Massey, where new homes are being built around Westgate. Photo / Richard Robinson
Massey, where new homes are being built around Westgate. Photo / Richard Robinson
Buyers who paid $2.03 million in deposits for planned but never-built new Massey homes are expressing distress after the development company was put into receivership and liquidation with a deficit expected.
One man said he has fears for his son, who is a buyer.
“We paid a depositof $75,000 to buy the property in Babich Rd but the company went into liquidation. It is my son’s money, who works overseas and he is a first-home buyer. We’re hoping that we will get our money back,” he said.
He responded to publicity yesterday that cited a Waterstone receivership report with the $2.03m figure as well as a liquidator’s report that said 52 buyers are owed money.
The buyers paid deposits to a company, Babich Rd, for new Auckland homes where land was not even bought, according to insolvency experts.
This new housing development was planned to be built at Red Hills Rd, Massey but the developer never even bought the land. Photo / Development scheme
But it never even got as far as the company buying the land for the new homes, Botes said.
The deposits were released from a solicitor’s trust account, which meant they did not stay where they should have.
The man whose son put down the $75,000 deposit said the development was marketed as Cassiny Park Development.
He wants the Serious Fraud Office to investigate and the Herald has asked the SFO if it can confirm people have complained.
Cassiny was to be built at 21 Red Hills Rd, the man said. The $75,000 was paid in 2021 when it was being marketed via a real estate agent.
But problems were apparent early on and that land couldn’t be developed.
“They informed us that there was a pylon tower in the property so they convinced us to move to [Babich Rd], Henderson Valley which we accepted,” he said.
Waterstone receivers said creditors of Babich Rd are mainly first-home buyers. Botes said some were retirees.
One would-be buyer demanding their deposit back triggered the receivership.
Money paid by depositors was initially held in a separate solicitor’s trust account.
But the man whose son paid $75,000 said: “We paid our deposit to our solicitor who paid it to the developer’s solicitor. Really not sure why the second solicitors released our deposits to the developer.”
Botes also expressed concern about the release of funds.
Botes’ report said: “There are a number of matters of concern to the liquidator which will be investigated in due course. The director has been unco-operative, offered no meaningful explanations to questions posed to him and the discussion with him elicited no meaningful information.
“Further complicating matters, we understand that the project was initially going to be located at Red Hills Rd and this project did not materialise due to the company being unable to purchase the land,” he wrote.
Because the land had never even been bought, there is no construction work in progress, Botes said.
Ebrahim told Botes the venture had failed due to a change in planning rules for the site after Cyclone Gabrielle.
“We have had discussions with the solicitor acting for the petitioning creditor in this case who has expressed some disquiet at the actions of the director in the lead-up to the liquidation. These issues will be pursued,” Botes wrote.
Many agreements favoured the vendor/developer and did not have a clause protecting the deposit. People who got good legal advice would never be told to accept that, conveyancing lawyer Andrew Seton said.
“As a lawyer for a purchaser, you must let clients know the importance and why they should not proceed with the contract if there is no protection of the deposit.
“This is pretty basic stuff,” Seton said.
Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.
