Families’ home deposits ‘go missing’ as Snowdon Developments collapses

The collapse of a major building company has left 550 homes unfinished and nearly $30 million in money owed – with several customers claiming they cannot access their deposits, even though work on their homes has not started. 

Snowdon Developments were ordered into liquidation by the Victorian Supreme Court last month, with 52 workers now unemployed and 262 creditors owed $28.6million.

Australians who shelled out tens of thousands in deposits for construction have now been told by liquidators they can’t find any record of their deposits.

The same liquidators are now alleging that Hamilton Property Group, the firm that engaged Snowden to build their client’s homes, took the deposits as commission fees and never transferred them to Snowdon, which has collapsed.

Liquidators made the claims at a creditor’s meeting last month, where customer Josh Curmi said he was told by a Hamilton worker they had his $11,000 deposit.

He and his wife Alicia bought a home-and-land package through the firm last year, with Snowdon employed to build the $225,000 Melbourne home.

Construction never started, and the couple asked Hamilton to return their deposit.

Mr Curmi recently gave Hamilton a seven-day deadline to repay their money, but they never met it and haven’t responded.

Another client said they received a receipt for their $10,000 deposit that showed Hamilton Property Group in a trust was holding the money.

Greg, a 46-year-old father-of-one, only discovered Hamilton might be holding onto his deposit at the meeting and said the ordeal had been a ‘horrible experience’.

‘I was shocked. That was a big mic drop moment,’ he told News of the meeting.

‘I was under the impression (Snowdon) had this money.’

He has shelled out nearly $11,000 towards his $400k dream home after also signing up to a land-and-build package through Hamilton last year, with Snowden as the builder, but more than a month after demanding his money back, he has still not received a response.

Hamilton denied holding his money, despite a receipt clearly showing his money had been ‘held by HPG’ since April, 2021.

Greg also questioned how Hamilton were able to sign up clients to Snowdon, despite the company being on the brink of collapse.

He is taking the matter to the Victorian Civil and Administrative Tribunal.

Raynan Abella, 30, and his wife also made an $11,000 deposit to Hamilton in June, last year, with Snowden contracted by the company to complete the build.

Their land remains empty, with the couple claiming Hamilton failed to mention the previous owner defaulted on the property and left them to pay the bills.

‘I was pretty much sent a recision notice, a legal notice saying we had to pay the fees of the previous person that ended up totalling $11,000,’ he said.

‘I said that was unfair. It should be on Hamilton to take ownership of this, this shouldn’t be on us.’

They ended up striking a deal with Hamilton to ‘cover’ their five per cent deposit if they paid $11,000 – which Mr Raynan is now demanding back after Snowdown’s collapse.

The pair have now been forced to spend $4,000 on legal action against Hamilton, but they have received no response from the company.

Another man named Shiju paid out $22,500 to Hamilton, who contracted Snowden to build his home in August last year.

A year later, the block of land sits empty – where his dream home is supposed to be.

‘The saddest part is we are not very wealthy. Everything is not easy, we lost one year’s rent. We wanted to move into our new home, interest rates are going up, build prices are going up,’ he said.

‘My wife was 70 per cent (keen on the idea of building a home), I was 30 per cent, (so) we had arguments. This is one of the saddest things I’ve gone through.’

Shane Deane, the liquidator in charge of Snowdon from Dye and Co Solvency, wrote to homeowners to reveal his suspicions of Hamilton.

‘It appeared that the practice was that deposits paid to introducers (Hamilton) were retained by the introducer and charged as a commission to the builder,’ he wrote in a letter.

‘Homeowners that paid a deposit that are not insured should seek their own legal advice in regard to the recoverability of the deposit.

‘If there’s a recoverable action, if it was a commercial arrangement, we’ll review the commerciality of it.’

However, the company denied they had the customers money, according to a report by News.

Many aren’t entitled to insurance payouts because work never started on the blocks and Snowdon had no domestic building insurance – which would see losses partially covered by the state insurer.

Liquidators believe Hamilton is holding onto the deposits and never referred them to Snowdon.

They are telling Aussies to chase up Haailton to get their money back, with several sending formal letters demanding refunds.

Daily Mail Australia has contacted Hamilton Property Group for a comment on the allegations.

Fifteen creditors took Snowden to court in April over the $2.5million they were owed in a bid to wind the company up on the grounds of insolvency.

But the three-month delay in reaching a decision had left many of the creditors facing financial ruin, the court heard.

Others said they had missed out on the previous government’s $15,000- $25,000 Homebuilder grant because work had not started in time to qualify.

‘We say that extreme delay has prejudiced supporting creditors,’ Danny Didone of Wyndham Law Offices told the court.

‘Snowdon should have been in a position many months ago to realise this company should have been wound up, not three months after this proceeding commenced.’

Three former Snowdon clients are owed more than $1million each, the court heard, while the Australian Tax Office is also demanding $4million in outstanding taxes.

The court was told 252 customers had paid a deposit but no work was ever carried out, while another 268 had construction underway at the time Snowdon crashed.

Mira Vose and her husband Anthony have been left with only the concrete slab and a wooden frame almost 18 months after work first began. 

Contractors are also among the creditors, including Michael Hassan’s MD Demolitions who is claiming $103,000 for work which has gone unpaid for six months.

‘There was no money coming into the account to feed the family or pay off the workers,’ he said.

‘It’s just sad, I’ve been to the office, I said ‘I’m desperate, I need the money’.

‘If I didn’t have financial support behind me, the bank would have taken my property by now.’

It had been the latest construction company to have folded during the pandemic with many struggling to find staff and facing problems sourcing and paying for materials due to a worldwide shortage.

Matthew Mackey, the Executive Director at engineering giant Arcadis, said the government need to get more involved or face a total collapse of the residential construction industry.

‘There has to be more collaboration at all levels to make sure it moves forward. We’re not going to be talking about builders going under but a complete lack of jobs,’ he told Daily Mail Australia.

Spiralling material costs, choked supply chains, fuel and vehicle price hikes, difficulty finding staff, and high wages were all combining to destroy the viability of businesses.

Staffing costs also soared with some in-demand tradies and specialists being headhunted by rivals for twice their previous salary.

The industry was also hit with delays caused by Covid shutdowns and then the La Nina deluges stopping work on sites across the eastern half of the country for weeks on end.

Now companies up and down the country are committed to fixed cost contracts which are losing them money hand over fist.

The worst affected are the bigger companies with sales teams who booked in record amounts of business at prices they can’t sustain, with profits smashed by the rising costs.

Smaller companies have also been bit but are better protected as they have committed to fewer jobs and are more likely to be able to cover their losses.

Others are renegotiating the cost of contracts before starting work to account for the change in the economy, and offering customers their deposit back if they choose not to proceed.

Some unscrupulous builders are starting work on projects at the fixed price, only to stop halfway through and hold families to ransom to complete the job.