My husband and I built with A1 Homes and believed we had a 5 year workmanship guarantee and 10 year structural (well that is what is on the section saying what you get included in the cost back in 2005 - final payment for completion was 2006) But this week have found out they put nails in our hot water cylinder pipes (5 in total) when attaching the cupboards shelves (should have been the stud – missed by about 15cms) Anyhow this happened at the end of contract so 2006 just prior to final payment and now (this week) they have finally rusted through and flooded the house / carpet / walls – So I rang A1 Homes and I was told by Ross Thomas (owner) that this was the franchises responsibility (since liquidated) when I said how could that be, as everything said A1 homes and was on the web site / brochures and they were a licensed franchise selling on behalf of A1 Homes? He told me to get a lawyer - which seems crazy... Am I missing something here? Is this correct? How does this work?
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Simoneg, welcome to the forums.
I've quoted here the promotion of the A1 guarantee from their website:
A1 Homefirst Guarantees
At A1 Homes we've always been proud of our reputation. To endorse our commitment to customer satisfaction, we are now offering our HomeFirst Guarantees on all A1 houses.
Homefirst 7 Year New Home Guarantee
Today, people building new homes need to know they are building with people they can trust. Your builder's name and reputation may speak for itself but, unfortunately, in today’s industry it is no longer enough. Sometimes things can and do go wrong.
At A1 Homes, we believe everyone who chooses to build a new home in New Zealand should have the right to be fully protected should something go wrong. This is why we have chosen to offer a “7 Year Homefirst Guarantee” with all new homes built by an A1 Homes Franchisee.
Whether you choose a Full Contract or a Transportable dwelling, the Guarantee provides for the loss of deposit or non-completion during the construction phase. It also provides for major structural defects in regards to both materials and workmanship for 7 years, from the date of possession, including full defects for the first 2 years. This Homefirst Guarantee is underwritten by a totally independent third party.
Further benefit to the new home owner is that this guarantee can be transferred once, should the house be sold. The Guarantee stays with the house and not the original owner; this in itself adds value to the new home.
Homefirst Kitset Guarantee
The Homefirst Kitset Guarantee ensures that from the time you pay your initial deposit with an A1 Homes Franchisee all funds are 100% safe. Irrespective of what happens you are guaranteed delivery of your Kitset package, from the plans to the last materials required to complete your new home. As with the Homefirst New Home Guarantee, we believe all potential new home buyers should have the best protection available when it comes to the security of their investment. This provides total peace of mind that your money is safe.
This guarantee offer is subject to application and written acceptance to you by the underwriter.
"Rest assured you're in safe hands!"
Ross & Lea Thomas
A1 Homes NZ Ltd
Unfortunately this is often not something covered by house & contents insurance, as there is commonly a clause that excludes damage caused directly or indirectly by faulty workmanship.
Your guarantee wording may well be different if it was from 2005, but from the looks of this promotion the guarantee appears to be provided by the Franchisor (the system owner) rather than the franchisee (the individual business operator). Work through the specific wording of the guarantee with a fine tooth comb, and if you feel you still have a case then consulting your lawyer may still be the best option.
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Ross Thomas is the Master Franchisor. He sells individual territories to Business people who have their own limited liability company (franchisee).
The Franchisee then pays the Franchisor a portion of their sales as a Royalty fee. the Franchisee then has the right to use the A1 name, plans etc.
It is the Franchisee who has been liquidated. It is not Ross Thomas' responsibility if the Limited Liabililty Franchisee's company has been liquidated. It is a totally different company to his own. (although it is his problem because he has to deal with problems such as yours and a "bad name" for his company)
It is the same as if you built with an "one man band" builder who then goes into liquidation.
The Franchisees operate under the A1 banner but they are individual businesses. It is the same as GJ Gardner, Jennian, Peter Ray Homes, and others which I can't think of right now.
Ross Thomas personally paid out 100s of 1000s of dollars to finish homes in the Nelson region when the Franchisee went out of business. It was not his responsibility to do so, but he did anyway. But he can't be held responsible for everything a liquidated franchisee did while they were in business.
Pay to get it fixed and count yourself lucky you have a house to live in that you have paid for. Plenty of contractors are out of pocket many 100,000's of dollars. If you are in the Nelson region the house you are living in has probably had work done on it that Griffiths Construction has not paid for - even though you did pay for it.
I believe the Guarantee off the website is a new Guarantee and was brought in when franchisees went into liquidation. It is between the individual franchisee and yourself - nothing to do with the Master Franchisor.
Ross Thomas is passionate about his business and the A1 business model is good. They have great plans and are a good quality product. Its unfortunate that a couple of individuals who can't run a business have sullied the A1 name.
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Hmmm, interesting replies - I guess it comes down to doing the right thing... I know that when we verbally queried the fact this wasnt a "master builder" guarantee and we did ask what happens if you went into liquidation - I was assured that A1 Homes had been round a long time and would always cover us and told that a master builders guarantee was not as good as a A1 guarantee... so I guess I am disapointed to find out this is NOT the case... Personally I believe every person signing with a franchise model should query this prior to signing up (& unlike me - get it in writing the responses not only from the franchisee but the owner!) - at least then you would know what you were actually getting prior to payment. I dont have any sympathy by the way for someone buying a going concern without researching what they were buying - so sorry cant be sympathetic to Ross Thomas.
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You first need to find out if in fact you have the guarantee.
The franchise would have had to fill out an aplication and send a cheque for the premium. You need to find out who was underwriting the guarantee. Who is Home First? Is it Contractors Bonding Ltd? they are the longest established company offering these types of guarantees.
If it is them, and you do have the guarantee, (you should have got a certificate of guarantee) then you need to make a claim. Get in touch with them and find out how.
If you don't have the guarantee but did pay for it then your Lawyer or Fair-Go is probably your best bet to expose this.
If you don't have the guarantee, and A1 is unwilling to help same applies. Was the franchisee a Master Builder as someone else has asked? if so make contact with Master Builders to make a claim.Last edited by outspoken; 11-08-2008, 12:07 PM.
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Originally posted by simoneg View PostI know that when we verbally queried the fact this wasnt a "master builder" guarantee and we did ask what happens if you went into liquidation - I was assured that A1 Homes had been round a long time and would always cover us and told that a master builders guarantee was not as good as a A1 guarantee...
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Originally posted by simoneg View Post. I dont have any sympathy by the way for someone buying a going concern without researching what they were buying - so sorry cant be sympathetic to Ross Thomas.
Are you in Nelson? IF so - the fact is that Steve Griffiths is the main and sole reason for your problem. Blaming Ross Thomas is not the answer - neither is going to Fair Go. Do you honestly think he hasn't been threatened with this before? He has no financial or moral responsibility to help you. If he helped you - whats stopping every single other person with a beef against Steve Griffiths going to Ross for the money?
Chalk it up to experience - things could be alot worse.
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This is shocking.
The damage was caused by negligence by the franchisee who built your home. I am assuming that A1 Homes in Nelson (the builder trading under A1 name franchisee) is in liquidation - so there is no point in pursuing this avenue as there will no money available to you. I remember reading there was a deficit of funds to the tune of several million $.
However the gurantee is the interesting part - if it is a Masters Builder's Gurantee then get in touch with them and see what your options are. If the gurantee is an A1 homes one then I would be presuring "Ross Thomas" the owner of A1 Homes to rectify this problem as well as Masters Builder's.
After all it is "Thomas" who appointed the fracnchisee in the Nelson area - if he fails to pay up then I would strongly suggest that you take the matter to the small claims tribunal - the maximum you can claim is around $6 k which should go towards the damage. If the damage is more then this I would suggest droping your claim to $6 k - some money is better then nothing.
The Tribunal is an informal envrioment and is more about fairness then applying the law in these type of cases. I would not be going quiet over this one, it will take numerious calls, threatening lawyers letters and e-mails for you to get results.
Saying that it is not "Thomas" fault is a cop out - his company appoints franchisee's and they are meant to have financial stability, choosing such a roque franchisee does the brand huge damage - damage that Thomas should be paying up to correct these issues. If he has paid out "hundreds of thousands" as others on this post have stated then he should pay for your damage caused by this idiot he appointed in Nelson. I am sure Thomas was happy when the royalities were flowing in from the Nelson franchise - time to cough up I reckon.
Simple as that.
Good luck and best wishes
Chris
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Originally posted by rueben View PostIt is the Franchisee who has been liquidated. It is not Ross Thomas' responsibility if the Limited Liabililty Franchisee's company has been liquidated. It is a totally different company to his own. (although it is his problem because he has to deal with problems such as yours and a "bad name" for his company)
Of course it is Thomas problem that the builder went into liquidation - before signing on a franchisee you vet them to ensure financial stability.
The fact that they had an "oral agreement" that stated the gurantee would cover them in even of a liquidation further illustrates that Thomas should cough up.
Originally posted by rueben View PostIt is the same as if you built with an "one man band" builder who then goes into liquidation.
This is classic example of franchisor's who are willing to accept quit profits over long term stability of the brand.
Originally posted by rueben View PostI believe the Guarantee off the website is a new Guarantee and was brought in when franchisees went into liquidation. It is between the individual franchisee and yourself - nothing to do with the Master Franchisor.
Originally posted by rueben View PostRoss Thomas is passionate about his business and the A1 business model is good. They have great plans and are a good quality product. Its unfortunate that a couple of individuals who can't run a business have sullied the A1 name.
The product is hardly quality - tell that to the homeowners again who are out of pocket - and to people above!
These "individuals who can't run a business" were appointed by A1 - they CHOOSE the franchise's - they obviously did not do the research to ensure they were realiable.
The fact is A1 is a dodgy outfit.
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Originally posted by ChrisDes View PostWhat absolute rubbish.
Of course it is Thomas problem that the builder went into liquidation - before signing on a franchisee you vet them to ensure financial stability.
The fact that they had an "oral agreement" that stated the gurantee would cover them in even of a liquidation further illustrates that Thomas should cough up.
Again rubbish - the reason you use a nationwide company is for stability -A1 should have spent more time on a comprensive investigation of the franchisee's instead of being happy to sit back and take royalty fee's then do a runner when the going gets tough.
This is classic example of franchisor's who are willing to accept quit profits over long term stability of the brand.
The fact of the matter is DON'T use a non-registered Master Builder. Master Builder gurantee's are actually worth the paper they are writtn on - unlike A1 Homes which obviously has insufficient financial stability to become a MB - at the end of the day dodgy outfits like this will screw you over - just like these people.
The A1 business model is not good - Thomas selected a franchisee that has gone into liquidation owing millions of dollars leaving many people out of pocket - how is this a good business model?
The product is hardly quality - tell that to the homeowners again who are out of pocket - and to people above!
These "individuals who can't run a business" were appointed by A1 - they CHOOSE the franchise's - they obviously did not do the research to ensure they were realiable.
The fact is A1 is a dodgy outfit.
My whole point is that franchised building companies are NOT nationwide companies. They are individual limited liability companies who are just as vulnerable as the builder down the road. Just because they have paid to use the name and plans doesn't mean they are any more stable.
To say A1 is a dodgy outfit is damaging to all the very good franchisees out there who are providing affordable housing to plenty of people. Whether you think its a quality product is purely your opinion. The best people to judge this are the people who are living in them.
You don't have the facts about the verbal agreement - we don't even know who the verbal conversation was with.
So are Jennian Homes now dodgy because a couple of their franchisees have gone into liquidation in the past?
The FACTS are, that there isn't a legal leg to stand on. A court will not and can not make Ross Thomas liable to pay Griffiths Construction limited debts. Going to the Small Claims tribunal would be a waste of time because they deal with the law. Just because you think Ross Thomas is morally obliged to pay every single cent that is owed does not make it possible.
Any guarantee or warantee would be between the franchisee and the home owner. That is a totally separate issue.
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Originally posted by ChrisDes View PostWhat absolute rubbish.
Of course it is Thomas problem that the builder went into liquidation - before signing on a franchisee you vet them to ensure financial stability.
The fact that they had an "oral agreement" that stated the gurantee would cover them in even of a liquidation further illustrates that Thomas should cough up.
Again rubbish - the reason you use a nationwide company is for stability -A1 should have spent more time on a comprensive investigation of the franchisee's instead of being happy to sit back and take royalty fee's then do a runner when the going gets tough.
This is classic example of franchisor's who are willing to accept quit profits over long term stability of the brand.
The fact of the matter is DON'T use a non-registered Master Builder. Master Builder gurantee's are actually worth the paper they are writtn on - unlike A1 Homes which obviously has insufficient financial stability to become a MB - at the end of the day dodgy outfits like this will screw you over - just like these people.
The A1 business model is not good - Thomas selected a franchisee that has gone into liquidation owing millions of dollars leaving many people out of pocket - how is this a good business model?
The product is hardly quality - tell that to the homeowners again who are out of pocket - and to people above!
These "individuals who can't run a business" were appointed by A1 - they CHOOSE the franchise's - they obviously did not do the research to ensure they were realiable.
The fact is A1 is a dodgy outfit.
Personally I don't like what they build, they are a blight on the urban landscape, and are worse than those 'Golden Homes' spec houses that are being built around the fringes of towns. Poorman design, poorman materials, and really poor workmanship. I have seen a small colonial townships character ruined by the things, with developers moving in, building these eyesores, making their money, and then disappearing. At least some towns now have urban design guidelines in place to prohibiting these things being built.
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Buying a franchise is no guarantee of financial success... while it is true that franchises are far more stable than general businesses. I've seen it quoted that 90% of franchisees survive their first 2 years, that figure is a lot lower for other business operations.
A franchisor has limited control (and obligations) when it comes to support for a franchise operator. Some franchise systems essentially sell a 'license' to operate a business under a brand name. Others have a strict operations process that needs to be adhered to with regular site visits and compliance checks... with most falling somewhere inbetween. Its a win-win for most business operations as you get the strength of a recognised brand, combined purchasing power but the independence to run your own business.
I would not expect a franchisor to be responsible for the failure of an individual franchisee. From a legal sense unless there is a specific guarantee to the contrary a customer has the same rights as if they were dealing with any other independent building company... and quite a few of those are going through the wringer at the moment.
Tainting the entire A1 brand for the failure of one franchisee is a foolish move in my opinion.
And people don't buy spec homes for the originality of design or quality of workmanship, they buy them because they are CHEAP.
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