Years ago, I was doing contract drawings for a south Auckland building company called Tuscany Homes. The first house they built was a “nappy valley” 3 bd, 1 bath, 95m2 house…. think Beazley Homes. They worked out a sq. m. rate from that and decided they could build any house for the same rate. Of course, they couldn’t and went under within three years. They were using deposits and progress payments from their freshly started projects to finish off older projects.I wonder how much PPG have been paid via progress payments and not paid subbies . It will be plenty.
I also wonder what KO paid to take over the sites, if anything, but what their cost to complete is. Another badly managed development contract.
The three main things they got wrong. Firstly, not employing a QS to price every project and determine the quantity of materials required. Secondly, building more upmarket houses at a “nappy valley” price rate. And, thirdly, not having individual accounts for all their projects so they had no idea what profit or loss they were making on each one.
What annoyed me most was the owner of the business knew he was calling in the liquidators on a Monday but had a hardscaping company work on the weekend to doing fencing, planting and driveways on four projects…. he knew they’d never get their money.
Last I saw, he had three other housing companies in Northland go under…. including one where he negotiated with suppliers to build a showhome at a reduced cost for their materials they supplied. It was supposed to be open for 12 months and the building company would advertise their products. Less than three months after that, the company went bust….. but not before he transferred the house to a family member.
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