The Glasshouse at 33-39 Okoka Rd, on Waiheke Island. Photo / Suppied
The Glasshouse at 33-39 Okoka Rd, on Waiheke Island. Photo / Suppied
A wealthy American couple were forced to sell a luxury Waiheke property for a huge loss after breaching foreign buyer rules designed to protect sensitive Kiwi land.
Michael Rems and Julie O'Shea bought the six-bedroom, five-bathroom Glasshouse on Waiheke in June 2015 for $3.6 million. It is described as having"breathtaking" views towards Auckland and is rented for $1800 a night.
The couple obtained Overseas Investment Office (OIO) approval for the purchase. A condition of the sale was that they move to New Zealand within three years.
But they had to sell the "exclusive holiday home" after breaching the Overseas Investment Act (OIA), losing more than $1.2m on the deal, documents from the OIO reveal.
The Herald reported in November 2018 that the couple had relisted the property for $2.89m and were also offloading a $6m-plus Remuera penthouse they had lovingly renovated without having slept a night inside it.
They blamed a change in family circumstances.
An OIO investigation report dated June 2018, obtained by the Herald under the Official Information Act, shows the couple failed to move to New Zealand and were therefore in breach of their consent conditions for the Waiheke home.
A wealthy American couple bought the exclusive Waiheke holiday home in June 2015 but were forced to sell it in December 2018. Photo / Supplied
It said the couple had taken voluntary steps to sell the property "in expectation that the OIO will require them to dispose of it".
Investigators were to issue notice to the couple that they were in breach of OIA rules and must dispose of the "exclusive holiday home" within 18 months, the report said.
They recommended "not to take any enforcement action at this time", but to review that position should Rems and O'Shea fail to sell the property.
It is the latest in string of enforcement actions taken by the OIO against rich overseas land owners.
And a Korean doctor was convicted this month and fined $100,000 after he and his lawyer concocted a plan to hoodwink the OIO over the purchase of a $3m Auckland property.
The Waiheke Glasshouse sits on more than half a hectare of land at Okoka Rd near Omiha and is listed as sensitive under the OIA.
The report says Rems and O'Shea lived in New York when the consent was granted. They fell in love with New Zealand after visiting in 2013 and decided to apply to reside and work here.
However, a letter to the OIO from Auckland law firm Hesketh Henry dated June 5, 2018 stated the couple's circumstances had changed and they'd been unable to spend the required time in New Zealand.
The luxury home comes with an infinity pool, wine cellar and overlooks rolling hills, vineyards and the Hauraki Gulf. Photo / Supplied
They had therefore taken steps to sell the property.
"No further explanation was provided concerning steps they had already taken or the change of circumstance," the OIO report says.
Property records show the Glasshouse was eventually sold in December 2018 to Richard Acke and Clifton Hart for $2.365m.
It sold again in January this year to Jake Knight Foundation Limited, which is owned by Justin and Jessica Knight, who are both listed as living in Singapore.
The latest transaction is yet to settle and there is no listed price.
Meanwhile, the Remuera penthouse has still not sold.
The luxury home features marble benchtops, brass fittings and a butler's pantry with its own entrance from the elevator lobby so caterers can come and go discreetly during parties. It is brand new and has never been lived in.
The luxury Remuera penthouse features marble benches, brass fittings, walk in wardrobes and a butler's pantry. Photo / Dean Purcell
Bayleys agent Joe Telford told the Herald Rems and O'Shea put their hearts into creating a family feel in the 380sq m pad but were selling due to family reasons.
He said the Remuera property was not subject to OIA rules and was purchased legitimately by the couple before legislation banning foreign buyers came into force in October 2018.
It was being sold by negotiation but he was "encouraging buyers with budgets north of $6m".
"Obviously we're looking for a specific buyer. We've had good interest and offers, but we haven't quite got someone across the line."
OIO group manager Vanessa Horne said Rems and O'Shea did not need consent to acquire the apartment because it was not "sensitive land" at the time they bought it.
"As a result, they are not required to sell the property."
But recent changes to the OIA meant foreign investors now needed consent to purchase residential land.
"This means that if another overseas investor wants to purchase the apartment, they would need consent from the Overseas Investment Office."
The American couple are also selling their luxury penthouse in Remuera's St Marks development which they bought for more than $6 million. Photo / Dean Purcell
The Herald has sought comment from Rems and O'Shea.
