Family living ‘worst nightmare’ after purchasing northern suburbs home filled with defects
Khorshed Alam, an owner-builder in Adelaide’s northern suburbs, has been fined $75,000 for operating without a license and indemnity insurance after selling two $800,000 homes riddled with defects. The victims, including the Sharma family, discovered structural issues and a lack of occupancy certificates after investing their life savings into properties described as “masterfully constructed.”
Why were the Adelaide homes declared unsafe?
The Sharma family discovered multiple failures after purchasing one of the $800,000 properties. A building inspection revealed holes in walls and ceiling plastering, plumbing and drainage problems, and a failure to weatherproof the house.
Upon moving in, a council representative informed the family they could not live in the home because it lacked an occupancy certificate. The council initially revoked the certificates for both new builds, citing “unsatisfactory and outstanding building work.”
While the certificates were eventually reinstated, the council warned residents to seek legal advice. They expressed ongoing concerns regarding the overall standard and appearance of the development.
How did the owner-builder bypass regulations?
Khorshed Alam, who also works as a home loan advisor with a credit union, acted as an owner-builder. Under the law, owner-builders cannot construct multiple properties as a business.
Will Frogley, chief executive of Master Builders SA, stated that the current legislation is open to abuse. He noted that some individuals pose as owner-builders to avoid the strict requirements of being a licensed builder.
To close this gap, Master Builders has urged the state government to introduce a permit system. Frogley argued that the state lags behind other jurisdictions in consumer protection.
What are the legal consequences for Khorshed Alam?
Consumer and Business Affairs Minister Michael Brown issued a public warning notice against eight traders, including Mr. Alam. The minister stated that Alam demonstrated a “tendency to disregard important legal obligations.”
Alam was fined $75,000 for three counts of operating without a license and three counts of performing work without building indemnity insurance. These charges covered the two properties in the northern suburbs and a third separate project.
Mr. Alam’s lawyer has stated that his client is in the process of obtaining legal advice and has been in discussions with Consumer and Business Services.
What happens next for the homeowners?
Consumer and Business Services Commissioner Brett Humphrey confirmed that a watchdog investigation is currently underway. This probe focuses on potential breaches of Australian consumer law.
The investigation is also expanding to include other tradespeople. Specifically, authorities are reviewing the suitability of the building supervisor’s license.
If the offences are proven in court, the homeowners may have an opportunity to seek compensation. However, the lack of indemnity insurance remains a significant hurdle for those seeking to fix the defects.
Frequently Asked Questions
What specific defects were found in the homes?
Inspections revealed holes in walls and ceiling plastering, failure to weatherproof the house, and issues with plumbing and drainage.
How much was the builder fined?
Khorshed Alam was fined $75,000 for operating without a license and without building indemnity insurance.
Why were the homeowners unable to cancel the purchase?
The Sharma family reported feeling “helpless” because they had already given notice on their rental property and feared losing their $50,000 deposit just three days before settlement.
Do you believe a permit system for owner-builders would effectively prevent these types of construction failures?