Former clients question collapsed builder’s links to property investment advisory firm
March 11, 20172:54am
An unfinished Guymer Lynnch home.
THE sole director of a builder that collapsed last month leaving families across Victoria with half-finished homes was also the director of a property investment firm which suggested clients build with the now-defunct company.
Guymer Lynnch Pty Ltd, founded by builder Shane Guymer, went into liquidation last month with nearly $1.8 million in debts to more than 80 creditors, amid claims of shoddy work, long build times and unpaid contractors.
An estimated 50 families in suburbs across Melbourne including Croydon, Bundoora, Thornbury, Bulleen, Box Hill, Cranbourne and Point Cook have been affected.
Liquidator Greg Andrews of GS Andrews Advisory informed creditors in a letter this week that the company had “insufficient assets” to meet its debts and “accordingly, there is no likelihood” of unsecured creditors being paid.
Mr Guymer is also the sole director of ECG Wealth Pty Ltd, which describes itself as specialising in “sourcing investment property opportunities for first-time investors right through to seasoned investors”.
“With over 10 years in business we have helped over 3000 people purchase property and a majority have gone on to purchase many more with us,” a company business profile reads.
“We provide a detailed Property Investment Analysis (PIA) of every investment opportunity on offer which shows a full breakdown of costs, rent, tax benefits, holding costs, loan fees, etc. to show you the investment cashflow which allows you to make an informed decision on whether the investment is right for you before going ahead.”
In the blurb, the company says it cuts out costs by sourcing “all properties direct from the builder/developer, cutting out the real estate agent’s fees and large marketing costs”, can “source the right builder for the task at hand” and has “strong relationships with builders and developers”.
“What does this mean for our clients?” it reads. “[Ultimately] a better deal for you.”
Clients of ECG Wealth claim they were not informed of the relationship between the two companies. “I’m just highly disappointed that we weren’t told Shane, the builder, was also the [sole director] of ECG,” said Melbourne mum-to-be Melissa, who asked for her last name to be withheld.
The 32-year-old said she and her husband were referred to ECG Wealth in 2015 and signed their contracts in August. The couple purchased a house-and-land package in Cranbourne East for $396,000, with the house itself costing $223,000.
“They basically said, ‘We’ve got a great builder, their name is Guymer Lynnch, they’ve completed quite a few of our contracts’, but we weren’t aware that there was anyone else we could choose from,” she said.
“They told us we’d have something by the end of the year, so we’d be able to have something rented out by April or May 2016.
“We kept pushing for it to hurry up and get started — nothing. They were saying they’re having issues with the council, having issues with this, with that, so there was always an excuse.
“No work actually got started until April or May, in July the slab went down, and they stopped working at the lockup stage in August last year. There’s quite a few defects with the building, no flood inspection has been done, we got a framing inspection report that failed, there are more structural items that need to be fixed and no work can be done until they are.”
Melissa said they had received quotes to finish the house for around $93,000, but were still waiting for an insurance claim to find another builder.
“We’ve been paying a mortgage, plus our own home mortgage, since 2015,” she said. “I’m over crying. I cried and cried and cried, but that wasn’t getting me anywhere. I’m just over it. I just want to hurry up and have it finished and get rid of the lot of them.”
Linemarker Sean O’Toole, 55, signed a $400,000 contract with Guymer Lynnch in 2015 after coming through ECG Wealth. He said he was never told there was a relationship between the two companies.
“They never mentioned it,” he said. “I didn’t really look into the builder, [the ECG employee] told me everything was guaranteed and they had a range of builders and they would pick the best one.”
Mr O’Toole estimated it would cost upwards of $60,000 to finish his home in Officer. “It’s at the fixing stage, it needs everything done inside and outside,” he said. “I’ve got no fittings, no light switches, no tiles, all I’ve got is the bench and sink.”
Ben Marshan, head of policy at the Financial Planning Association, said such a situation could be a conflict of interest. “A professional financial planner would have to fully disclose their conflict of interest to the client and make sure the client was comfortable before providing them with advice,” he said.
Under new legislation passed by the federal parliament last month, which doesn’t come into effect until 1 January 2019, more stringent education and training requirements will be placed on financial advisers.
But a former employee of ECG Wealth has clarified that the company did nothing wrong, saying Guymer Lynnch was “not the only builder we used” and that every project was quoted out to multiple builders.
He said the firm then picked the best price for the client, rather than offering up a selection to choose from. “If you’re looking to do something and given 13 different options, you’ll get bamboozled,” he said.
“It’s very difficult for them to make a decision, they end up analysing it until it’s dead. We do all of the work, all of the negotiation, and come up with the best deal for clients, [whether] that’s Guymer Lynnch, Impact Homes, Creation Homes or half a dozen [other builders].
“That’s what they paid us for. It was our job to get the client the best possible deal, if that meant Guymer Lynnch got the deal, they got the deal. I’m not going to sit here and say I’ve lost sleep over that. I personally acted in every single client’s best interest in every transaction that came through that company.”
The former employee couldn’t say how often clients were referred to Guymer Lynnch, but said Mr Guymer had “no influence whatsoever in any decisions made by myself or anyone employed at ECG”.
“He had no influence on day-to-day sales, nothing to do with the running of the business,” he said. “[We] have nothing to do with him, always been completely separate from him. For there to be any accusation that anything under-the-table or untoward has been done to these people has really p***** me off.
“Unfortunately there are about half a dozen ECG Wealth clients that went with Guymer Lynnch at the time when Guymer Lynnch went under.
“I’m talking to some clients. I’ve actually helped them find another builder so they can move forward. Some clients have even finished with other builders — one with Watersun Homes, and look what happened to them.”
Guymer Lynnch is the latest in a string of construction-related insolvencies in the past month, along with Watersun Homes, Lazaway Pools & Spas and Sulja Holdings.
Attempts to contact Mr Guymer by phone and email have been unsuccessful. Websites for Guymer Lynnch and ECG Wealth are no longer accessible.
In a statement, a spokesman for the Victorian Building Authority said: “Shane Guymer is the subject of an ongoing investigation, which involves a number of complaints lodged with the VBA. As it is an ongoing investigation, we are unable to provide any further comment.”