A Victorian woman’s dream home has turned into a ‘nightmare’ after a bombshell letter from developers demanded an extra $120,000 to even build it.
Jillian Edelsten’s dream of finally owning a home turned into an ‘absolute nightmare’ after the developer told her the house would only be built if she was willing to shell out an extra $120,000 after suffering two years of delay.
The nurse had spent five years saving for a security deposit while renting and wondered if she would ever be able to afford her own home.
But when the federal government’s HomeBuilder grant worth $25,000 was introduced during the pandemic, Ms. Edelsten knew it was her best chance to catch up with her homeowner friends, combining it with the $20,000 grant for the first owners.
Along with 20 other people, she signed a $270,000 house and land package at the Provenance estate in Bendigo in regional Victoria.
She made two deposits — $7,000 for the land — and an additional $8,750 for the construction in May 2020.
The homes were due to be completed in May last year, Ms Edelsten said, but instead she was left in “limbo” with no work starting on her home.
“I was really excited to be a first time owner and finally doing it on my own and now I feel absolutely defeated and just devastated,” she told news.com.au.
“I just feel like there’s nowhere to go…and I feel like it’s absolutely unfair and the developer doesn’t care.”
The 45-year-old said there were initial problems with putting the land in the owner’s name, which only happened in September last year, pushing him back well beyond the initial completion date of May 2021 for the houses.
Then, despite being told construction would start in December last year and then in January, nothing happened, Ms Edelsten said, with owners growing increasingly desperate to find out why.
Finally, they were told that the builders were having trouble obtaining insurance to cover the project and were being audited for insurance.
But she said she was still assured construction would be completed by September until a bombshell letter dropped into her inbox in May.
“It went on for weeks and weeks and we said we just needed an answer, this will go on forever… and finally we heard nothing and all of a sudden we got a letter from developer,” she said.
Ms Edelsten was stunned by the letter from developer Huntly Property, delivered through their solicitors.
He said Huntly Property was informed on May 24 that Vita contract builders would not be able to proceed with construction and that several local builders were approached about the project.
The letter revealed that the cheapest quote would mean Ms Eldesten would have to come up with an additional $120,000 if she wanted her townhouse built.
Alternatively, she had the option of reselling the land to Huntly Property or selling it on the open market.
But there were conditions attached to selling on the open market. She would need the consent of the developer for this option and the sale had to be done through her property manager.
“I was just shocked. I couldn’t believe it. I thought it was outrageous the options they were giving us,” Ms Edelsten said.
“They are not viable – none of these options will work. I can’t afford another $120,000 for construction, the bank won’t give me that money, so my only option is to resell the land.
Ms Edelsten said she paid $90,000 for the land and Huntly was offering $109,000 to buy it back, but she wasn’t sure that represented market value.
She said a Zoom meeting scheduled four days after the letter was sent to discuss the situation was later canceled, just 25 minutes before it was scheduled.
“It doesn’t even seem like a fair deal, it’s really unfair,” she claimed.
“Not once did they say we were really sorry this happened to you. They never apologized and gave us no communication the whole time and were not (be) transparent at all, then we just get a letter saying, “Too bad, we can’t do the build anymore,” and you only had those three options.
The Victorian nurse said having only a few days to digest the information and then being asked to make a decision was also “wacky”.
Ms Edelsten was forced to move back in with her parents during the ordeal and said given the instability in the construction industry it was another reason to move away from her dream home.
“I have no faith anymore. Mentally I’m so drained and I’m done with this. Two years of my life have been put on hold while I wait and wait and wait. They obviously knew about it a while ago. six months when the builders were passing an insurance audit and should have said something,” she said.
“I feel like I missed the boat with the house making more money and now that the wood and labor costs have gone up so much, everything is so much more expensive two years later .
“I feel like right now I can’t even afford to enter the housing market and I will be renting for the rest of my life.”
Ms Edelsten also received a letter from Vita builders last week.
“Unfortunately, we are not confident that we can obtain the necessary domestic building insurance to proceed with the proposed construction of the townhouse as we cannot meet the financial and technical requirements of the insurer,” it read.
“Our position is further complicated by the stress placed on players in the construction industry associated with rising costs and shortages of labor and materials.”
The letter added that despite costing $1,240, including engineering fees, it would “absorb” the expense and the buyer’s full deposit of $8,750 would be returned.
Ms. Edelsten wants to see developers do more.
“I would like a better offer from the developer and compensation for the loss of that $25,000 HomeBuilder grant because we did nothing wrong here,” she said.
“It just doesn’t seem fair that we haven’t done anything wrong and now we’re actually going to be lost.
“I feel (I’m) in a worse position now than when I started. I feel like I missed the boat…and now I don’t know what to do.
News.com.au contacted Huntly Property’s solicitor and property manager but received no response.
In a statement to Nine NewsHuntly’s attorneys said, “Our client and our office have been working (urgently) to get further updates from Vita and his attorney, and have also asked Vita to provide clarification directly to property owners. batches concerning the reimbursement of deposits. and timing of such payments, as well as clarification of Vita’s intentions with respect to all lots where construction has actually commenced.
“Our client intends to continue to assist and work with lot owners to achieve the best possible outcome given the circumstances.”
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