An Adelaide woman said she’s about to lose her dream home because she’s been slapped with a bill for an extra $144,000 on top of the original price to finish construction of the dwelling and she cannot afford to pay.
Fidelma McCorry signed up for a development constructed by Lofty Building Group in October 2021 with a handover expected in December 2022.
WATCH THE VIDEO ABOVE: Adelaide mum says her dream home is gone after she was hit with a big bill to finish its construction.
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But after almost two-and-a-half years, her home in Somerton Park is only half finished.
McCorry said she was recently sent a letter from the developer, saying a “sunset clause” in her contract expired in December 2023, so she would have to pay an additional $144,000 for the house to be finished, or be returned her deposit.
A sunset clause gives either party the right to terminate a contract if a development isn’t finished by a given date.
McCorry said two months before the clause expired, her builder told her there would be no changes to her contract.
“I feel like I’ve been taken advantage of honestly … I feel I’ve been let down,” she said.
“Myself and my three kids were really looking forward to moving into this new house, it’s a lovely spot not far from Somerton Park Beach.
“I’ll take my money back and that’s that dream gone … it’s devastating, it really is.”
Lofty Building Group told 7NEWS it was aware that a number of homeowners in the Somerton Park development had been issued with similar letters.
It said the cost increase was a result of the rising cost of doing business after the COVID-19 pandemic.
“Along with many other builders during and post-COVID, Lofty Building Group has recently faced challenges with the rising cost of interest rates, labour and building materials,” a Lofty Building Group spokesperson said.
“The impacted buyers have been advised by the developer and given the option of paying an additional amount to cover the increased cost of labour and building materials or having the contract terminated in line with the sunset clause without cost to the buyer and deposits returned.”
Building industry peak body Master Builders Australia said the average time to complete a town house was 14.9 months in November 2023.
McCorry said she did not accept the delays to the construction of her home were a result of the COVID-19 pandemic because, when she signed, the worst of it was over.
“I’m angry that this is allowed, it strikes me as sneaky if nothing else,” she said.
“This is way beyond delays. There are 17 houses in there, and they’re only shells.”
The South Australian Government announced a review into the building industry on Tuesday, which will consider whether consumers need greater protection from builders who may exploit sunset provisions in contracts.
Law Society of South Australia president Alex Lazarevich said while there were legitimate reasons why a project could be delayed, developers could use the sunset clause to their own advantage.
“The land goes up in value and so it’s in the financial interest of the developer to terminate the contract and sell to someone else at a higher price,” he said.
He said a sunset clause should include a requirement that the builder has used “reasonable endeavours” to finish the project.
McCorry said the cost of waiting for the home to be finished has been financially crushing, as she was already paying a mortgage on the property she was currently living in.