Couple sue big real estate firm for $280k

Author
Lane Nichols, NZ Herald,
Section
Business,
Publish Date
Saturday, 2 September 2017, 9:17AM
Demand for housing in Auckland is high. (Photo: File)
Demand for housing in Auckland is high. (Photo: File)

A young family who unwittingly bought a home next door to a drug and alcohol rehab centre that houses recovering addicts and former prison inmates are suing the nation's biggest real estate company for more than $280,000.

The couple have spoken of the huge emotional and financial toll of taking legal proceedings.

"This has been devastating for us," the husband said.

"We are a single income family trying to support three kids.

"It's consumed us. We've never been able to be fully happy in this house because of the situation next door, and the drain and emotional toll the court case has taken on us is unbelievable."

Harcourts is defending the case, arguing the couple were not financially disadvantaged and paid fair market value for the home.

The company's valuer says a "prudent" buyer should have undertaken proper due diligence on the property next door.

The Weekend Herald revealed in December that top Harcourts agent Michael Robson marketed the couple's Mt Eden property as "family perfection" when it was listed for sale in January 2014. He later admitted knowing about the adjoining Wings Trust rehab centre but deliberately chose not to inform the buyers before they bought it at auction for $1.325 million.

Robson later apologised to the family. He was found guilty of unsatisfactory conduct before the Real Estate Agents Authority for withholding the information, censured and fined $5000. His Mt Eden agency, Charlton Realty Ltd, was also censured and fined.

The buyers, who have spoken for the first time, say they were horrified to learn of the addiction centre just days before settlement.

They say they would have backed out of the deal but had already sold their previous home unconditionally.

"With full disclosure I would have run a mile," the husband said. "And if we put it on the market with full disclosure people will do the same thing.

"We are a good Kiwi family trying to get on in life.

"It just stuns me that they think they've done nothing wrong."

The family filed proceedings last year against Robson and his employer with the High Court, alleging negligence and breach of the Fair Trading Act. Court documents include a valuation report by Churton Valuation Services, commissioned by the family in June this year to quantify their estimated loss.

The report notes the centre's clients include criminal offenders "with addictions to alcohol, cannabis, minor tranquillisers, opiates, hallucinogens, amphetamine-like compounds and/or solvents".

It estimates disclosure of the centre to prospective buyers would result in a price discount of 10-15 per cent due to the "impact of perceived threats".

"There would, in my opinion, be significant buyer resistance, particularly with the knowledge that at least some of the occupants would or could have been referred to the property by the court system.

"There would, or could, be a perception of potential danger either in a physical sense or, in terms of the future security of a major asset ... on resale, where the use of the adjoining property would need to be advised."

The couple, who still live in the home, had seen uniformed police next door, including plain-clothed officers in stab-proof vests. They had also witnessed firefighters responding to a blaze caused by a discarded cigarette and seen occupants wearing "monitored bracelets".

"Most potential purchasers would consider this an issue of importance," the valuer's report said.

The report estimated the financial impact of the centre on the current market value of the couple's property was a "diminution" of $225,000.

A statement of claim filed by the couple's lawyer, Adina Thorn, says they told Robson a safe and secure property was imperative for the family, as the husband was often overseas on business. Had they been made aware of the addiction centre the family would have abandoned the sale or "incorporated a discount in the purchase price to reflect the uncertainty and risks".

They are seeking $230,000 in damages, plus $50,000 for distress, at least four years' interest, and costs.

Harcourts declined to comment yesterday. However, a Harcourts-commissioned valuation report by Evan Gamby found the family had suffered no financial loss.

It says the centre houses addicts that have completed their treatment, no parties are allowed and occupants are not permitted to have alcohol or drugs on the property.

Gamby found the centre's existence was inconsequential to what buyers would pay for the couple's home, when weighed against positive factors such as demand for housing and the desire to purchase in a good school zone.

Gamby's report added that the centre was owned by Housing New Zealand, which was "readily discoverable" to buyers.

In a statement, Robson said Wings Trust was a highly regarded social enterprise that had delivered safe, evidence-based community services in Auckland for 30 years.

He added that Harcourts offered to re-list the property at no charge, but the offer was declined.

The case is set down for a formal hearing next year.

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