”
“Be careful with this company”
There appear to have been signs that LDC was in trouble before the collapse. A review of the builder posted two months ago warned clients “to be careful with this company.”
“I wouldn’t recommend using these guys,” said another review, posted seven months ago. “Our journey with these guys was a nightmare. Please don’t fall in the same trap. They will ask for more money in the building stage even if you have a fixed price contract.”
Read more: Yet another Queensland builder collapses
Subcontractors, meanwhile, seem to have grudgingly accepted that they won’t be getting their money from the company, The Australian reported.
“Finished this big two-storey before Christmas inside and most of outside sadly to find out today the LDC Homes building company has gone bust and no pay for me,” a subbie wrote on a Facebook post. “But being a strong family built company Matthews Painting will survive this and I appreciate all the locals and their support.”
At the time of Karageozis’ appointment as liquidator, LDC had 45 full-time, part-time and casual employees, The Australian reported.
Taking aim at QBCC
LDC was founded in 2018. According to QBCC, the company completed 29 projects worth $19.4 million in 2021-22. Many Facebook users questioned whether the company had grown too fast and took aim at the QBCC for failing in its duties as a watchdog.
“To hold a license in QLD, a builder is supposed to have sufficient assets to cover his projects,” Facebook user Robyn Wallace said. “The QBCC is supposed to regulate this and the builder is required to have adequate insurance. Clearly someone is not doing their due diligence.”
A string of collapses
LDC is the second construction company to collapse this year. Earlier this month, Melbourne-based Hallbury Homes went into voluntary administration with about 50 projects still on its books.
Hallbury and LDC were the latest in a string of construction company collapses across Australia. Over the past 18 months, nearly 30 builders have collapsed amid labour shortages, rising materials costs, and ballooning build times.
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