New buyers think their houses are being built, but they aren’t
First-home buyers who bought into a $37 million affordable housing development in west Auckland might think they are watching their houses being built, but they have actually been watching a completely different project in motion.
The buyers lodged deposits with property developer Reed Myers last year, and according to their original agreements many of them are scheduled to move into their houses at The Rise on Triangle Rd in Massey this year.
Buyers have been frustrated by the delays, but in recent months their spirits have been buoyed by diggers and equipment appearing on site.
One buyer, who did not want to be named, because he is concerned it could affect his future relations with Reed Myers, says he is on antidepressants, and has been experiencing sleepless nights because of the ordeal.
But he does believe the company’s assurances that the development will be built.
‘‘Obviously I am angry, but what can I do? . . . I need my development. I need my house to live in.’’
However, property investors Eddie Simpson and Annie Zaloum, who own the land at Triangle Rd, say the Reed Myers development there is dead.
They say all those buyers who think they are witnessing their homes being built are actually watching work take place on a completely different project.
‘‘We’ve got nothing to do with Reed Myers,’’ Simpson says. ‘‘Nobody wants to buy the land, so we’re going to have to break it up and sell it on. That’s what we’re going to do.
‘‘That’s going to be another year away before that happens.’’
Simpson says they bought the land as part of an agreement with Peter Chevin, a bankrupt property developer with several convictions who is barred from directing a company until October 2026.
Simpson’s company had loaned Triangle Glade Ltd – a subsidiary of Reed Myers running the Triangle Rd development – a large sum of money to allow Triangle Glade to get its resource consent on the project. Simpson was worried Chevin would be unable to repay the loan if he was unable to buy the Triangle Rd site.
He says the handshake arrangement lapsed for good in September after Chevin could not come up with money for the land despite numerous time extensions.
However, updates on the project from Reed Myers claim the opposite to what Simpson says.
For much of this year its website had a ‘‘sold out’’ banner running across its listing for The Rise.
On October 19 Reed Myers announced on Facebook that land use consents for Triangle Rd were ‘‘expected to be [finalised] within 2 weeks’’.
Then in November it alerted buyers that it would be ‘‘requesting from each purchaser a 12-month extension to your current sunset clause’’.
However, the company makes no mention of the project having been cancelled, or that the landowner has decided to pursue their own project.
In April registered financial adviser Sandy Williams, of One Stop Property Shop, who has sold homes at The Rise, wrote on Facebook that ‘‘one of the shareholders are using their funds to keep the development moving’’, and also said Reed Myers was still developing at the site.
All of these updates were given after the end of September, when Simpson says he made it clear the land was no longer available to Reed Myers and Chevin.
Some buyers say their lawyers have informed them there are no major red flags around the development because their deposits are sitting in a trust account, a resource consent has been granted on the site, and there is nothing out of the ordinary with the agreements they have signed.
In the property development industry, evidence of buyer deposits make it easier for a company like Reed Myers to access finance, whether that be in the form of a loan from someone like Simpson, or investment funds from people like Axel Henriksen – a former Reed Myers investor.
Henriksen invested in another Reed Myers development on Portman Rd in Mt Wellington, but was unaware of Chevin’s criminal history before he did.
He successfully went to court to try to freeze the funds he had invested with them.
The judge in the case agreed the funds were at risk and noted there was ‘‘evidence that monies paid to the defendant have been used to pay the personal expenses of Mr Chevin and his family’’.
Chevin and Reed Myers – who both use the law firm Hucker and Associates for their responses – have not provided a response to a list of questions about the development at Triangle Rd.
Simpson says they made the loan because they were introduced to Chevin by a trusted financial adviser, and did not discover his extensive history of bankruptcies and criminal convictions until later on. ‘‘I’ve got a lot of trust in people that you’re dealing with like that, and you don’t expect that the guy’s actually lying to you.’’
Simpson says Chevin is the only person at Reed Myers he has dealt with, and he did not even know Chevin was involved with Reed Myers until somewhere around the middle of last year.
Chevin was initially supposed to buy the property off Simpson and Zaloum two weeks after they bought the property in February last year.
More weeks passed, then months, with Chevin producing a new excuse each time for why the money could not be paid.
Finally, Simpson says they gave Chevin a deadline of August to make payment on the land, this date was extended until the end of September because of the Delta lockdown.
When the September date passed, Simpson decided to draw a line under the whole saga and try to make some of his money back selling the land to someone else.
‘‘From that day we’ve continued to get resource consent [for civil works] . . . he [Chevin] hadn’t had anything, so goodness knows what he’s done with our money.’’
The work being done on the site is around civil works, to raise the value of the land when it is sold.
Auckland Council manager resource consents Ian Dobson says a resource consent application associated with earthworks for a 57-unit subdivision was originally lodged in October 2018 then put on hold in December 2018 with the council ‘‘awaiting further information from the applicant’’.
The application was taken off hold on February 23 of this year, after Simpson decided to press ahead with civil works so that he could sell the land, and had been granted by the end of March.
Chevin did try to revive negotiations over the land in February by offering to pay for the multimillion dollar property in $100,000 instalments.
‘‘Eddie. Hello. Totally understand that all communications are to go through the lawyers,’’ Chevin wrote in a text message.
‘‘Next week your lawyer will receive from Reed Myers lawyer a confirmation of a share purchase schedule that has a number of $100,000 [instalments] being paid very soon and progressively.’’
However, Simpson’s reply left no room for doubt that a future deal was off the table.
‘‘Hi Peter, I am not sure exactly what you refer to. It looks like you are referring to Triangle. Triangle is not available, we have moved on.’’
Simpson says his company Albion Developments does own a small share of Triangle Glade Ltd, but he alleges this was offered as partpayment of Chevin’s loan.
As far as he is concerned Reed Myers and Triangle Glade Limited should have returned buyer deposits and informed buyers that the development was no longer going ahead.
‘‘I would have assumed that had happened by now.’’
First-home buyers who bought into an affordable housing development haven’t been told the person who owns the land put a stop to their development last year. Dileepa Fonseka reports. ‘I’ve got a lot of trust in people that you’re dealing with like that, and you don’t expect that the guy’s actually lying to you.’ EDDIE SIMPSON, PROPERTY INVESTOR