Perth-based manufacturer Bella Modular, which built transportable granny flats and home office buildings to order, wrote to all its customers to notify them it would be unable complete their projects and had already vacated its premises.
"Due to unforeseen and significant financial difficulties, Bella Modular is unable to complete your project directly," it wrote on Wednesday last week.
"To ensure your build is protected and delivered through to Practical Completion and final handover, Bella Modular has entered into an arrangement for an independent, fully resourced third-party modular builder to step in and take over the management and construction of your home."
The letter does not name the new third-party builder nor make mention of what has happened to customers' deposits, but said they would be given the new company's details within 14 days.
Customer Peter Elliot, who ordered a granny flat intended for his parents in May 2025, told Nadia Mitsopoulos on 102.5 ABC Perth he was shocked to receive the letter.
"About three weeks ago, I'd had a phone call with the production manager on site," he said.
"He told me that our steel was on site and just ready to be assembled."
There had already been substantial delays in the build.
Mr Elliot paid a $90,000 deposit — 50 per cent of the cost of building — to guarantee a three-month completion time and had been hoping to have his parents living in his backyard by Christmas 2025.
"My parents are devastated," he said.
Concern for deposits
Because the modular homes are built in a factory off-site and customers arrange transportation and cranes for the homes themselves, builders' indemnity insurance does not apply.
"The business model, which made sense to me at the time, was they construct a dwelling; we take ownership of the dwelling; we transport it and we are the owner-builder," Mr Elliot said.
He is uncertain how a new company is going to complete his modular building, or where his $90,000 deposit is now.
"I can't envisage another company taking on, effectively, the 50 per cent debt against the buildings that are either underway or promised to be underway," he said.
Another customer left wondering is Steve Evans, who has paid almost $160,000 towards a modular home from Bella Modular that is yet to be built.
He initially paid a deposit of $28,000, then was contacted by the company four weeks ago to ask for a further $130,000, which he paid.
"It had a due date, which I found very odd at the time, of four days after I received the invoice, which is highly unusual because you need time to arrange funds to be able to transfer into accounts," Mr Evans said.
A Credit Watch report shows the company has a debt to the Australian Taxation Office of $576,614.68. It is also facing three court actions for payments totalling just over $170,000.
Communication issues
On April 30 this year, Bella Modular wrote to clients apologising for the delays in their builds and the lack of communication with customers, promising improvements to its production schedule.
"Over the past 12 months, the level of customer service and communication you have received has been, quite frankly, atrocious," it wrote.
"We are currently playing catch-up, and while we are implementing solutions that should have been brought to you months ago, we do have a strategic plan in place."
Caroline Marsh, another of the company's former customers, said she received her building more than two years after first placing her order in March 2024.
"In May this year, we received the delivery of the two modules that we ordered, and it was a very stressful time," she said.
"We had basically no communication with barely any of the staff through that two and a half years. I had to constantly go down there to check if any progress was happening.
"A week before we actually got delivery of ours, we were told it was definitely finished so I went down there and I looked at it and it wasn't finished.
"I still had a checklist of things that they hadn't done."
Bella Modular's owners have been contacted for comment.
