Buyers of high-rise Auckland apartments The Antipodean are complaining about settlement requests this month, saying the pandemic means they can't get inside to see what they are buying.
Three buyers contacted the Herald, saying although completion of the big new block was more than two years late, they were now being asked to settle their purchases in just over a week.
The big block at 39 Beach Rd is in the CBD behind the three Scene apartment blocks.
The buyers complained that lawyers for developer Paul Doole had formally requested settlement on April 15 and they are resisting that.
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"That's right in the middle of lockdown," one buyer complained. "Purchasers can't even view the completed development to understand if it has been built in accordance with the sale and purchase agreement," said one owner, who was buying a unit for more than $1m.
"I think most people would find this extraordinary, given that the development is two-and-a-half years late in its delivery. Yet the developer chooses a time like this to action settlements, which I'm sure many [pre-purchasers will find] difficult," the unit buyer said.
Another buyer said the inability to get inside the unit left her unsure that what she expected had actually been built.
The Real Estate Institute said around $3.6b of national property sales have been frozen due to the month-long alert level 4. That's the average value of monthly sales in the last three years for this time of the year, chief executive Bindi Norwell said.
But John Heimsath, a partner at law firm Heimsath Alexander which acts for The Antipodean, defended the request to settle which he said fulfilled the terms of contacts.
"The development finance for this building is significant. Commitments have been made on both sides of the situation - purchasers to the vendor and vendor to the bank, builders, employees, contractors, consultants etc," the lawyer said.
The time had arrived for a critical exchange to occur and pre-purchasers to pay, despite level 4 alert, and the buyers were on the winning side of the formula, he indicated.
"Hopefully, purchasers have been planning to meet this obligation for a long time. The jammed construction market has caused delays which has added to the cost of the building to the developer's detriment. Most purchasers have enjoyed an increase in the value of their apartments over the same period. The delay has also extended the time for purchasers to prepare their finance," Heimsath said.
The lockdown timing could not be worse in terms of being able to live in or get rental from the units, he acknowledged, but that was true for both Doole and the buyers. Doole would retain a large number of units in the building, the lawyer said.
The pre-inspection process has been interrupted but the purchasers' interests were protected by the terms of the sale and purchase agreements that give them a post-settlement maintenance period. So Doole had to fix any problems, the lawyer stressed.
"The building has obtained its practical completion certificate from the engineer and its code compliance from Auckland Council. Pre-inspection is not a condition of the agreement and there is nothing that could be identified in pre-inspections that can't be dealt with after settlement. It is not a good reason to defer settlement. The purchasers' ability to use its contractual inspection right is frustrated by the lockdown," Heimsath said.
To help, the developer had put various purchasers in touch with valuers able to complete valuations off the plans, not requiring a physical inspection of the unit until after settlement, he said.
"They have also offered a video inspection of the inside of the unit from the on-site manager who is resident in the building, obviously while complying with safe practices," the lawyer said.
"The lockdown affects everyone. The purchasers are not alone in wanting someone to relieve them of their commitments. Many of us feel this pain and we truly sympathise. Thankfully most of the purchasers appear to be getting on with the required settlement process despite these difficult circumstances," the lawyer stressed.