Thousands of homeowners are facing uncertainty following the collapse of Bathla Group, which entered voluntary administration this week, leaving an estimated 25,000 unfinished homes in limbo and putting at least 500 jobs at risk. The property developer reportedly owes approximately $3.6 billion to private credit firms and other creditors.
Accredited property inspector Zeher Khalil, known as the 'TikTok Inspector,' has advised homeowners affected by Bathla's administration to immediately document every detail of their property. This meticulous record-keeping is crucial for the success of any potential insurance claims.
"Document everything before anyone touches the site. Photograph the home as it stands, keep every document, and get an independent report on the stage of any completion and any defects," Khalil stated. "If it ends up as an insurance claim, that evidence is what the whole claim turns on."
Khalil, who has a decade of construction experience, also cautioned that vigilance is necessary for homeowners planning to build with other developers, citing a broader industry pattern of "corner-cutting."
"Check the builder's licence before you sign, not after. Don't hand over a cent until you're holding the certificate of insurance – that certificate is what stands between you and losing everything if the builder becomes insolvent," Khalil advised. He noted that in New South Wales, builders are legally required to have Home Building Compensation cover for residential work exceeding $20,000 before accepting any deposit.
Homeowners are encouraged to obtain independent inspections at every stage of construction, including slab, frame, lock-up, and handover, to identify and rectify issues while they are still manageable. Khalil emphasized the importance of choosing inspectors carefully, as building inspection is largely unregulated in New South Wales and Victoria, with Queensland being the only state that licenses inspectors.
While Khalil has not personally inspected any Bathla properties, he expressed that the reported issues of building defects and shoddy workmanship are consistent with patterns he has observed across the industry. "Supervision is usually the thing that suffers when finances are stretched. Trades don't get paid, so they don't come back and homes get pushed through to handover with work incomplete or rushed," he explained. He added that it is rare to inspect a new build and find no defects.
Bathla's managing director, Bhart Bhushan, attributed the company's downfall to a "perfect storm" of softening sales, impacts from tax changes, and escalating construction costs. "These changes in market conditions have had flow-on effects to lending markets, putting further pressure on the business," Bhushan said in a statement.
A friend of Bhushan's suggested that government policies, including changes to capital gains tax and negative gearing, had placed immense pressure on the business. Bathla Group's website indicates a pipeline of $15 billion worth of affordable housing projects, with the company developing 22,000 apartment dwellings and an additional 3,500 homes.
The Bathla Group's collapse follows a trend of construction and development companies entering administration or liquidation in recent years, driven by rising costs and significant labor shortages. Teneo, the voluntary administrator for Bathla Group, is currently in discussions with lenders to stabilize the company. Teneo administrator Stephen Longley stated that the priority is to secure funding to protect the interests of employees, customers, and suppliers.
For homeowners in New South Wales, deposits are protected by the Home Building Compensation Fund (HBCF) insurance if the builder becomes insolvent. Affected individuals are advised to contact Building Commission NSW or Bathla's voluntary administrators with concerns. If a contract is valued over $20,000 and home building compensation cover is in place, owners may have protections. Work may continue during the voluntary administration period, and homeowners should maintain detailed records. If a different builder is needed to complete the work, it will likely incur greater costs, and homeowners are cautioned against assuming ownership of materials on site without checking the Personal Property Securities Register (PPSR).