Retirement dreams shattered after woman pays tens of thousands of dollars for a home that was never built

On one of the bay islands just off the coast of Brisbane, there's an empty block on a quiet street not far from the water.

If you peer through the trees at the bottom of the sloping block, you can just spy the ocean from the road.

Some of the dirt has clearly been recently disturbed, but aside from that, and a "sold" sign lying on the ground, there isn't much to see.

For 75-year-old Lorraine Hemley, the Russell Island block is a costly reminder of what could have been — a peaceful place to retire, or, as she put it, somewhere she wanted to "settle down and rest".

"This was for me," she said.

But after paying $84,000 for what was ultimately nothing more than a few dozen holes, she has no home to call her own, and nothing to show for the "nest egg" she built up.

'He said he'd get right to it'

In about May of 2024 — just a few months after she bought the block — Ms Hemley contracted a north Gold Coast-based building company called Go Build 2000 Pty Ltd for the job. 

Karl Hofman, who she found on an online hiring site, was the director of the company. He told the ABC that he has been forced to close his business for health reasons and is working to repay clients.

She had already got designs and plans drawn up by that stage and was quoted a total of about $240,000 for the job.

That same month, she paid a first invoice to the total of $84,000 for him to get started.

She thought she had done her due diligence by signing a contract and checking his company held a valid ABN. 

"He said he'd get right to it, and get it done," Ms Hemley remembers.

As the months passed, Ms Hemley began to question the speed of the build, and what she perceived to be a considerable lack of progress on the site, apart from the digging of some holes.

Each time she questioned Mr Hofman, she received responses telling her things were "progressing nicely" or that he was "on site" or would be in the near future.

But by the time Ms Hemley received an invoice for another payment of $72,000 in August, she said did not feel comfortable paying it because she had yet to see any major work begin on the site.

Mr Hofman then issued a notice informing her that he intended to suspend works for non-payment of the invoice. In response, Ms Hemley engaged the services of a lawyer — at another cost to her — to cancel the contract.

'No way back' from financial loss

Ms Hemley lodged an insurance claim under the Queensland Home Warranty Scheme, operated by the state building regulator, which refunded her $12,000 — or 5 per cent of the total contract price.

Under the Queensland Building and Construction Commission (QBCC) rules, if work has not been started, it cannot cover more than that.

Essentially, Ms Hemley came to the realisation that she had paid too much for unstarted works.

After an internal appeal from Mr Hofman, the QBCC upheld its decision that Ms Hemley had validly terminated her contract, finding that he was in breach of the contract on four grounds.

They included that he failed to perform work diligently and no approval for the work had been obtained at the time of the termination notice, and that Ms Hemley had paid for materials which were not supplied five months later.

It also found he had issued invoices for progress payments which did not "directly relate to the progress of the work".

He told the ABC that he has been forced to close his business for health reasons and is working to repay clients.

The loss of the $72,000, combined with the more than $10,000 she spent in legal fees, has changed the direction of Ms Hemley's life. 

Despite having sold the block for more than she purchased it for, rising land and property values mean she fears she will not be able to enter the property market again.

"If I was younger, I might have a way back," she said.

Having learned she is not the only person to have lost money to Mr Hofman's business, she is dismayed more cannot be done to get her funds back.

Others come forward

One of those former clients is Gold Coast resident Karyn.

She secured an order in the Beenleigh Magistrates Court against Mr Hofman on November 5 this year, which requires him to pay back the $14,000 she paid him in February — along with costs for rectifying the work and interest accrued — for a pool fence, which she said he never delivered.

Karyn said she was told by Mr Hofman in August this year he was experiencing health issues, and he committed to giving her a refund for the work. 

But after that, her calls and texts went unanswered — as did correspondence from her lawyers.

"We then had to go the Magistrates Court. He didn't show. So then we applied for a judgment against him, which we received," she said.

In response to questions from the ABC, Mr Hofman said he had entered into a repayment agreement. 

However, Karyn said she is yet to get her money back.

Canungra-based Leanne Patterson claimed she also lost about $15,000 after paying Mr Hofman to build a garden fence and shed in two separate instalments in March and April — jobs she said he never did.

Ms Patterson said she did not think a contract was needed given the size of the job, and she has decided not to make any insurance claim or complaint against Mr Hofman after learning she was likely only eligible for a 5 per cent deposit back through the QBCC.

"We took our losses," she said.

She said Mr Hofman first told her he was unable to do the job because he was busy with other cyclone-related work. In July, he said he was experiencing health issues, but thanked them for their patience.

Ms Patterson said that was the last time she heard from him.

In Brisbane, another former client, Sujata Das, paid Mr Hofman just over $1,000 in April to start building a small deck.

Ms Das accused Mr Hofman of taking her deposit and then effectively ignoring her over a period of several weeks. She said she was told he was experiencing health issues.

But she claims when she repeatedly threatened to escalate the matter, including by reporting it to police, he did transfer her funds back in June.

Hofman 'actively working' toward repayment

Mr Hofman declined to participate in an interview but in a statement said serious health issues had led to the closure of his former building business, and that he had not engaged in any intentional wrongdoing.

"As a result, some projects were unable to proceed and repayments were delayed," he said.

"I acknowledge that money remains outstanding to some former customers, and I am actively working toward full repayment of all outstanding amounts."

A QBCC search for Go Build 2000 Pty Ltd, of which Mr Hofman was a director, shows the company held a licence but it was cancelled in August this year due to the absence of a current nominee.

In response to questions from the ABC, the regulator said it could not comment on individual matters.

But it warned against paying more than the legislated amount for deposits.

"Home owners should not pay excessive deposits, or pay ahead of time, for building work. They should always use a written contract, dated and signed by both parties," it said.

In Queensland, maximum deposits are set out by law. In most cases, for work to the value of $20,000 or more, the maximum deposit is 5 per cent.

The regulator said it remained "firm on its action towards repeat offenders and non-compliance".

Experts sound alarm bell on consumer protection

Ms Hemley, who initially blamed herself for having lost the money and block, said she is sharing her story in the hopes it may stop someone else from ending up in the same situation.

Her advice: take your time, take the contract to a lawyer, and "don't be in such a rush" to get the build done.

But construction defect expert at the University of Technology Sydney, Professor Geoff Hanmer, said there is not enough support for consumers who find themselves embroiled in what often become costly building disputes.

"Unlike consumer goods, construction is often very complicated and people embark on very complicated things with no professional assistance or advice," he said.

"When things go wrong, that can become very troublesome, and so people go to their state building authorities ... and generally speaking, they are lucky if they get help."

In Queensland, the QBCC has stressed it is focused on more "proactive" measures, and encourages consumers to seek advice before things go wrong.

The state's housing minister Sam O'Connor said the government was also focused on "transforming" the QBCC into a "regulator that delivers faster and clearer decisions for both home owners and builders". 

Professor Hanmer said he believed consumers deserved protection of some level, even in situations when they maybe had not been "careful".

But he agreed with the QBCC and Ms Hemley, that people should seek help before signing a contract.

"We're often talking about the biggest investment that people make."

He said tough, decisive action needed to be taken by regulators against repeat offenders.

And, amid a national housing shortfall, and a skills shortage, Professor Hanmer has warned building disputes are only likely to become increasingly common.

"The reality of it is that at the moment ... governments are trying to let the brakes off in order to get the construction industry to build more houses," he said.