West Australian building company Modco Residential has entered voluntary administration, blaming rising costs and the media for its downfall.
The WA building regulator, Building and Energy, warned the public to be “cautious” when dealing with the company because it had significant reason to believe it was under financial stress, with several court cases launched against it.
It said it received reports that subcontractors had not been paid and clients were being asked for payments in advance of work being completed.
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The regulator said the company had left 29 homes unfinished and also warned clients that in some cases their contracts, building permit and home indemnity insurance was actually registered with another builder.
Modco launched in 2020 with a glamorous party and a promise to offer clients cost-effective homes with faster build times.
In a statement posted to its social media pages, company director Damien Clancy said it was entering voluntary administration after “careful evaluation of reasonable avenues”.
He pointed to increased material and labour costs, supply shortages for the business’ downfall, as well as saying the media exacerbated its struggles and fostered distrust with industry contacts.
“In this moment of profound sadness for all that have been affected we hope the close of Modco will be a catalyst to highlight the need for systematic change and industry support to address the issues that persist within the construction sector,” he said.
A company’s appointed administrator, GTS Advisory, will be in contact with all stakeholders, Clancy said.
Modco is the latest in a string of builders to collapse.
It follows the collapse of Porter Davis earlier this year, after the building giant went into liquidation.
Civil design and building firm Lloyd Group was also recently placed into voluntary administration.
Luxury apartment developer EQ Constructions, which is based in NSW, also collapsed owing at least $40 million to $50 million.
West Australian companies WA Housing Group and Individual Developments went bust in January.