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Posted: 2024-07-31 00:38:29

In short:

Perth construction company Nicheliving has failed to get its registration renewed, meaning the company cannot complete any works which require a building permit.

The decision comes after it was revealed Nicheliving has more than 230 unfinished homes on its books.

What's next?

Other investigations into Nicheliving are ongoing, including a probe into whether they were able to get insurance policies for new builds when they were meant to be focusing on existing projects.

A Perth building company with more than 230 unfinished homes on its books has failed to get its building contractor registration renewed, leaving customers facing further uncertainty.

At a meeting yesterday afternoon, WA's Building Services Board refused to renew the registration of Projex Management and Construction, which trades as Nicheliving.

The decision means the company cannot undertake any building work that requires a building permit or enter into new contracts.

It leaves hundreds of customers in limbo and facing the prospect of recovering a maximum of $200,000 from the company's mandatory insurance policy.

A multi storey building construction site situated on a street corner block with branded red text across the fence

Nicheliving has left hundreds of customers in limbo. (ABC News: Gian De Poloni)

The troubled builder was thrust into the spotlight a year ago when customers started raising concerns about lengthy construction delays.

It was revealed earlier this month that more than 230 houses on the company's books were unfinished, with some projects in progress for more than four years overdue.

Director refuses to answer questions

The ABC attempted to question Nicheliving's managing director Ronnie Michel-Elhaj via intercom from the verge of his home in Perth's southern suburbs.

Mr Michel-Eljaj has refused interview requests for months, and again declined to answer questions when approached outside his home on Wednesday morning.

The ABC was seeking to ask him about his company's building registration being revoked, and what would happen to customers and contractors.

The state government has been working with Nicheliving for at least two months, in what Premier Roger Cook said was an effort to understand if the company could complete the projects on its books.

Dozens of customers have been left in distress, including single mother Cindy Richardson, who said she was working two jobs to pay rent on top of the mortgage and rates for a home with no roof or second floor which was long past its scheduled completion date.

shell of brick home with no roof, doors, or windows and rubbish strewn across front

This Kwinana home is one of many on Nicheliving's books that remain unfinished.(ABC Radio Perth: Alicia Hanson)

Fellow customer Richard has been building in Orelia with Nicheliving and said he's felt misled by the company for more than two years.

"I think [the deregistration] is wonderful news but it's also late, it's too late, things should have happened much sooner," he told ABC Radio Perth.

Board loses confidence

Building Commissioner Saj Abdoolakhan said the main issue for the board was the company's accounts.

"We've looked at the finances thoroughly … we've given the company several opportunities to come back and give us additional information which my team has considered in a lot of detail," he told ABC Radio Perth.

"The board was not satisfied in the end that Projex could meet the requirement of the legislation, meaning that the board was not satisfied that it can pay its debts when they fall due."

That's the definition of insolvency under the Corporations Act and raises questions about whether Nicheliving broke the law by trading while insolvent.

 Saj Abdoolakhan wears a suit jacket and blue glasses.

Saj Abdoolakhan said the board had not been satisfied Nicheliving could pay its debts when they were due.(ABC News: Ruby Littler)

Mr Abdoolakhan said that was not a decision he could make but that the corporations regulator, the Australian Securities and Investments Commission, should investigate, and he would write to advise them of the board's decision.

The ABC revealed earlier this month Nicheliving owed the Australian Taxation Office more than $3.8 million, with other companies also taking legal action to recover unpaid debts from the company.

Mr Abdoolakhan said other investigations into Nicheliving were ongoing, including whether they were able to get insurance policies for new builds when they were meant to be focusing on existing projects.

State Opposition leader Shane Love welcomed the action but said the de-registration came from a "normal review" by the state government.

"I find that disappointing, that there wasn't earlier action, this has been going on far too long," he told ABC Radio Perth.

"A number of complaints had been made to the building commission about Niche and questions had been asked about their ability to financially sustain the completion of the contracts."

But Premier Roger Cook defended the length of time it took for the company to be deregistered.

"None of us are surprised that it's come to this particular point, obviously the department has to follow due process," he said.

Cracks begin to show

WA Commerce Minister Sue Ellery said in mid-June that Nicheliving directors Ronnie Michel-Elhaj and Paul Bitdorf had assured her the company was financially sound.

A woman speaks at a lectern.

Sue Ellery met in June with the company's directors, who assured her the builder was financially sound.( ABC News: James Carmody )

Earlier this month, Mr Michel-Elhaj released a statement saying the company had decided to not take on any new projects to "ensure we meet our current obligations".

"We have recently completed 26 homes in the last few weeks alone, with many more completions to follow," he said in the statement.

"We understand the importance of finishing each build and we are dedicated to upholding this end goal for our customers.

"Our team is working around the clock to ensure that every home is completed for our customers."

What happens to unfinished homes?

According to the Home Builders Contract Act 1991, WA builders must take out home indemnity insurance (HII) if the residential building work is valued at over $20,000.

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In cases like this where a builder's registration is cancelled, the policy provides up to $40,000 for a lost deposit or $200,000 for works to be completed or rectified.

"[The] $200,000 is not to finish the project, consumers still have to pay their progress payments," Mr Abdoolakhan said.

"It's to cater for the shortfall if there is [any] between what the previous builder quoted to do the work and [what] the new builder may quote to finish the project."

He encouraged Nicheliving clients, if their HII policy had been taken out in the name of Projex Management and Construction, to contact insurance provider QBE.

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