2 days ago
‘Really upsetting': Couple's $252k nightmare
A Melbourne couple's dream home renovation to allow them to become foster carers has turned into 'big black hole' with a bitter dispute emerging, involving an alleged bucket of poo, and the house uninhabitable after more than a year of works.
Lucy* and Leo* claim their renovation has turned into 'a disintegration of the house', ballooning costs and a disgusting find on the home's doorstep.
'(Somone) took a bucket into our home and defecated in our house and then left it outside our front door in the garden,' Lucy told
The couple claimed they were later locked out of their property after the building company did not return to open the locks when the contract was terminated.
'There was a huge lock and a huge chain. Leo had to get a grinder to get the lock off,' Lucy said. 'We shouldn't have to break into our own house.'
But surprisingly, while the couple who are in their mid 40s, are furious with the building company – they have also criticised National Australia Bank for what they see as its contribution to the nightmare scenario.
The bank advised reducing the construction payment schedule from 11 to six instalments resulting in what the couple claim was an alarming overpayment to the company.
'The bank made us change the payment schedule, which allowed the building company to access more money upfront,' Lucy claimed.
'It means the building company were being overpaid at each stage.'
In a letter to the building company in March this year, the couple's lawyers stated the value of the work completed sat at $168,000, despite the couple already paying out $252,000.
Demolition of part of the home began in 2023 and yet the house still resembles a building site, said Lucy, forcing the couple to end the contract at the end of March this year.
'It's so disheartening,' she said.
In March, a building surveyor made directions to the building company to fix a number of works. Defects had also been identified in an expert's report from last year with 10 issues yet to be rectified, the couple's lawyers claimed.
'My partner had to pull out the installation in the roof as the builder had allowed birds to nest and plastered over it and did not remove the bird's nest,' Lucy noted.
The couple requested immediate repayment of $87,000 from the building company earlier this year. Now the couple's lawyers are preparing a case to take to the Victorian Civil and Administrative Tribunal.
The building company did not respond to request for comment.
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Lucy is worried they can't finish the house and will be forced to sell with a loss of $700,000.
Before the renovation the house was worth $1.1 million with the valuation set to jump to $1.25 million to $1.3 million after works were completed.
'We had a real estate agent come through to tell us what we can get now if we sell it incomplete and he told us we would be lucky to get $800,000,' she said.
'So we would lose $400,000 for our principal place of residence and lose $300,000 paid out on legal fees and the builder. That is a $700,000 loss and I can't do that to Leo when he has worked his arse off to pay the mortgage.
'It's a really terrible situation and it's highly stressful.'
Meanwhile, the couple claim they felt unsupported by NAB when making the second last payment of $84,000.
'I rang them and said 'I just want to pay half as we don't have what we are paying for here',' she said.
But she was told by NAB that if she didn't want to pay the full amount that an option was to either to go through an assessment with the credit team as to whether the payment schedule could be changed. Otherwise, they could terminate the building company's contract, reapply for a loan and 'start again'.
Lucy is critical that NAB touts flexibility when it comes to the loan but said that isn't the case and said terminating wasn't an option.
'In that situation, we would have half a house and would be faced with getting sued by the builder and the suing part would have exceeded us making the payment, as it could have been over $100,000,' she said.
When the couple eventually terminated the contract earlier this year they claimed the house was already more than 290 days overdue.
'We can't live there. We have to live in my one bedroom apartment as newlyweds but we've got two little dogs and have to take them out five to six times a day and it's just not fair,' Lucy said.
The couple are now paying the mortgage on the apartment and house, as well as the construction loan, with their request to remain on interest only payments rejected by NAB.
'We are typical Aussie battlers – we don't have lucrative jobs,' Lucy noted.
Meanwhile, Leo believes banks should introduce more inspections before payments are made.
'We are in debt for a house that should have been completed in May last year,' he said.
'It's been compounded by the bank giving us only one option, which was a construction loan of six repayments. If it was a broader range of say 11 repayments and proper inspections we wouldn't be in this situation.'
Lucy said the couple felt like they were 'fobbed' off after lodging complaints with NAB over the handling of the construction loan and have taken the matter to dispute resolution service, the Australian Financial Complaints Authority (AFCA).
The couple knocked back an initial offer from NAB of two months repayment of interest, Lucy said.
They then declined an offer made during the AFCA proceedings, which are continuing, with another meeting being held on Tuesday.
'We are in a housing crisis and we have an empty house and have one we could offer up for rent and we can't do it. It's terrible. We would love to be in position to put our friend, who is a pensioner in the unit, but I can't help. I can't help children as I can't have foster kids in a one-bedroom apartment,' Lucy said.
'I mourn and cry about our freedom of choice as it's so limited. Our life is on hold until we can sort out the bank and the building company.'
Lucy wants to raise more awareness about construction loans, sounding the alarm that she believes consumers are being put at a disadvantage with reduced payment stages, which are generally seen as standard in the industry.
'The banks may think its efficiency or streamlining but it's actually to the detriment to the customer,' she said.
'If I was able to keep the 11 progress payments as per the original contract, I would pay interest on $56,000 for the work completed to date. But because of NAB's product design limitation, I am paying interest on $252,000 and funded the building company for 90 per cent of the work in a house we cannot occupy.'
She believes many other Aussies are also impacted by the same scenario.
NAB would not comment on the specific customer issues.
'Customers have control over releasing payments to a builder as a project progresses under a construction loan. They do this when they are satisfied with the progress of each stage the builder has reached,' said NAB executive Megan Bond.
'It is industry standard for these payments to be made in five stages. This structure ensures customers are entering into an agreement with financially solvent builder.
'Any request to deviate from the agreed payment schedule needs to go through a review process.'
Meanwhile, a spokesperson for the Victorian Building Authority (VBA) said they had received three complaints regarding the building company over the last two years.
'Two of the three have been dealt with,' they noted.
'The VBA is waiting on more information from the third complainant before progressing the matter.'
The VBA has sent out an inspector to examine the building work and complete a report.
The couple did not want to name the building company publicly as the dispute is ongoing.
