Several owners of properties in an Auckland housing complex are accused of attempting to "lead astray" potential buyers by covering up documents outlining potential issues with their properties and a $2 million project to fix them.
Sally*, who wished to remain anonymous, told Newshub they rent a property in Ellerslie's Ascot Villas and received a letter on Friday to residents and owners from four people who own properties in the complex.
In the note, the letter writers said they were unhappy with the body corporate's proposed $2 million repainting and resurfacing project which was outlined at a recent annual general meeting (AGM) in a Chairman's Report.
The letter said the project has caused "considerable distress" for owners worried about having to stump up the sum for the fixes and those wanting to sell their properties.
It said some potential buyers have been put off after receiving the minutes from the recent AGM.
"The impact on the owner's sales campaign has been devastating. Following on from this there has been considerable adverse impact on market sentiment and degradation of the attractiveness of properties in Ascot Villas.
"This along with the potential for other owners to now seek an urgent sale of their properties and multiple sales at the same time, will create an overall scenario that is of serious concern and needs a proactive response by the body corporate."
The letter is seeking the Body Corporate committee to take action including:
"The withdrawal of the present AGM minutes so they are not circulated to any prospective future purchasers of any property in the complex.
"A number of corrections to the existing content of the AGM minutes as well as coverage of a number of conversations and discussions that were not included in the present minutes.
"The withdrawal of the Chairman's report and replacement by a less inflammatory report that does not mention either any indicative costs or specific references to resurfacing as distinct to ongoing maintenance and repairs.
"A basis for the resurfacing and repainting project, including what if any reports as to the state of the present surfaces and resultant quotes obtained to justify a project of such magnitude."
'Shocked'
Sally* told Newshub they were "quite shocked" when they received the letter which they believe shows the owners are attempting to forcibly alter the minutes and report to intentionally mislead potential purchasers.
"It seems very deceptive that a group of owners would attempt to hide that information from potential buyers," they told Newshub.
"There is currently one unit for sale in the complex and I can't help but wonder whether any potential buyers have been led astray.
"To me, this seems wrong, plain and simple, and shows the power that a crippling housing economy has when a group of owners think they can do this."
One property was for sale in the complex as of Tuesday, however, it is not believed to be owned by any of the letter writers.
Newshub contacted the four people who signed off the letter, but they declined to comment.
Lawyers respond
Renee Jensen, a senior associate at Wilson McKay Lawyers, told Newshub the Unit Titles Act 2010 contains a disclosure regime to ensure prospective buyers get important information relating to the property and the complex.
Therefore the vendor must provide a pre-contract disclosure statement, which outlines basic information about unit title ownership, along with a pre-settlement disclosure statement about the contributions levied by the Body Corporate, whether any levies are unpaid by the seller, whether any costs relating to repairs to the building or other infrastructure are outstanding and if the body corporate has set an additional levy for repairs and maintenance.
"In addition, it is standard practice for a buyer's solicitor to request the last three to five years of the Body Corporate AGM minutes as well as the long-term maintenance plan to ascertain matters affecting the complex, including upcoming repairs and maintenance. These can be at significant expense for apartment owners.
"Whilst we cannot comment on an individual case, if either the body corporate and/or a vendor is aware of known defects and deliberately conceals disclosure of this information to a prospective buyer, then the purchaser is likely to have recourse against the vendor, and possibly the body corporate in relation to such non-disclosure."
John Greenwood, a consultant at law firm Greenwood Roche, and Jennifer Campion, a University of Waikato lecturer in Law, both told Newshub minutes should provide a "factual and accurate" summary of the discussion and decisions made.
"While there's a process to confirm minutes at subsequent meetings (through which there's an opportunity to correct the minutes), this is meant to ensure minutes are accurate - not to alter the record, especially for any deceptive purposes," Campion said.
