Warnings are being sounded to desperate buyers eyeing better looking prices on mortgagee sales.

In one case uncovered this week by the Herald on Sunday, owners of a million dollar house up for mortgagee sale are not allowing access to the home - meaning any purchaser would be buying the house without stetting foot inside.

The character home on 1138sqm in Mt Eden, Auckland has a CV of $1,180,000. It is owned by Auckland lawyer Edward Errol Johnston and his wife Wendy Ruth Johnston.

When the Herald on Sunday visited the house this week wheelie bins and deck chairs blocked access to the front door. We were asked to leave by a man on the property.


According to a mortgagee sale expert, people forced into such sales don't have to give access and the case highlights the high risks of buying a house through these sales.

"They don't need to give access and people sometimes buy a property without ever going inside," said Sirpa Gunn from The Conveyancing Shop.

Edward Johnston, a property lawyer, was found guilty last year of three charges of misconduct and two charges of unsatisfactory conduct. According to papers with the New Zealand Lawyers and Conveyancer Disciplinary Tribunal, Johnston had "personally borrowed $550,000 of his client's money without referring them for independent legal advice".

Johnston was fined $43,000 and promised to cease "client-to-client lending services".

In June this year one of his companies, Lauregan Holdings, was put into liquidation owing $1,545,452 to Westpac New Zealand Ltd.

The home he owns with his wife was put up for mortgagee sale months later and is being marketed by Barfoot and Thompson, which declined to comment.

Figures by Terralink International show there were 524 mortgagee sales in the first three months of this year - the highest first quarter number on record and almost six a day. New statistics are due out next month.

Mortgagee sales did not include chattels nor many of the standard clauses and warranties which protected purchasers in the usual sales and purchase agreements.


Gunn knew of cases where kitchens and bathrooms had been ripped out by disgruntled owners, upset they had lost their home.

He said sometimes places were gutted and new owners were left with a shell.