The couple denied any knowledge of the altered LIM until pleading guilty this week. Photo / Getty Images
A couple defrauded by an "upstanding" businessman who doctored a LIM report to sell his leaky house say they've been cheated out of their investment and their financial future thrown into doubt. Lane Nichols reports on how the once prominent figure's cunning ruse eventually unravelled.
Mandy Clough and Mark Dansey thought they'd done everything right.
After viewing a spacious North Shore home with stunning views of Rangitoto Island in 2015, they decided it was the perfect property for their blended family and agreed to put in a bid.
But when the auction was brought forward by Barfoot & Thompson later that week it left them just two days to carry out their due diligence.
"It was very tight," Dansey recalls. "We had to get our ducks in a row very quickly."
They arranged for a building inspection, spoke to their mortgage broker and forwarded a copy of the property's LIM report from Barfoot & Thompson's website to their lawyer for review.
With the LIM deemed "acceptable", they bought the property on Friday June 26, 2015 for $1.19m and went about their lives.
But four years later they received a bombshell from their own real estate agent after deciding to downsize and listing the house for sale.
The agent, also from Barfoot & Thompson, had ordered a copy of the LIM report from Auckland Council and discovered a concerning notification.
The report had reference to "major moisture-related cladding defects" - something Clough and Dansey had been oblivious to when buying the house, and a development that was likely to put off buyers and significantly devalue the price.
Shocked, Clough visited the council with the agent and asked to see the property file.
A staff member found the relevant documents "and that's when it all came to light".
"It was complete disbelief."
What would later emerge was the former homeowners had ordered their own copy of the LIM before listing the home for sale in 2015 then deliberately altered it to remove reference to the house suffering moisture defects.
They had then forwarded the "corrected" version to their Barfoot & Thompson agent Yvonne Wang with a note saying "you'll be relieved to hear the nasty thing has been removed".
A summary of facts obtained by the Weekend Herald shows a month earlier the husband and wife had written to Auckland Council asking for the moisture defect reference to be deleted, arguing it had been "remedied" and was therefore misleading.
When the council refused, the couple took matters into their own hands.
The dishonesty set off a chain of events that potentially cost Clough and Dansey hundreds of thousands of dollars and resulted in the husband and wife pleading guilty to fraud charges this week.
Distraught and confused after learning of the LIM issue, Clough and Dansey had little choice but to sell the property "as is" and take whatever they could get.
With its monolithic cladding and now publicly documented weather tightness problems, there was little interest. But a developer eventually bought the house for $1.165m - $25,000 less than Clough and Dansey paid four years earlier.
Before the LIM issue came to light, the property had been valued at between $1.3m and $1.5m - meaning the couple lost up to $335,000 in capital gain.
"We were absolutely heartbroken," Dansey says.
"We felt cheated, absolutely cheated, out of being able to maximise our investment."
Clough says it was "horrible" to learn they had been defrauded.
"We really did not believe that someone would fraudulently alter a LIM."
The disbelief turned to indignation when they googled the husband and discovered he was a respected businessman who had held public office and was now a top selling real estate agent for none other than Barfoot & Thompson.
"I looked online and thought, 'He's working for Barfoots, how can that be?'" Dansey says.
"He was professional and upstanding," Clough adds. "We looked at his profile and it just didn't match with what we'd uncovered. And the irony was he worked for Barfoot."
She admits fighting an urge to warn unsuspecting real estate customers by spray painting his billboards with the message: "Don't trust this man".
Clough and Dansey sought advice from their lawyer and briefly considered taking civil proceedings against the couple in a bid to recoup the money.
But they decided against it due to the "harrowing" prospect of huge legal bills with no guaranteed success, and likelihood the couple had placed their funds in a trust account or gifted money to their children.
"It was too much of an unknown and the stress would just be too high," Clough says.
In her opinion, the couple may "hide their money".
Instead they went to police.
Within months of the 2019 sale, the couple visited Auckland Central Police Station and reported the deception.
But it was nearly a year later that an officer from the North Shore contacted them and took up the case.
Constable Glen Randall apologised for the delay and got Clough in for a three-hour interview. Ten days later - on May 26, 2020 - police swooped on the former owners' new property, arrested them and seized their laptop.
Analysis of the device found evidence of the doctored LIM being sent to Wang from the couple's shared email address along with the incriminating "nasty thing" emails.
Clough said she felt "pretty numb" after learning of the deception.
"It was obvious they'd done it right from the start.
"It's the entitlement of a wealthy, successful businessman who just sees himself as above reproach. I was just really concerned that he'd get off and not be held accountable.
"My experience of them is these upstanding people and I can't quite reconcile their actions to that impression.
In Clough's opinion, the man saw himself as above the law "and that's just abhorrent to me".
Clough and Dansey say they had earlier met the couple, who appeared to be "nice, kind, helpful people".
After taking possession of the home, Clough and Dansey found the couple had left them helpful notes about the best local butcher, which electrician they'd used, and information about a specialised roof treatment.
They both find this apparent kindness difficult to understand given the couple had just hoodwinked them out of any potential capital gain.
They believe the deception was calculated and premeditated.
Dansey says that in his opinion: "He looked at the LIM and thought, 'God, that will put buyers off. Let's just cover it up'."
The couple were jointly charged in 2020 with using an altered document with intent to defraud.
They were set to defend the charges at a trial on August 1 but instead pleaded guilty at an arraignment hearing this week.
Clough and Dansey say the effects of the couple's "devious" tactics and greed have been significant and far reaching.
After selling the home for a loss, they had to buy in Hobsonville, much further out from the city than intended.
They were also forced into a much smaller property than they had hoped, meaning their children are now unable to live with them.
Their mortgage is much higher than it would have been had the LIM not been "twinked out" by the couple.
Clough says that without the deception "we would have had some choice".
"How I feel now is that when we retire we can't stay in Auckland. It's made a significant difference to our future.
"We don't have peace of mind anymore."
Clough wonders how much the couple have spent on lawyers in the past two years.
"It's very much a kick in the teeth."
Despite what they've been through, Clough is determined not to let the ordeal "rob me of enjoying my life".
They are adamant they would never have bought the property had they known about the weather tightness issue on the LIM.
With the benefit of hindsight, Clough wishes they had not rushed the due diligence process once the auction was brought forward.
"If only we'd made a different decision and just walked away."
And in a strange twist, they say there's no evidence the property ever actually leaked.
They understand a previous owner had the notification added in 2004 in case they ever wanted to make a weathertightness claim against the council.
In the four years they lived at the property, it was dry as a bone.
After being charged in 2020, the husband continued selling homes for almost a year.
Clough and Dansey are appalled the husband was able to continue working as a real estate agent while facing potential jail time for falsifying property documents.
The couple say the case raises questions about Wang's potential involvement.
They feel they should have been able to rely on the authenticity of a LIM report supplied by Barfoot & Thompson.
They also question why a reputable realty firm appears to have allowed a forged document supplied by a vendor to be uploaded to its website and made available to unsuspecting buyers.
And despite being ripped off by the couple, Clough doesn't want to see them incarcerated.
"It's not something that I would wish for them.
"We've been very active with wanting them to be held accountable for their actions. But at no point did Mark or I ever anticipate that it would involve them being imprisoned."
Dansey adds: "All we saw was that the LIM was whited out. We didn't know that was a crime. We thought, 'God that's pretty devious, that's bad'. But we didn't know they'd be arrested."
The defendants stood side by side in the dock on Thursday where they both pleaded guilty and were convicted.
The pair wore dark, professional suits, and the woman had manicured pink nails, jewellery and a leather handbag.
They are on bail and will apply for permanent name suppression when they're sentenced in October.
Barfoot & Thompson director Peter Thompson declined to comment while the matter was still before the courts and suppressions orders remained in place.
"One patient was assessed at the scene as being in a minor condition."