Potential insolvent trading probe after modular builder's closure

The Consumer Protection Authority of Western Australia is requesting clients of modular home builder Bella Modular to submit formal complaints following the company's sudden closure. Bella Modular, a Perth-based manufacturer of transportable granny flats and home office buildings, announced its inability to complete outstanding projects due to "unforeseen and significant financial difficulties" in an email to clients on August 19.

The company has since ceased operations in Hopeland, on Perth's southern fringe, with dozens of customers paying deposits, some exceeding $100,000, for projects now months or even years overdue.

WA Consumer Protection Commissioner Trish Blake has engaged the Australian Securities and Investments Commission (ASIC) to investigate potential insolvent trading. Blake expressed concern that customers may have unknowingly paid for services without a reasonable chance of successful completion. She emphasized that clients still have rights under Australian Consumer Law, even if contracts are not covered by building indemnity insurance, which typically does not cover losses when a building company goes out of business.

Blake stated that the agency aims to gather as many complaints as possible to understand the full circumstances of the company's closure and determine appropriate action. The company has a debt of $576,614.68 to the Australian Taxation Office and faces three court actions for other payments totaling over $170,000. Some affected customers, like Peter Elliot, who paid a $90,000 deposit for a granny flat intended for his parents, are worried about how another company would complete the unfinished project.

Another customer, Steve Evans, who paid nearly $160,000 for a customised home, described feeling betrayed and uncertain about the future.