Largest home builder starts to can fixed-price contracts
Australia's biggest homebuilder, Metricon, has terminated dozens of fixed-price contracts, forcing customers to pay significantly higher prices or walk away from their dream of home ownership. At the same time, the builder has stopped paying commission fees to some agents, without explanation. Metricon denies it's about to become the latest construction casualty after a string of high-profile collapses.
Transcript
00:00 Dozens of Metricon customers say the builder has cancelled their fixed price contract,
00:07 telling them if they want their new home built, they'll need to pay a lot more.
00:11 Frank Falion from New South Wales refused to sign the more expensive contract.
00:16 He said Metricon initially withheld his $24,000 deposit.
00:21 The builder blamed him for breaching his contract by not providing proof of finance, but he
00:26 said he had evidence of the funds and they never asked for it.
00:29 "I had sufficient funds with Extra to finance the entire build.
00:33 They were blaming me for things that they were at fault for."
00:37 He also said he wasn't given the chance to rectify the issue.
00:40 A clause in the contract allowed the builder to walk away after 12 months if it deemed
00:45 the customer had breached their obligations and construction hadn't begun.
00:50 Other Metricon customers say the builder did the same thing to them and now they're being
00:54 asked to sign new contracts with hundreds of thousands of dollars in extra fees.
00:59 "$266,000 without any justification of the price increase.
01:06 We knew that there were problems with the building costs.
01:11 However the fact remains that they took 11 months to put the DA into council."
01:18 Metricon says more than 90% of its 4,500 customers have not been affected.
01:25 The builder says it operates within the law and is committed to fulfilling every valid
01:30 contract.
01:31 The business is struggling to deliver on a glut of fixed price contracts it locked in
01:35 before the costs of labour and materials started soaring.
01:39 Mid last year it was in deep trouble, needing support from the Victorian government and
01:44 an $80 million injection of funds from its owners to survive.
01:49 The ABC can reveal Metricon has put some agents' commission fees on hold.
01:54 One Victorian agent says she's owed $80,000.
01:59 The builder denies it's again in financial strife and says once it's reconciled its balances,
02:05 all agents will be paid.
02:06 [BLANK_AUDIO]