Joestarr Group building firm served with court-imposed liquidation order, leaving 30 homeowners in the lurch in Melbourne
- Court orders Joestarr Group into liquidation
- Firm blames pandemic-influenced price rises
- Latest in long list of building firms to go under
An embattled building firm has been handed a court-imposed liquidation order after it failed to pay contractors.
Joestarr Homes Pty Ltd, which traded under Joestarr Group, was placed into liquidation by the Victorian Supreme Court on Wednesday after failing to pay an excavation contractor $73,000.
Unpaid invoices dated as far back as May 2021 and around 30 homes have been affected, according to news.com.au.
No representative showed up for Joestarr Homes so the wind-up was initiated unopposed and liquidators Mathew Dieter Windsor Blum were appointed.
Joestarr Homes Pty Ltd, which traded under Joestarr Group, was placed into liquidation by the Victorian Supreme Court after failing to pay an excavation contractor $73,000
The building firm's collapse has affected around 30 properties
Melbourne-based Joestarr Group tells prospective clients on its website it is a 'building company you can trust to deliver quality and a great customer experience'.
The company's director, Joe Frazzica, told news.com.au it was 'an unfortunate situation for everyone involved'.
'This was not something I wanted to happen and I tried absolutely everything to save my business. Unfortunately the price rises during covid have impacted the building industry and my business.'
A devastated couple paid an invoice of $126,000 for the lockup stage of their build but then four days later Joestarr Group warned them of impending liquidation.
'It's our dreams, we've done everything right. We're financially and mentally ruined,' the woman, who did not want to be named, said.
The woman and her partner originally signed a $370,000 building contract with Joestarr Group in 2021.
But nearly two years later, the house is still unfinished.
'We're currently paying $450 a week rent and also paying a $500,000 mortgage for this property we can't live in. It's financially destroying us,' she said.
One couple said the whole experience had been 'soul destroying'
The couple, in their late 20s and early 30s, who are based near Geelong, live in a rental a five-minute drive away from their building site said the process had been 'soul destroying'.
Joestarr Group is the latest in a long list of Australian building firms to go under.
More than 2,000 Australian construction companies have gone under in the last two years, at a rate of more than two every day.
Construction companies are still reeling from the impacts of the Covid pandemic with an added global lack of timber and building materials due to choked supply chains impacted by the Russia-Ukraine conflict.
This has led to the cost of materials rising by more than 20 per cent since the start of 2022.
Modco Residential, based in Perth and founded by glamour couple Cynthia Lu and Yusuf Khan (pictured), entered voluntary administration last week
Pine wood more than doubled in price, while steel, glass, plasterboard, fibre cement and other materials also skyrocketed.
Such price rises meant many fixed contract building projects were no longer viable.
Across Australia, hundreds of millions of dollars are owed by failed companies to subcontractors, tradesmen, clients and the tax office.
Last week, a building firm owned by a glamorous couple who flaunted their lavish lifestyle collapsed.
Cynthia Lu and Yusuf Khan's Perth-based company Modco Residential announced it had entered voluntary administration on Monday.
The shock news came after some contractors claimed they were still waiting to be paid their six figure bills with complaints going back as early as April 2022.
Above is a letter sent by Joestarr Homes Pty Ltd
