Deal struck to have unfinished Nicheliving homes completed

In a major deal struck on Friday (11 October) between the WA Government and troubled Perth builder Nicheliving, the builder will lose its building registration for 10 years and have its insurance liability – that could be as high as $40 million – waived.

Hundreds of customers with unfinished homes will now be able to access QBE home indemnity insurance worth up to $200,000, with other companies taking on the work.

Directors Ronnie Michel-Elhaj and Paul Bitdorf will be barred from seeking re-registration under any other name but are still entitled to set up other companies, such as real estate agencies and development businesses.

The pair are already registered as being at the helm of at least two new entities, including Australian Property Alliance and Urban Infill Development.

Nicheliving’s escape from financial penalty was addressed by Minister for Commerce, Sue Ellery.

“There’s no capacity to issue a fine,” she said.

“I appreciate there’ll be a sense of frustration ... but the key objective was to get the homes built and stop (Nicheliving) operating”.

Mr Michel-Elhaj has told media that while the company was carrying $44 million worth of debt, it was also backed by $100 million worth of property and contract assets. He said it had recently sold about $22 million in assets to keep builds going. Nicheliving’s outstanding tax bill is around $7 million.

On Thursday, the Western Australian Government responded sharply to claims by Mr Michel-Elhaj that “divine intervention” would ensure hundreds of unbuilt homes would be completed.

The notoriously media shy company director sought help from above to confront a crisis whereby more than 200 Nicheliving customers are waiting for stalled home builds to be completed. Some contracts date back to 2019.

“We've been very fortunate. I think I call it divine intervention, right? So I'm a Christian person, and I like to see that there is God assisting the company and our team,” he told WA media outlets.

WA Premier Roger Cook described the comments as an insult to customers seeking a more earthly response to their woes.

“We just want him to commit, not to his religion, but to his customers," he said.

“It’s an insult to suggest that somehow divine influence has got Nicheliving to the point they have reached.”

Hundreds of customers have endured years of financial strain and emotional stress.

Victims of Nicheliving, a group headed by disgruntled customers Kathy Ellis and Dr Richard Paul Hamilton, has expressed its dismay at new business entities being started by Mr Michel-Elhaj and fellow director Paul Bitdorf.

In correspondence with API Magazine, Ms Ellis and Mr Hamilton said their group, representing around 150 affected homeowners, on Thursday said she was very concerned about the proposals that were confirmed Friday.

“The State Government short-circuiting the case currently being heard in State Administrative Tribunal (SAT) and to instead create an arrangement whereby QBE Insurance will create a pool of funding, and a panel of builders, appointed by the State Government, would be done without consultation with homeowners.

“As part of this deal, Nicheliving drop their appeal, cease to operate as a construction firm, and be allowed to focus on more profitable areas of business without being held to account for their treatment of their customers and suppliers.”

Consumer rights undermined

Ms Ellis, who has been living in a camper van with her children, said they were particularly concerned about a government appointed panel allocating builders to projects and allowing little or no say for customers in the choice of builders.

“This does not respect our rights as consumers.

“We should be involved in any discussions and retain the right to decide who builds our home.

“The situation we have found ourselves in, and the uncertainty exacerbated by the SAT process and in particular the granting of a stay, means that we are all suffering extreme stress and anxiety.

“That anxiety will not be helped by major decisions about our lives being made in secret backroom deals, without transparency or accountability.”

The group also expressed alarm at the recent proliferation of new and resuscitated business entities with Mr Michel-Elhaj and Mr Bitdorf at the head.

One such venture to emerge is Australian Property Alliance, which last week was found to have a website promising a “stress-free experience” and “exceptional service”. It is led by Mr Michel-Elhaj and Mr Bitdorf and registered to Nicheliving’s Perth office on Newcastle Street.

Nicheliving had been fighting to retain its licence after the building industry watchdog, the Building Services Board, sought to have it removed months ago over the company’s growing debt and lengthy delays. The SAT prevented the company from being deregistered until Friday’s announcement.

The company’s problems started when it took on double their usual number of annual home sales after the launch of the federal and state government's home stimulus grants during the pandemic.