Franchise builder rues client debt

For the second time in four years, a franchisee of Signature Homes in Dunedin has been placed in voluntary liquidation.

Dunedin-based Murwil Construction was placed in liquidation by managing director Murray Wilson on Friday.

He yesterday said he took the action because of an outstanding $160,000 debt owed by a client, and warned his liquidation "could easily see" other companies in the industry placed in receivership or liquidation.

"This is the impact of having a client breach a scheduled payment contract.

"It was a significant hit on cash flow," Mr Wilson said.

"I'm particularly gutted to have what appears to be a client encouraging us to build when they have known they couldn't make the payments."

Mr Wilson said Murwil had issued a "breach of contract notice" to the client and was seeking to have caveats placed on the property, which is 80%-90% complete.

Ten uncompleted houses in Otago and Southland would be finished for Signature Homes clients under guarantee.

The 10 homes were about 90% complete and clients would make their final payments directly to the subcontractors involved, Mr Wilson said.

Other clients would be covered by Signature Homes' completion guarantee, he said.

Murwil Construction has been the Signature franchise holder for the past two years.

Brycar Holdings Ltd was the unrelated franchise holder four years ago.

In April 2005, Mosgiel builder Peter Abernethy, who owned Brycar Holdings and had the Signature Homes Otago-Southland franchise for the previous four years, placed Brycar in liquidation.

Most of the 12 Otago and Southland property owners left out of pocket after the Brycar collapse had their building contracts completed by the Auckland-based parent, Signature Homes Ltd.

Chief executive of the parent Signature company, Phillip Howe, could not be contacted yesterday.