Beechwood Homes

Ms NOREEN HAY: I direct my question to the Minister for Fair Trading. Will the Minister update the House on the latest information relating to Beechwood Homes?

The SPEAKER: Order! The member for Murray-Darling will come to order.

Ms LINDA BURNEY: I am advised that yesterday Beechwood Homes entered into voluntary administration. This is a serious situation because Beechwood Homes is one of the larger construction companies in New South Wales. This must have come as a terrible shock to the families who have signed contracts with one of the biggest home builders in New South Wales. I understand that about 300 families have been affected by the collapse of this building company. Most of the building contracts were in the Hunter and Sydney and on the South Coast. Some building is also underway on the Mid North Coast.

I ask members who are approached by families who have been affected by this collapse to advise them that my office and the Office of Fair Trading will provide assistance in obtaining answers to their questions. Obviously this is a very distressing situation. As I said, about 300 New South Wales families have been affected by this collapse. My message to those consumers who have been affected is not to panic and not to terminate their contract with Beechwood Homes. It is very important that members, the Office of Fair Trading and I get that message to the people who have been affected: They should definitely not terminate their contracts and they should not panic.

The Office of Fair Trading is working very closely with the administrators. I was advised just before question time that BankWest, one of the secured creditors, is moving towards appointing a receiver. The situation is changing rapidly. I share the worries of clients of Beechwood Homes and also tradespeople who will be caught up in this unfortunate situation. I advise members and people whose homes are already under construction that the administrators intend to engage builders to complete the jobs. I can inform those who have signed contracts—and this is an important message, particularly for those members whose constituents are affected—that the jobs will be completed.

For those who have signed a contract and who are waiting for work to start, our advice is not to cancel the contract. Under the Home Building Act in New South Wales, home warranty insurance certificates must accompany contracts. So a company of this size will have warranty insurance certificates. This protects consumers in New South Wales for incomplete work to a maximum of $300,000. It also covers loss of deposit. That is important because a number of people will have put down their deposit but not had construction start. They will be protected as well. The home warranty insurance scheme is an integral part of our consumer protection framework for home building work in New South Wales. I understand that a certificate of insurance issued by Vero should cover all homes currently under construction by the Beechwood group. The Office of Fair Trading is working closely with the administrators.

One important point we are in the process of establishing is how many tradespeople will be affected by this collapse. I strongly encourage the receiver to redeploy current employees to finish the homes so that they are not disadvantaged as well. I am also advised that the situation appears to be due to the current economic climate and is not the result of poor or defective building work. I have asked the Office of Fair Trading to work with the administrator, Armstrong Wiley, and Vero, the private home warranty insurer, to bring about a quick resolution of this situation for all consumers. Should the administrator be unable to have the homes completed, the home warranty insurance protection framework established by the Government will provide consumers with protection of up to $300,000 to enable their homes to be completed or their deposits recovered. I am advised that that $300,000 will protect the people involved. In conclusion, I urge consumers to contact the Office of Fair Trading on 13 22 20 for assistance to guide them through this difficult time. The Office of Fair Trading has requested me particularly to make it clear that it is there to support consumers.

Mr Chris Hartcher: That number again?

Ms LINDA BURNEY: The member for Terrigal may not think this is important. He has spoken all the way through my answer. I hope that those people affected by this collapse will note his performance.

Question time concluded.