Mortgagee price mistake riles ex-owner

Janine Wallace is suing the BNZ. Photo / Doug Sherring

An Auckland woman claims a real estate agent bought her architecturally acclaimed apartment in a mortgagee tender for $745,000 less than she paid for it after the agent's company, Bayleys, incorrectly advertised it.

Janine Wallace is now facing bankruptcy after the BNZ recalled three loans on properties she owned, including the apartment in Shed 24 on Princes Wharf.

She is suing the bank for damages.

Wallace claims a four-week marketing campaign by Bayleys' city branch was flawed because of several errors in the advertisements, including that the apartment had two bedrooms not three and was on a lower floor.

Wallace is a leading real estate agent who previously worked for Bayleys' city office.

Her apartment, No 52, sold in June under mortgagee tender for $705,000 - $430,000 below its capital valuation of $1.135 million and $745,000 below the $1.45m she paid for it in 2006.

In the same month, a smaller apartment on the same floor, No 48, sold for $1.345m - $340,000 more than its CV of $1.005m, through Crockers Realty.

At the time of the sale, apartment 48 was being rented by a Bayleys Waiheke Island agent and his wife. They then bought Wallace's apartment.

Wallace said apartment 48 was less valuable because it was smaller, it had not been refurbished since it was built 10 years ago, it had only a 50-year lease and was on the south end of Shed 24.

By comparison, Wallace said, her apartment was on the northern end, had been extensively refurbished in 2005 - a fit-out that won local and international awards - and was on a more valuable 95-year lease. However, she said the smaller apartment was sold with a carpark, which hers wasn't.

Wallace questions why an inferior apartment was sold for $703,655 more than hers. "That buyer would have been better off buying my apartment, if it had been advertised correctly."

A month after the two sixth-floor apartments sold, a neighbouring apartment, No 53, sold for $2.5m.

Wallace said high-quality large apartments were rare in the inner city and that was why the prices held up under a normal sale.

Wallace, who bought her sixth-floor apartment for $1.45 million three years ago, was evicted in July after Bayleys sold the apartment for $705,000 to the Waiheke agent. Wallace, who now runs her own business, NZ Properties International Ltd, is devastated by the price difference. She claims Bayleys published "misleading" and inaccurate descriptions of her apartment during most of the four-week marketing campaign, which included advertisements in the New Zealand Herald, the Herald on Sunday, the Open2View website, Property Press, Trade Me and two international websites.