KEY POINTS:
An Auckland investor who bought a unit through property and financial specialist Blue Chip Financial Solutions is angry about sudden rent payment changes and lack of final sign-off at an Albany apartment.
Blue Chip, listed on the Australian Stock Exchange but headquartered in Auckland, has made substantial changes to its business in the past month, including halving staff numbers and franchising much of its business.
The office worker said Blue Chip had written to her on September 21 advising the $400 weekly rental payments on the $300,000 unit at The Avenue would be changed to monthly.
"That meant I had to find extra money for my mortgage repayments," the investor said. "They just called and said it was changing."
And despite the unit being completed years ago, North Shore City has refused to issue a code compliance certificate. The investor said Blue Chip had assured her it was being handled and a certificate would be issued but she is considering selling the unit and said lack of final approval would be a major obstacle.
Marisa Rakich, Blue Chip's marketing communications manager, said rental payment changes were made because the company had changed the way it did business. On the lack of certification, she said she was unaware of details but such problems were not common in properties Blue Chip managed for its clients.
The investor said she had received continual reassurances that her unit would get approval and was unaware that The Avenue was one of the most significant Department of Building and Housing determination refusals upheld to date.
The department ruled last year that 48-unit residential complex built six years ago had many serious defects.
John Gardiner, the department's determinations manager, backed the council for not issuing any certificates for 11, The Avenue.
A challenge to the council's decision not to certify was brought by Blue Sky Holdings, a Blue Chip associate.
Gardiner's report on the two-level terraced and semi-detached units on a sloping site showed 20 major defects, including cracked claddings, problems with texture coatings, problems with flashings above windows, problems with seals around windows and "questionable" quality of weatherboard material which was cupping, splitting and showed numerous knots.
The council had issued a notice to rectify the monolithic and rusticated cedar weatherboard units, Gardiner noted.
BLUE SKIES OR GREY?
* Blue Chip Financial Solutions is ASX listed.
* Shares closed at A58c yesterday, down on A$1.60 last year.
* Blue Chip's clients own thousands of Auckland apartments
* The business has retail clients in New Zealand and in Australia.
BE REASSURED, INVESTORS TOLD
Apartment and investment specialist Blue Chip has told its investors that financial ructions in other sectors should reassure them.
Neil Bell, manager of Auckland Residential Tenancies (ART) - the lessee of investment properties sold by Blue Chip - said sharemarket rumbles and financial instability should make investors realise they had done the right thing.
"Recent high-profile collapses of finance companies and the turbulence in the sharemarket have confirmed why residential property continues to be New Zealanders' most favoured investment vehicle in the long term."
Around the same time, ART was dealing out blows. One landlord saw his apartment's rent slashed from $550 a week to $400 because it was above market value.
