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‘Unfairly pilloried’: Troubled builder breaks silence after surge in complaints

James Stroud, who founded the franchised business 11 years ago, said the company was working “hand in glove” to help customers despite a surge in building costs due to Covid-19.“It’s unfeasible for anyone to build a home for the same price as three years ago,” said Mr Stroud in response to written questions from The Courier-Mail.“We offered to build homes that fit within their budget, or we’ve given them the option not to proceed with the build and let them out of the contract. We’re not legally obligated to do that – but we think it’s the fair thing to do.” He said Stroud along with other builders had faced astronomical price rises during the pandemic. “It used to cost us 90 cents to lay a brick, it now costs $3,” he said. “Reinforced steel has gone up 43 per cent and timber has gone up 39 per cent.“We are being unfairly pilloried. We’re trying to build houses and keep people employed. We need more action from the building regulators.”Mr Stroud said his company is “solvent and in a very strong position financially.” “We’ve been profitable for over a decade, and that will continue long into the future,” he said.Mr Stroud’s responses to questions from The Courier-Mail including why the company is threatening to sue customers for leaving negative reviews and allegations deposits are being retained.Q&A1. The Courier-Mail has been contacted by several of your customers claiming you are holding their deposits after terminating their contracts. On what legal basis are you keeping their money?This claim is categorically false. It’s not what we do and it’s important that this assertion is corrected with the facts. There’s a small minority of customers that we began the contract process of building a home with, anywhere between six-months and three-years ago.It’s taken that long for them to gain loan approval from their banks, for their block of land to register or for them to decide to go ahead with the build. In that time, we all know that the entire building industry in Australia has been affected by skyrocketing costs, supply chain, and labour issues – and we’re not immune to that. The contracts are not fixed price at all. We need to be able to negotiate a fair and reasonable solution and the overwhelming majority of our customers are fair and reasonable and understand this. Customers receive value for money with their deposits. The deposits are used in a substantial 104-step process from the time a customer confirms they want to build a house to obtaining council approval. This is a costly exercise that involves approximately 64 days from our end and includes everything from obtaining engineering reports to surveys, long service levies and insurance. If the customer doesn’t want to proceed with us, that’s okay – we’ll give them all the documentation to use with another builder, and that builder should take that cost off their price to build the home. 2. It has been suggested that you are looking for any excuse to terminate contracts and retain deposit monies. Is this correct?Again, this is simply untrue. 3. Stroud is blaming unprecedented increases in building material to justify the price increases despite the fact most customers have fixed-price contracts. How can you justify the demands for money? Answered in first response4. You have asked one customer to write a positive review of their home in return for considering dropping a claim for delay damages? Is this appropriate? Stroud Homes is built on treating people fairly. Some people haven’t paid their bills and we’re trying to find a solution that works for both parties. Sometimes it is more the bank at fault for payment delay, so we can sometimes make an offer to remove or reduce these charges as part of other end-of-build negotiations. We’ve experienced less than a handful of opportunists unfairly threatening to leave reviews that are factually incorrect. 3,000 happy customers over the past 11-years will speak to the high quality of our work, ethics, and good standing in the community. 5. Stroud customers say they are being given demands of large sums of money with no breakdown of the costs. Why are no cost breakdowns given? The costing reports are highly technical and more than 30 pages long and contain confidential trading information. 99 per cent of customers don’t want to know about it but we’re more than happy to go through the cost breakdown brick-by-brick with every customer. To give you some perspectives of the astronomical price rises during the pandemic: • It used to cost us 90 cents to lay a brick, it now costs $3. • Reinforced steel has gone up 43% • Timber has gone up 39% We are being unfairly pilloried. We’re trying to build houses and keep people employed. We need more action from the building regulators. 6. Is the company solvent?• Yes, we are solvent and in a very strong position financially. We’ve been successful and profitable for over a decade, and that will continue long into the future. We’ve worked hard to build the company from the ground up to now have over 40 successful franchises across Australia.

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