A South Auckland property development has gone into receivership leaving people who had signed contracts for hundreds of new homes "in the lurch" and panicking about their future.
But receivers are assuring their cash - including those with homes purchased under the KiwiBuild scheme - is safe and they are working with the intention of completing the development.
Ormiston Rise is a planned community in Totara Park, made up of more than 700 freehold terrace, duplex and standalone homes, which come with the option of three, four or five spacious bedrooms, plus a minimum of two bathrooms.
The development was set to be delivered in stages and is a combination of KiwiBuild and private sales.
One couple who had purchased their first home and were scheduled to move in in August were horrified to receive an email at 5.30pm yesterday from receivers.
They were desperate for more information and answers but had not yet been able to make contact with anyone.
The email sent to people with sales and purchase agreements with Ormiston rise Limited stated that yesterday receivers at Calibre Partners were appointed.
"This letter is to confirm any rights you have under the contract are not impacted by the receivership," the email stated.
"And, your contract will continue to be held in on trust with Ormiston's solicitors per the terms of the contract.
"Over the coming weeks we will be working closely with Ormiston's lenders to develop a plan for the future of the development.
"We will be in touch with you as soon as we have a further update."
Affected people were told to contact their solicitor for more information.
Receiver Neale Jackson provided further information about the situation this afternoon.
"The receivers have been appointed to Ormiston Rise Ltd on Friday evening and Ormiston Rise Developments Ltd on Saturday morning after the consortium behind the project and its financing partners became concerned about construction progress," he said in a statement.
"Decisions about what happens to the Ormiston Rise development next will be made by the receivers.
"Financing partners of the project are indicating they would like to engage with the
receivers so the project can be completed as planned."
Jackson reassured buyers that receivership did not affect their contracts.
"Their contracts and their deposits are held in a trust fund that is also unaffected by the receivership," he said.
"The receivers intend to provide buyers with further information as soon as they can."
Jackson said around 191 homes were due to be delivered in the first phase of the project, beginning with the first homes in the third quarter of 2021.
"Some of those homes have been completed and will be ready for occupation once compliance certification is obtained."
A statement released by the directors of Ormiston Rise on Saturday night said it sympathised with buyers.
Directors were supportive of the financing partners' decision to appoint receivers,
"We see this step as the most appropriate way to protect the interests of buyers and everyone who has a stake in the Ormiston Rise community in circumstances where both directors and financing partners lost confidence in construction progress on the project," it said.
"We intend to cooperate fully with receivers.
"While we fully sympathise with buyers, who will find this news unsettling, we continue to strongly believe in the community that is being created at Ormiston Rise and that it can be delivered. We will do everything we can to help make that happen."
A man who went unconditional on his property in March and was due to move in in August said the email came as a shock.
"We don't know what's happening," he said on Friday night.
"We [are] completely in the lurch.
"There's an online community for the homeowners, the KiwiBuild home owners, and everyone is in the same sort of position, they don't know what's happening."
He hoped the situation would be resolved quickly.
"One of the reasons why we went with KiwiBuild is because it is run by the Government. It should be safe," he said.
"If we can't get a KiwiBuild property, we won't be able to buy. It's the only way in [into the housing market] ... which is completely stuffed."
The man was even more upset as he had taken his grandmother to see the development at Easter.
"We wanted to show her the styling [of house] we were getting into because she's 93 years old and one of her concerns is that she wouldn't be able to see the property and also her other concern was that we would never get into property," he said.