ASPIRING home owners in a Huntly residential estate could be left out of pocket after the company appointed to build 20 townhouses in the development announced its plans not to proceed with the project.
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The Melbourne-based building company Vita Building Group Pty Ltd has cited the increased cost of materials as one of the main reasons for the decision to abandon the project, and has offered to refund deposits to affected customers.
Another option to be presented to affected landowners is to proceed with an alternate builder, but that would involve an increase in material costs of about $120,000 from the original price quoted to customers in the development.
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One affected landowner, who the Bendigo Advertiser has opted not to identify for privacy reasons, now says they feel like two years of their life have been wasted, having purchased a house-and-land package in Provenance Estate, Huntly, about two years ago.
Construction was originally scheduled to be finished about 12 months later, but the onset of the COVID-19 pandemic caused significant delays.
"The thing was we just never heard anything," they said.
"No one challenged it until I started saying 'what's going on?' and got other owners on board."
The landowner claims building was then supposed to begin in September last year and believes there are about 20 home owners who are affected.
"I did some detective work on Facebook and found other owners," they said.
The owner said they and other owners are now in communication with each other now and can work as a team .
"But there is a lot we just don't know," the owner said. "They could have started building in September last year, that's when they got green light but we were kept in the with the insurance audit."
Vita Building Group Pty Ltd told the owner it was going through an insurance audit in January.
Documents obtained from the Australian Securities and Investments Commission show an application to wind up Vita Building Group Pty Ltd was lodged with the Supreme Court in October 2021 by a disgruntled creditor of the company. That application was subsequently dismissed in January 2022.
The company's website describes the organisation as a team of property development experts offering comprehensive building services to commercial and residential projects across Victoria, with developments across the state including in Bendigo, Melbourne, Mornington, Frankston, Dandenong and Sunbury.
This week, lawyers for the developer - Huntly Property Holdings Pty Ltd - sent a letter to property owners advising Vita had announced it would not be able to proceed with construction and that any deposits paid by the owner will be refunded.
The letter states Huntly Property Holdings has approached several local builders to construct the project with quotes for the dwellings going from Vita's quote of $174,900 to $294,721.70 or from $169,900 to $289,832.23 depending on the type of plan.
Owners have been given the option to sell the land on the open market, let developers buy back the land or build their planned homes on the land.
Lawyers representing the developer said the builder is independent of Huntly Property Holdings Pty Ltd.
"Any deposits paid by lot owners were paid to Vita as their appointed builder pursuant to a building contract between the lot owners and Vita," a spokesperson said.
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The owner said their bought the property with the help of the First Home Owners grant worth $20,000, the Home Building Grant worth $25,000 as well as money from their parents.
Their house-and-land package was worth $269,000.
"There's no way I can afford (the new quotes)," the owner said. "I just feel like I have wasted two years of my life. I borrowed deposit money from my parents and now I have to pay them back. I don't know how I can afford to get into the property market now.
"It is just so defeating. I just feel like they knew this was happening six months ago, so they should have knocked it on the head then. The lack of communications and transparency has been frightening."
The letter also states each affected property owner will also need to give consideration to the impact on its ability to claim grants from the State Revenue Office.
"We understand that such grants will only be paid on satisfaction of certain conditions which include the existence of a valid building contract and completion (including payment) of certain works (i.e. the pouring of the slab) within a certain period of time."
Lawyers have also advised whilst they cannot provide guidance or advice about satisfying the SRO's grant requirements.
The letter to the owner notes that "in the absence of a valid building contract and completion (and payment) of the pouring of the slab before the grant expiration period, there will be no entitlement to the existing grant."
The Bendigo Advertiser was unable to contact Vita Building Group Pty Ltd.
Provenance Estate was also contacted for comment.
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