The promise of a new home has turned into a nightmare for two Adelaide families who say they were sold houses filled with defects. The builder behind the project has been slapped with tens of thousands of dollars in fines. The case has also prompted a consumer warning about a loophole that some builders are using to evade insurance, leaving buyers exposed when things go wrong. Authorities say the situation shows how badly homeowners can be caught out when proper cover is missing.
One of the affected couples, the Sharmas, thought they were buying into the Australian dream when they purchased their first home in Adelaide's northern suburbs. They said they trusted the system and assumed the house would be compliant and properly built. The advertising for the property stated that it had been constructed by a trusted Adelaide company and that it came with a builder's warranty. On paper, it looked like a safe and straightforward first purchase.
The reality, they say, was very different. According to the family, the home was in fact built by an owner-builder with no insurance, rather than the established company suggested in the advertising. After moving in and after settlement, they began to discover that the situation was far worse than expected. At one point a window was permanently closed off, leaving it unusable, one of several problems that emerged once the family had taken possession.
The defects did not stop there. Months after settlement, the family said they were still finding new faults around the property. A builder's report went as far as recommending that the house be condemned. The couple now say they are afraid to let their children play in the backyard, describing the space as dangerous, and saying it has become too hard for them to live there as they had hoped.
At the centre of the regulatory action is a loan advisor who has been fined 75,000 dollars. According to the consumer watchdog, he was penalised for allegedly claiming to be an owner-builder while developing this property and two others. He is also accused of operating without a licence and without insurance, which is the gap that left the families without protection when the defects appeared.
The consumer watchdog has told the broadcaster that an investigation is underway into the suitability of the site supervisor to hold a licence, as well as potential consumer law breaches connected to the builds. If the offences against the trader are proven, there would be an opportunity for compensation through the court process. Lawyers for the advisor said their client was in discussions with Consumer and Business Services and did not consider it appropriate to comment further.
Beyond this single project, officials used the case to issue a broader warning to home buyers. They cautioned that some people purport to be owner-builders when in fact they are operating like a business, doing so to cut costs and undercut their competition. The concern is that this practice can strip buyers of the insurance protections they would normally expect, turning what should be the security of a new home into a costly and stressful ordeal.