Main Contractors going broke

Any other sub contractors been caught out, when a main contractor goes belly up. What is the latest on changing the law in an effort to protect sub contractors

brighteyes16, Jul 1, 5:33 pm

How can they be protected? What ideas do you have?

survivalkiwi, Jul 1, 6:36 pm

Im a subbie and it pisses me off when the bigboys go bellyup. you can bet they've done ok one way or another and will still have their ducks in a row somewhere

dannyboy24, Jul 1, 6:53 pm

Mrs B here. Happened to hubby twice. Twice we had to put a hefty dose on our mortgage to pay our bills, while the instigator (buiding company) directors claimed "directors fees" and drove around in late model vehicles. Both times they went on to open new companies, no punishment whatsoever. Makes me feel sick.

brightlights60, Jul 1, 7:18 pm

VW Toureg's?

dannyboy24, Jul 1, 7:42 pm


brightlights60, Jul 1, 7:43 pm

Their late model vehicles? VW Touregs?

dannyboy24, Jul 1, 7:54 pm

at least spell them correctly.

ryanm2, Jul 1, 7:58 pm

Oh great another retired school teacher on the TMMB.

survivalkiwi, Jul 1, 8:01 pm


dannyboy24, Jul 1, 8:12 pm

I believe their called VW ToeRags.

drcjp, Jul 1, 9:05 pm

Maybe something like what I believe they have in Australia where the main contractor is not paid directly, but payment is held in a trust.

brighteyes16, Jul 1, 9:19 pm

Yes it's happened to us twice too, we put ours n mortgage and both times it was building companies, the law needs to be changed so they are never allowed to run/ own a business again, sick of them ripping people off, spending up large, hiding money, then going bust then doing it all over again.

pooks3, Jul 1, 9:28 pm

Even that dosen't work we got stung by a guy who was banned from being a director of a company for 5 years but still was only 2 years later. Ministry looked into it but as far as I know he claimed he wasn't the director and got away with it.

helsbels2, Jul 1, 10:08 pm

They should be made to sell everything to pay people, and if they do it a second time, it should be jail time too

pooks3, Jul 1, 10:59 pm

That would work if they have priced the job correctly. Unfortunatly most contracters go broke from underpricing jobs.

survivalkiwi, Jul 2, 6:22 am

I have known a few guys over the years who have gone broke. They did loose everything. Including house ,cars and in two cases wife and kids.
It is only seems to be the big ones such as Mainzeal who get away with it. (shiny shoe directers).
Also one I know went tits up from a client not paying. Unfortunatly once a company goes broke there it no money to pay people to chase those clients. So they are the winner.
The whole system needs an overhall but what would really work?

survivalkiwi, Jul 2, 6:29 am

ts hard to protect the subbies, at least we should be able to protect those that pay deposits for houses etc, that money should be held in trust until completion. Building companies would be able to borrow against said money when building.

ryanm2, Jul 2, 7:25 am

I am not involved in the building trade , but I have no problem with these directors starting up "a new company" ***As long as they (and will probably need to sell their assets/remortgage etc, which let's face it ain't going to happen because they never risk themselves) pay their previous debts off first !
(Yes, I can hear the laughter now)
Would it be fair to say most of these people generally stay in the same industry when they "re-start" ? how do they look their past creditor's in the eye when they see them ? They don't even have the grace to disappear so as not to keep "reminding" those with a deserved grudge against them.

gman35, Jul 2, 10:33 am

We almost lost our House through a company that went belly up. They owed us heaps on goods and services that we had provided luckily some of our friends borrowed money to help us out.

gymee1, Jul 2, 12:49 pm

Ah yes but can you pronounce it correctly?

janbodean, Jul 2, 1:12 pm

Maybe the subbies need to drawup contracts so they are paid more frequently so they dont loose so much if the main contractor goes broke. Thats if there is no change to the law.

cassina1, Jul 2, 2:19 pm

Its pronounced 'turek' isn't it?

ryanm2, Jul 2, 3:57 pm

You mean you don't know? Pfffft . "Ape"

dannyboy24, Jul 2, 5:30 pm

Contracts are not worth the paper they are written on. Unless you are prepared to wait for months and months for the system to be ready to act for you.

survivalkiwi, Jul 2, 7:57 pm

Yeah, im pretty shamed right now. I did learn what about Saharan tribal culture though.

ryanm2, Jul 2, 8:06 pm

Main contractors are ponzi operators pricing jobs with no margin to gain work paying out less than they get in at any one time while claiming a paycheck the math doesn't work does it.

denlah, Jul 2, 8:37 pm

You let your friends do that?

survivalkiwi, Jul 2, 8:45 pm

The only thing that has changed is that performance bonds need to be held in a trust account now and not used by the main contractor as cashflow.
The Construction Contracts Act 2002 was supposed to help with the other problems, but you can't get blood out of a stone.

tezw1, Jul 2, 8:53 pm

Too right,the amount of dicks in the last 4 yrs that say,'im waiting on blah blah to pay me', then i'll pay you."These idiots are not in any position to run companies,as the are always cash broke waiting on a payment.As for contracts,they don't work.These guys run a mile,we get no work and the job is given to someone less 'awkward'.Its complte shit honestly.We never employed anyone unless we had the means to pay them.I dont go to the supermarket and say '
bob owes me $$so when he pays me i'll come back' My accountant told us to stop bankrolling these pricks and we did.Sadly work is now slow.

kletis1, Jul 3, 6:36 am

Or you could just withdraw your labour the instant its not complied with and go and work somewhere else keeping your losses to a minimum.

cassina1, Jul 3, 12:14 pm

Those that enter into contracts where they only get paid when the main contractor says so only have themselves to blame for taking such a risk if the main contractor goes broke. You do have the alternative of working as an employee if contracting is no longer worth the risk I guess.

cassina1, Jul 3, 12:22 pm

I did that years ago with a housing company. The liquidater then demanded that all payments that were paid out on the past six months had to be paid back. Funny thing was that the large corporations (telecom and toyota NZ) did not have to pay money back. I did not end up paying money back as I went to the liquidater and handed him my house and car keys and told him that was all I owned. He spent about an hour with me calming me down and sent me on my way. Other crediters paid money back to the liquidater.

survivalkiwi, Jul 3, 6:51 pm

Cassina1, your suggestions are simplistic and almost suggest that you think subbies are stupid. Everyone expects to be paid and most are until the payments just stop. By then its too late to do anything but pray.

carter19, Jul 3, 7:03 pm

Also are you aware that most building businesses, domestic and commercial only employ contractors? There is no choice for most. even apprentices are contractors.

carter19, Jul 3, 7:12 pm

well said

dannyboy24, Jul 3, 7:19 pm

My main contractor got paid. It was a housing corp contract and housing corp have confirmed payment. Don't be fooled by thinking payment is guaranteed on government contracts there is no guarantee the money will be passed on to sub contractors.

brighteyes16, Mar 4, 2:26 am

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