Western Australia's biggest home builder is facing legal action over delays and alleged contract breaches, as lawyers for disgruntled customers secure litigation funding.
Morgan Alteruthemeyer Legal Group estimates up to 5000 homeowners could join the proposed class action seeking compensation from BGC Housing Group for the losses they incurred.
Lawyer Spencer Lieberfreund said securing funding for the legal battle was a significant step forward for BGC homeowners, with 800 already agreeing to join the action which could recoup up to $200 million.
"(They) have suffered financially from the delays in building their homes," he said on Thursday.
“A class action against BGC offers individuals a way of seeking financial compensation without being exposed personally to legal costs."
It is open to homeowners who entered into home-building contracts between July 1, 2019, and June 30 last year and suffered losses due to unauthorised delays in construction.
Morgan Alteruthemeyer Legal Group has secured funding with Omni Bridgeway Limited, which describes itself as "the global leader in litigation financing and managing legal risk".
A group of BGC homeowners with more than 2200 members has been campaigning to raise awareness about the financial hardship suffered by many customers due to delays.
“We are pleased to learn of the litigation funding announcement regarding the class action but securing funding to commence a class action is not enough," co-founder Jess Spithoven said.
"We need all BGC homeowners who have suffered or will suffer financially because of BGC’s delays to come forward and register to join the class action.”
BGC Housing Group includes several big brands - Aussie Living Homes, Homestart, Smart Homes for Living, Now Living, Terrace and Ventura South West.
It paused new home sales in April to focus on clearing a backlog of almost 4000 builds.
In a statement, the builder said the severe lack of labour and materials faced by the industry was beyond its control and it would "vigorously" defend any legal action.
"BGC Housing Group is committed to its customers and we have been diligently working our way through our existing home builds," a spokesman said.
"We are acutely aware of the impact of delays on homeowners, and we remain focused on finishing all homes we currently have under construction."
The company said its production levels in August had reached record levels.
It also said government stimulus grants during the COVID-19 pandemic had created extra demand for new homes and there were not enough skilled workers available to complete the building projects.