A major Australian housebuilder who left thousands of customers struggling financially while waiting years for their homes to be completed is now facing a class action.
BGC Housing Group is one of Western Australia’s largest builders who sold 1000 homes in one month during Covid and were then unable to complete builds within contractual time frames leaving customers in financial and emotional distress.
Morgan Alteruthemeyer Legal Group commenced class action proceedings against three BGC Housing Group companies in the WA Supreme Court on Wednesday.
The class action was launched on behalf of thousands of people who entered into home building contracts with BGC Housing Group companies BGC Residential, J-Corp and Ventura Homes between January 2019 and September 2022.
The action alleges the companies breached Australian Consumer Law and their contractual obligations to thousands of BGC homeowners.
Morgan Alteruthemeyer Legal Group Building and Construction partner Spencer Lieberfreund said they expected between 5,000 and 7,000 BGC clients to get in on the action.
Mr Lieberfreund said customers had been waiting two to three years for their homes to be completed, forcing people to take second jobs or go FIFO just to make ends meet.
“In terms of financial stress it’s been great, unfortunately these people have been under a lot of financial stress,” he said.
“If you have rent and a mortgage and you didn’t expect to have both for that time, the savings are gone.
“Financially we are looking at things like loss of rent, additional interest payments, utility charges and land tax.
“In terms of the emotional experience, it has been absolutely heartbreaking to hear some of the stories from families who have been separated with a mum or dad having to leave.
“We’ve got people living in shacks, caravans, we’ve got one person living in a nine-foot caravan going from place to place trying to get their kids to school.
“It’s really, really heartbreaking and what it’s about is not knowing when their homes are going to be finished.”
Mr Lieberfreund said it was a situation where the builder had sold the houses for far more than they could and had ever sold in previous years.
“It was just never going to happen,” he said.
“They sold 1,000 homes in July 2020, more than any other builder in Australia, so there was no real way when they only sold around 2,000 homes last year.
“If you were to sell half of that in one month next year, you’d never make it through unless you suddenly increased your workforce significantly.
“We really feel for the people who have been affected here, these are real families and parents who are living this day in and day out, it’s a really difficult situation.”
A BGC spokesman said they were aware of a class action filed in the WA Supreme Court against its housing group entities.
“The BGC will vigorously defend the group’s actions, as we believe the basis of the case has potential widespread implications for all builders across the state and Australia,” the spokesman said.
“The company will not allow this to distract us from our continued focus on delivering all homes as quickly as current labor market constraints allow.”
In April 2023, BGC stopped taking orders for new homes and has since delivered more than 1,800 homes to customers.
“We are making good progress, with 90 per cent of homes having passed the foreclosure stage,” the spokesman said.
“Current completion rates are seeing us deliver 40-50 sets of keys per week.”
This week the company made the decision to sell its cement division comprising BGC Asphalt, BGC Cement, BGC Concrete, BGC Quarries, BGC Transport and the company’s Materials Technology Centre.
BGC chief executive Daniel Cooper said the sale process was part of the sale of the BGC group announced in 2018.
“Our focus will remain on managing safe workplaces and continuing to deliver for our customers,” he said.
“For those customers who are building with us, I want to assure you that we remain firmly focused on completing your home as quickly as possible.”
The Class Action is being funded by litigation funder Omni Bridgeway.
A representative plaintiff in the James Buck class action said he was hit hard by the delay in the construction of his home.
“BGC’s behavior towards me and my family while we were building our home left us devastated both financially and emotionally,” he said.
Facebook BGC Proposed Class Action Group and class action member Jess Spithoven said that now that legal action has begun, she hopes that all those homeowners affected by BGC’s actions will receive their full compensation under the law.