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My questions are, has anyone else had a similar experience in Papamoa

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Rachelle Pelkman

We entered into a house and land package in Papamoa. This package was arranged by a local building firm which is part of a nationwide franchise. We paid a 10% deposit for the section and a 10% deposit to the building company for the build. A Masterbuild 10-year guarantee was supposed to have been taken out as part of the contract, which would have given us some protection for the deposit. We signed the Masterbuild guarantee application when completing the other documentation. The building company never filed the Masterbuild 10-year guarantee. The section had been sold twice with the previous owner not recorded as the current owner on the title. When our lawyer tried to settle the section, the lawyer acting for the developer said he was unable to settle and despite many emails and phone calls our lawyer received no replies and was unable to ascertain what the hold up was. We only found out what had happened when the barrister for the first purchaser contacted us and explained what had happened. We understand there are other sections in this subdivision with the same issues – i.e. they have been sold twice. Our lawyer then issued a settlement notice giving the developer 12 working days to settle – he did not, so our purchase of the section was at an end. My lawyer spent a great deal of time trying to get the deposit on the section back and eventually this was successful less a very large legal bill. Unfortunately the building company refuses to refund any part of the deposit for the build or even account for what they may have spent the deposit on. They simply regard it as a windfall – have a nice life, Merry Christmas. I have contacted the head franchisee – they don’t give a damn. I am under the impression the building firm was aware of similar issues with sections in this subdivision before our contract went pear-shaped. I have contacted Master Builders Association who have suggested using Fairway Resolution, but this requires the buy in of the building firm, who to date have been aggressive, totally unreasonable and unresponsive. My next step will be the Disputes Tribunal, which is limited to $30,000, but anything is better than nothing. I really think I am totally an innocent party here, I trusted the building firm, they sold me the package, including the land. I was totally shafted by them, with them capitalising on the situation they , probably knowingly, put me in. My questions are, has anyone else had a similar experience in Papamoa? Please get in touch with me as it would help with the claim with the Disputes Tribunal. Why is this building firm able to use the Master Builders brand, surely the Master Build brand should mean something, why is the Master Builders Association not taking a keener interest in what has happened to me. Most professional organisations monitor the actions of their members and weed out those who do not offer a service which is up to the standards of the professional body. Why is it that I have what it seems as no rights, when purchasing a house and land package, compared to purchasing an item under the Sale of Goods Act. Why can a building company sell packages with total impunity when at least Real Estate Agents have a code of conduct and an Act which covers their actions. It is probably the biggest purchase anyone can make and yet there is no protection and it seems nobody cares, welcome to the Wild West.
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Chris C

Hi Rachelle, I feel great sympathy for your situation. When I have written before about what a shambles the NZ house building often seems to be, others have implied it’s not that bad. Of course I don’t have statistics on how many builds go badly wrong. As opposed to just slightly wrong, which is almost standard for construction projects throughout the world. (You just need to open any newspaper, and that’s for Government/Council jobs being designed and supervised by professional architects/engineers etc). But judging by this blog quite a few. When you have individual houses being built for inexperienced clients, by builders who know exactly how to take advantage of them, it is often, as you say, like the Wild West. But to get to your particular case, which may help others avoid a similar situation, I have a few questions/comments: It’s always a good idea to check with MB whether the builder has arranged your guarantee, if you don’t the paperwork back from MB. I would suggest people also check with the builder’s insurance company or broker to make sure they have the insurance required by the contract. How did you manage to pay a 10% deposit for the land before your solicitor had checked who owned it? Whether you can get anything back from the build deposit may depend on what your contract says, but very likely it will be vague enough on what the builder can charge for ‘work to date’ to allow them to keep most of it. I think you should never go with a franchise builder (who is obviously charging you extra to cover his franchise fees) if you are not getting anything for it, other than the ads you saw in the media giving you the impression the franchisor will have your back every step of the way (Yeah, right, to quote the Tui ad). I notice you have not said who this franchisor is. Is that because you are afraid they will take some action against you? But if everything you said is factual what action can they take?
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Rachelle P

Thanks Chris The name of the developer was on the title and the developer was also the seller in the Agreement for Sale & Purchase, we had no idea someone else had purchased the property before title was issued in 2019 and was still not recorded as the correct owner in 2020. We signed the Masterbuild guarantee when we signed the build contract. In hindsight we should not have paid the deposit until the Masterbuild guarantee was received back. Basically we trusted the builder and also believed that because it was a franchise the master franchisee was giving us extra protection – we could not have got it more wrong. Basically I am trying to find out who else in this subdivision was caught. And also why does the Master Builders Association not care more about its branding?
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