NSW Fair Trading Minister, Linda Burney, today urged clients of Beechwood Homes not to panic following news that the company had gone into voluntary administration.

Ms Burney stressed that voluntary administration is not the same thing as bankruptcy or insolvency.

It is understood around 300 people in Sydney, the Hunter and the South Coast are affected.

“Fair Trading became aware that Beechwood Homes may be going under voluntary administration late yesterday afternoon and immediately began making enquiries about the matter,” Ms Burney said. 

“Homeowners and tradespeople who work for Beechwood Homes should not act hastily and should not terminate their contracts with Beechwood Homes. 

“The administrators, Armstrong Wiley, are looking to engage other builders to complete current projects under contract with Beechwood Homes franchises.”

Ms Burney said if the efforts of the administrators are not successful, NSW has an effective consumer protection framework which delivers protection for consumers who are faced with the collapse of their builder’s company. 

“Home warranty insurance protects consumers up to a maximum of $300,000 for incomplete work and covers them for a loss of deposit if work has not yet commenced. 

“Consumers would have been given a home warranty insurance certificate by Beechwood shortly after they entered into a contract with them.”

Ms Burney said the administrator will know in two to three weeks time whether they have been successful in arranging for another builder to complete the project or whether deposits can be returned where work has not commenced.

“If they can’t, consumers will be able to lodge a home warranty insurance claim.

“Fair Trading is working with the administrator and home warranty insurer to bring about a quick resolution for all consumers and will contact them with advice as soon as further information comes to hand from the administrator.”

They are encouraged to contact Fair Trading on 13 32 20 for advice on their situation.

Further information on the appointment of voluntary administrators can be found on the Deloitte website.

For further general information on the receivership process, you can refer to www.asic.gov.au/insolvencyinfosheets.

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