'Like a kick in the guts': Failed builder's staff shocked and disappointed

Employees of failed builder Imagine Building Concepts are angry and shocked by the company going into voluntary administration and disappointed at the absence of owners Tim and Sarah Staines.

The 10 staff had no inkling of what was to come when they turned up for work on Wednesday morning until they were called into the office and discovered two “shiny suits” waiting to speak to them.

When the team last saw the Staines before the school holidays, it was business as usual without a hint that the business was in trouble.

One staff member with a mortgage and planning a wedding said the news came as a kick in the guts.

“We didn’t even find out from the owner but a third party, which was pretty, pretty shit,” he said.

“A few of the workers have families, and some of them just recently had their second child.”

The team had not heard anything from the Staines and had been left to clean up everything and bear the damage to their reputations.

“We’re stuck in the firing line while they go away and don’t cop any of the consequences,” the staff member said.

“You think you’re working for a good company and then that stuff gets done to you. It is just the wrong way to go about it.

“I just feel for all the subcontractors working on our sites, and then they’re just not going to see any of that cash.”

The staff will be able to claim what’s owed to them through the federal Fair Entitlements Guarantee, but the superannuation situation remains unclear.

The staff member was optimistic that with the high demand for skilled labour in the Canberra building industry, he and his colleagues should be able to find new jobs.

“We’re all trying to stick together at the moment and just trying to help each other out so we can all go to another company together or go our separate ways,” he said.

The company has one project on the go, the Moment townhouses in Whitlam, which are due to be completed in January 2025.

RSM Australia’s Jonathon Colbran and Adam Cormack have been appointed administrators of the company, which owes $4 million to more than 100 creditors.

Master Builders ACT CEO Anna Neelagama said builders were struggling with a host of issues particularly crippling costs and labour shortages.

“We are saddened by this news and sympathise with all affected parties from employees, subcontractors, suppliers and clients who may have projects at risk. Our focus is on supporting affected members and working with the administrator to help them through this time,” she said.

Ms Neelagama said it was important that issues were nipped in the bud before they got to a stage where people lost money.

She said that despite high demand for housing, people were not going ahead with new builds because the numbers just don’t stack up.

“Since 2019 we have seen the cost of home building increase by more than 40 per cent,” she said.

“We have to make it easier to build new homes by bringing down the cost of construction and reducing the time it takes to build.”

Over the year to June 2024, the cost of building and construction output in the ACT increased by 2.3 per cent, but house building costs increased by 7.6 per cent over the same period.

Compared with before the pandemic, house building costs have risen by 48 per cent in the ACT, and overall, building and construction output costs are up by 15.4 per cent over the same period.

Ms Neelagama said planning and licensing delays, draconian industrial relations changes, inefficient regulation, and unfeasible lending practices also contributed to making projects unsustainable.

Master Plumbers ACT CEO Shane Martin said subcontractors and trades deserved greater protection, such as a subcontractor trust account.

“Many of the trades that have worked on the projects of a building company put into administration can be hundreds of thousands of dollars out of pocket with potentially no way of recouping the cost,” he said.

“This is having a disastrous effect on our industry, damaging their ability to continue carrying on a business in Canberra.”

Mr Martin said subbies were caught in a power imbalance in the construction environment, relying on the builder to pay when the work is complete.

He said a trust should be established into which the builder must pay subcontractors’ fees. This could be distributed to the subcontractor at agreed intervals and when the work is complete.

“A subcontractor trust account would protect the trades sector in the unfortunate event that a builder goes into administration and potentially liquidation,” Mr Martin said.

Imagine Building Concepts joins a number of Canberra-based builders that have gone bust in recent times.

These include two of the ACT’s most prominent firms, PBS Building in 2023 and Project Coordination this year, both of which have been wound up.

Rork Projects, Cubitt’s Granny Flats and Home Extensions and Voyager Projects also went under this year.