Call for more building scrutiny

Benchmark Designer Homes Pty Ltd director Saad Soliman said he would welcome mandatory financial reporting to the commission or to the Australian Securities and Investments Commission (ASIC).

ASIC currently requires most large proprietary companies to lodge their financial statements but smaller companies like Benchmark Designer Homes are not required to submit regular financial statements.

Mt Lawley resident Nigel Hanwell terminated his building contract with Benchmark after extended delays, issues over the quality of the building and a lack of supervision on site.

Mr Hanwell said now that the company had gone into receivership, he would be covered by indemnity insurance but would still be out of pocket thousands of dollars.

�It�s like a building Ponzi scheme that just feeds off every deposit to pay for the next house,� he said.

�I would like to see the Building Commission given the power to look at these companies� finances. Publicly-listed companies have to list their cash flow, so why not building companies?�

Mr Soliman said his company�s financial situation deteriorated in the past year to the point where he asked the Building Commission to do an audit of his statements. But they declined his request.

�We have not been able to convert property into money; it�s not a solvency issue, it�s a liquidity issue,� he said.

�We had almost $10 million worth of work in the pipeline.

�The regulators need to do more to look at finances but also systems and procedures; they need to step up and be proactive.�

HHG Legal Group director Murray Thornhill and senior associate Daniel Morris advise builders and developers and educate industry bodies on legal issues surrounding property.

Mr Thornhill said there was scope for allowing the Building Commission to have access to companies� financial statements.

�The Commission could be given more of an audit role in assessing builders� capacity to meet financial obligation,� he said.

�This would require law reform. But it is something that�s worth considering; they could require annual or bi-annual lodgement of financial statements.�