REAL not slick enough in city

By IRENE CHAPPLE

The Auckland arm of the reborn REAL is to be discarded after barely eight months in operation.

Its demise follows the original REAL being wound up in February.

A board meeting of the Auckland REAL next week will officially confirm the operation's closure.

Chairman Don Thomas, principal of Thomas and Co lawyers, said he had lost "tens of thousands" of dollars on REAL's double-whammy collapse.

Auckland REAL would try to sell its listed houses then pass the remainder to "reliable" real estate agents, he said.

The Auckland arm is run through Auckland Real Estate Holdings, which owns, with other regional representatives, shell company Real Brandz NZ.

Real Brandz NZ bought the REAL brand from the receivers of the original company.

Auckland Real Estate Holdings would not be wound up, said Mr Thomas. It would continue to hold its Real Brandz NZ shares in case the concept could be rejuvenated.

ASB Bank holds an unsatisfied debenture over Auckland Real Estate Holdings for an undetailed sum but with a priority amount of just $300,000. The loan could be anything up to that figure.

Shareholder and director Arthur Loo, a principal at Loo & Koo, said the company would sell assets in its offices at New Lynn, Balmoral and Manurewa to cover the debt.

He said the shareholders - 10 lawyers - would be liable for any outstanding amount.

"A lot depends on the realisation of the assets. We are not expecting anybody to lose money on this."

The venture has more than 100 homes listed for sale, he said. Homeowners would not lose out because their pre-sale advertising was paid for by REAL.

"We were making sales but it wasn't enough to cover our overheads. The market is just dead, and we couldn't see it changing."

There are up to 16 staff at the three offices. Mr Koo said he did not know how many were on retainers and how many were on commission only.

But the company would fulfil its obligations to those people, he said.

Meanwhile, the Whangarei arm of REAL has tripled its listings since it began operations six months ago, said lawyer Ian Reeves.

The Northland operation did not need to cover large areas, which was a problem plaguing Auckland, he said.

The original REAL's Auckland venture had pulled down the national operation, said Mr Reeves.

REAL was launched by lawyers in anticipation of a regulatory regime being pushed by Justice Minister Phil Goff.

Mr Goff wants to sweep aside the legal and real estate sector's respective monopolies on conveyancing and property sales, and is drafting the proposal into a Legal Professions bill.

REAL has fought criticism from lawyers who say that those involved lose their ability to provide independent legal advice to clients.