Du Val Group: Financier withdraws loan on Mt Wellington apartment, couple fear big losses

A financier has withdrawn a loan on an Auckland apartment developed by failed firm Du Val Group after Cabinet last month appointed statutory managers, a buyer says.

“We can’t sleep,” said the man, saying he and his wife had signed a contract to buy an $830,000 unit at Du Val’s Mountain Vista Estate three years ago, based on the financier agreeing to loan them the money.

But last month, everything changed.

A senior mortgage lender at their second-tier non-bank Hamilton-based financer wrote to their mortgage broker, saying no money would now be available to settle the apartment purchase due to Du Val’s problems.

“With ... Du Val going into statutory management, we are just not comfortable to proceed at this stage. Hopefully, this does not cause any issues for the clients.”

The buyer forwarded the correspondence, saying he and his wife feared the loss of their $83,000 deposit, paid in 2021.

“We may be liable to pay any losses if and when this property is sold by the statutory managers,” he said.

His lawyer had advised him of that, meaning a potential loss of $300,000 to $400,000.

“Our lawyer working on the property deal thinks that this is what can happen by law if we don’t settle. The sale and purchase agreement was unconditional,” he said.

“My wife and I haven’t slept since all this has happened due to the uncertainty that in future we may be liable for an additional $300,000 or $400,000 on top of our lost deposit, which will make us bankrupt. It is very nerve-racking, and we didn’t even do anything wrong here.”

PwC is understood to be looking at the couple’s case with a view to achieving a positive outcome.

Today, the High Court at Auckland heard an application from the media for access to the PwC receivers’ report.

BusinessDesk reported a lawyer for Du Val founders Kenyon and Charlotte Clarke had described placing Du Val into statutory management as having “Cold War vibes” about it.

Statutory management was a “brutal” regime and “a level of state intervention that has Cold War vibes to it”, the Clarke’s lawyer Daniel Nilsson told the court.

Earlier, the High Court put Du Val Capital Partners and other Du Val Group companies into interim receivership on August 1 after an application from the Financial Markets Authority.

When making the orders to appoint receivers to 64 Du Val entities, the court also made an order prohibiting the searching or copying of the court file or any documents filed in the proceeding without the leave of a judge.

That receivership has now been replaced by statutory management.

A decision on media access has been reserved.

Du Val's Mountain Vista Estate.

Some of Du Val’s properties, planned and completed, are:

• Lakewood Plaza, a 15-level apartment block of around 151 units at Manukau near the motorway off and onramps where water mains broke in 2021;
• Mountain Vista Estate, 35-37 Walmsley Rd, Māngere: Du Val says this is more than 180 units, from $700,000;
• Verge Apartments, 64 Hillside Rd, Mt Wellington: listed as being under construction, units from $699,000;
• Te Awa Terraces, 26-30 Earlsworth Rd, Māngere East: under construction, townhouses from $829,000;
• Sunnyvale Terraces, 9-11 Sunhill Rd, Sunnyvale: planned to be built, units starting from $855,000;
• Edmonton Mews, 64-67 Edmonton Rd, Henderson: planned, units from $849,000;
• Rātā Terraces, 87 Tui Rd, Papatoetoe, completed project, townhouses are being rented from $525/week;
• Hilltop, apartments planned for Mt Wellington: visuals showed a seven-level block, not priced.

Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.