© Domingos Oliveira / RTL
Our colleagues from RTL spoke to a couple affected by the bankruptcy of contractor Cenaro about the challenges that they are still facing before being able to move into their own home.
When the couple's first contractor, with whom they were building in the municipality of Kayl, went bankrupt, the completion guarantee proposed Cenaro as a new developer at the beginning of 2021. Cenaro then took over the contract and communication with the company was good and professional, say Anne* and Paul*.
However, it took about a year for construction to resume. The reason given was that studies first had to be completed, a "normal" procedure according to EuroCaution.
An insurance agent has to accompany clients during a bankruptcy. When a new construction company takes over, it must be ensured that the work already carried out up to that point has gone well so that no problems arise later.
*Names were changed upon request.
Suddenly, all communication stopped
When the press started drawing attention to Cenaro's problems, communication suddenly broke down. Anne and Paul recall: "In November, things started to slow down, we noticed it ourselves. The workers were still there when we read about the company's difficulties in the press. Our emails went unanswered, and we were again very scared."
Since the end of last year, no more work has been done at the young couple's construction site. The bankruptcy was then declared in January, as our witnesses expected, because all work stopped overnight.
Following the bankruptcy of Cenaro, about 25 cases are pending with the consumer protection authorities. Clients of the company already reported that the construction of their house or flat was at a standstill last year.
Now that the bankruptcy is official, people will be able to benefit from the so-called completion guarantee, which banks are compelled to offer by law. In the case of Cenaro, the completion guarantee is issued by an insurance company.
"The Insurance Commissariat has indeed declared that clients can subscribe to a policy. Whether it is valid or not, this insurance must guarantee the completion of the house or flat", explains lawyer Pierre Reuter from the Consumer Protection agency.
For EuroCaution, the simplest thing would be for the content of the guarantee to stipulate that the flat will be built, whether it comes from a bank or an insurance company. The completion guarantee is compulsory in Luxembourg when purchasing a planned home.
According to Alessandro Rizzo, CEO of an insurance company, "79% of all clients who received their guarantee through our insurance guarantee have already made a declaration. With 48 families, we are about to start the completion process. This means that a survey is underway to assess the situation and to see what remains to be built so that construction can start as soon as possible."
Clients can choose their contractor as soon as a guarantee is activated. The guarantor simply approves it. So far, relatively few developer bankruptcies have had to be dealt with, but Rizzo remains sceptical: "We believe that the bankruptcy of this large group is now the first of many. And it will not be limited to 100 families, there will be many more in this situation. The Luxembourg market is generally very well structured, but no matter how good a company is, if it no longer sells and costs are fixed, clients can do nothing."
After bankruptcy, construction deadlines no longer have to be met, so it is important to ensure that all work is carried out as planned, explains Reuter: "In this case, the only one who could have guaranteed delays was the Cenaro group. This will no longer be the case. No delays are covered by the contracts with the insurer, which guarantees the execution. There is therefore no obligation to continue building according to a certain deadline."
At present, Anne and Paul do not know when they will be able to move into their house. They are still looking for a new developer, which also takes time. They have already been living with their parents for more than a year beyond what they initially expected. Indeed, the young couple was supposed to move in in July 2022. Following the first bankruptcy, there were already delays, Cenaro had planned December 2023 as the date for handing over the keys, a little ahead of schedule, which had given the young couple hope.
But, the future owners are still in limbo despite not having been charged any additional costs, except for certain extras such as extended storage for their belongings. They are now waiting for the kitchen they ordered, but time is starting to run out. The road to their dream house has turned out to be much longer than expected, something that might affect many more families in the not too distant future.
