Property development company goes into voluntary liquidation

The company built new homes in subdivisions in Invercargill, Huntly and other locations. File photo / APN

A property development company has gone into voluntary liquidation owing almost $2 million.

Owner and director of Wealth Buy Property Limited, Martin Hutchin, said no prospective home buyers would lose money in the liquidation.

Mr Hutchin said all homes for which deposits had been paid were already built or the deposits refunded - although liquidators said one prospective buyer may lose a deposit.

The company built new homes in subdivisions in Invercargill, Huntly and other locations, which were sold as investment properties. The homes were then rented through a related company under a 10-year rental guarantee.

Mr Hutchin said the global downturn, and the collapse of investment company Blue Chip were among the reasons for the liquidation.

"People haven't been buying investment properties, especially outside of Auckland."

Another company also owned and directed by Mr Hutchin, MAEK Investments Limited, trading as WPB Rentals, continues to manage the rental of properties built under the scheme. Mr Hutchin said there were no concerns about that side of the business.

Liquidator Kevin Pitfield from Staples Rodway, who was jointly appointed with Gareth Hoole by resolution of shareholder in July, said he understood one homebuyer had entered a contract for land and build package and had paid a deposit. But it wasn't clear whether that buyer was in a position to go through with the purchase anyway, and the liquidators were likely to disclaim on the deal.

The liquidator's first report, dated July 24, said Wealth Buy Property had experienced cashflow difficulties for some months, which were compounded by poor financial management and a general economic downturn. This had prevented the company meeting its debts as they fell due.

A statement of position provided by the company showed assets from its current account and stock as $877,355.

Total liabilities were $1,949,032, of which most was owed to unsecured creditors.

Mr Pitfield said they were still to confirm whether that position was correct.

The company has received complaints from investors in the past, with some saying homes built in a subdivision in Huntly were substandard and were not providing the rental returns promised.

Another prospective buyer went to court in 2010 to have a deposit returned after building consents were not approved until after the agreed completion date.

Investor Terry Adams from Whangarei also had his deposit refunded after going to the Disputes Tribunal and publicly airing his concerns with the company on a property investor website.

Mr Adams said he and another Whangarei investor were eventually paid back after a long dispute with the company.

"We were lucky that we didn't actually build the house and we got our money back, but we had to fight for it, believe me," he said.

Mr Hutchin denied there had been any issue with returning the deposit. "There was no battle whatsoever. We couldn't complete on time and they got their money back in full."

Mr Hutchin remains a director or shareholder of seven companies, including Wealth Buy Property Investments Limited, Wealth Buy Property Franchising Limited, and Dizzy Lizzy's ice cream parlour in Silverdale.