KEY POINTS:
Listed property specialist Blue Chip Financial Solutions blames the problems of apartment investors on other parties, saying matters are out of its control.
Investors have made a string of complaints against the Auckland-based ASX-listed company lately, but Blue Chip says all the problems are created by other parties.
Complaints include weathertightness issues at two North Shore apartment developments and non-delivery of hundreds of apartments for which investors have paid deposits.
Blue Chip is blaming leaky building syndrome problems at the 48-unit Avenue project on people involved in the project when it was developed.
Marisa Rakich, Blue Chip's marketing communications manager, said the company had been caught in a twilight zone, between one set of rules for buildings and the major revamp sparked by revelations of weathertightness issues.
"Blue Chip selected properties for clients based on all of the appropriate information being available to make a sound purchasing decision," she said. "Like everybody else, we rely heavily on local authority certification to ensure our investments are sound. And, like everybody else, we are a property owner in this development also.
"The Avenue development was completed under the old building code nine months prior to Blue Chip negotiating the purchase of these properties. Blue Chip has inherited the problems relating to the Avenue development, namely the compliance issues and the remedial repairs."
The project was developed by Brent Clode and Blue Chip got warranties that it would receive code compliance certificates, Marisa Rakich said.
"An independent certifier had inspected the properties and certificates had been supplied to North Shore City Council. All that was left to do was to see out the formality of the council issuing the certificates. The council refused to issue these certificates after the introduction of the new code.
"We now believe the issue of these certificates was deliberately delayed by the council as a method of protecting it against liability in relation to leaky building issues."
Blue Chip had made repairs to units but the development was now the subject of a dispute between Blue Chip and the council because the builder and developer had liquidated the company involved, she said.
On the units at Sunset Rd, Blue Chip had made substantial repairs to this townhouse development and the matter was also in legal dispute.
"The Sunset Rd development is presently in the High Court and Blue Chip is pursuing compensation from the council and others for the cost of the repairs and loss of rent we have paid out on properties that have not been tenanted as a result of the weathertightness issues.
"Clients who have properties in this development are aware of this court case and have assigned Blue Chip the rights to take action on their behalf.
"In the cases of the Avenue and the Sunset Rd developments, investors would not have the resources or ability to take on the council. This is one of the benefits investors have with Blue Chip acting on their behalf," she said.
On complaints that Blue Chip had not delivered new apartments to investors, Rakich said this was also outside its control and attributable to another rule change.
"A number of apartments have had construction delayed, but due only to changes by Auckland City Council on the minimum apartment sizes and lighting requirements now required. This is a delay not of our causing. The developers have had to substantially redesign these developments. Blue Chip would not allow the developers to proceed with these projects until clients could purchase properties that were in line with the new local authority regulations.
"The re-design now sees all new requirements met in full, new resource consents have recently been received, the contractors are now on site, and the apartments have been started.
"All through this situation we have endeavoured to keep prospective owners up to date with what is happening. And throughout, those who have made deposits have been receiving compensation payments at a rate covering any holding or borrowing costs incurred. We are aware that a number of projects in Auckland City have been similarly delayed as a result of the changing regulatory landscape."
