Wednesday, September 18, 2019
“We are residents. Are we eligible to buy a house yet,” was the first question that a Kiwi-Indian couple asked as a routine to everyone they interacted in their house hunt earlier this year.
“Yes you can,” was an oft-repeated assuring replies that they heard from the most of the real-estate agents and the solicitor that eventually assisted them in their first home buying experience.
Yet little did the poor couple realised that not only they will be denied of their much cherished dream of buying first home, in full public display of their parents visiting from overseas to celebrate the occasion, but also forcing the entire family to almost homelessness as they were told right on the day they were to collect keys and move in the house that they were not eligible to buy property after the recently introduced foreign buyers ban in the country.
The story of Aakansha Sharma, 31, and her husband Jayant Sharma, 32, who first arrived in the country in 2015 on student and work visa respectively, and working their way up to get residency in the country in 2018, is a classic example of the dearth of accurate information and the level of confusion that is prevailing after the government had introduced foreign buyers ban after much fanfare.
The couple had set eyes on the Auckland Housing Program’s affordable home at McLennan Park Takanini project in early 2018.
The Auckland Housing Programme is building a range of housing types, including apartments, terraced homes and standalone homes ranging from one to five bedrooms with at least 20 per cent of the market homes designated as affordable homes.
Housing New Zealand is the nodal agency of bringing together the project, and in Takanini, the McLennan development is delivering around 600 new homes, of which 150 will be affordable.
Aakansha Sharma and Jayant Sharma before buying the house
Jayant and Aakansha believed that they had got their dream house in the project that will put them in the property ladder, only to be left disappointed.
Speaking to the Indian Weekender Aakansha and Jayant shared their disastrous experience of first home buying, where they believe they have been let down by almost everyone involved in property buying including Housing New Zealand and solicitor and lawyer representing them in the process.
“It is hard to believe that this has happened to us here in New Zealand.”
“We were under the impression that in this country as long as you are honest and upfront and do everything in a right way, you will never get into trouble,” an exasperated Jayant said.
“We had sent invites to all our friends, got our parents from overseas in anticipation of celebrating one of the biggest moment of our lives – the house warming party,” Jayant recalls.
“Everything went so well till the date my wife was supposed to collect the keys of our dream house on April 17 just before the beginning of Easter weekend.
“We had planned it in such a way to do unpacking during the weekend and share the moment with our close friends and family before everything went wrong,” Aakansha recollected the horrors of the day when their plans went kaput.
“I was in tears, my in-laws were completely distressed and unsure of what’s going to happen next as we were supposed to vacate our renting property the same day, while Jayant was on the phone trying to understand what was actually happening to us,” Aakansha said.
“We spent the next couple of days almost without a home at our friends’ places, and wandering haphazardly to find suitable storage for our house-stuff and the new furniture that we have bought for the new house.
“It was an absolute nightmare, with no idea when, and if, at all, we were going to get our hard-earned deposit money of $65,500 back from the builder.”
“Moreover we did not have any money sitting in our account to help us through the crisis of finding an adequate storage place and a new renting property to put a roof on top of our heads,” Aakansha recalls.
Aakansha Sharma and Jayant Sharma before buying the house
The Indian Weekender had seen the email communications between the solicitor representing them and the one representing the builder and the Housing New Zealand on questioning the eligibility of the couple, who were on a resident visa, to buy the property.
Both, the Housing New Zealand and the solicitor representing the vendor had convinced the couple’s solicitor that only New Zealand citizens and Permanent Residents were eligible to buy the property – and that too this was established and communicated to the stunned-couple much after they have made the deposits and were supposed to collect the keys.
The level of uncertainty and confusion in terms of eligibility of people on residential-class visas to buy a property in New Zealand as of today that the Indian Weekender has seen in email communications is absolutely shocking and alarming, especially for the migrants.
While the government can duly take the credit of banning foreign house buyers in New Zealand, and property experts can debate the actual merit of the decision to prevent an unreasonable bubble in the property market, there is a dire and urgent need to spread accurate information on whether migrants on resident visas can actually buy property under new rules.
The Indian Weekender has raised this issue at the highest level of the government and key stakeholders in the housing market to get more clarity.
Meanwhile, the plight of this couple had not just ended here as they had regrouped themselves to launch a legal battle to at least get their deposit back from the vendor because in their minds the situation was not a result of their individual actions alone and everyone else has an equal responsibility to share.
Toward this goal, the couple was encouraged by their existing solicitor to seek legal services from a more experienced lawyer who would possibly have more chances of succeeding in this weird situation.
Given that the couple were not in a financial position after absorbing the unplanned cost of forced homelessness and accompanied chaos, to bear the cost of another legal process, they had sought some assurances from their existing solicitor about who would actually be footing the bill. Apparently, the couple tells that it was agreed that the extra cost of new litigation would at best be not borne by them – a fact not verified by the Indian Weekender.
Regardless, the couple was represented by the new lawyer, and they had some success after three months when the initial deposit money was returned back into his trust account after deducting the compulsory 5 per cent administrative costs.
Just when the couple were hoping to get luck on their side again, they were hit by a seemingly arbitrary and punitive action when the new lawyer unilaterally deducted $6500 from the trust account as their legal fees.
While the Indian Weekender had seen email communications between the couple and their new lawyer about the dispute with regards to the legal fees imposed on them and the manner of payment, the fact has not been verified independently with the office of the new lawyer.
To be fair to both the lawyers and their respective firms involved, the Indian Weekender is choosing not to name them at this stage, while the due diligence is being done.
Meanwhile, Ashima Singh, a Barrister and Solicitor of Legal Associates, a South Auckland based legal firm told the Indian Weekender that the lawyers can only deduct their fee from the property trust account if there is a clause included in the "terms of engagement" signed by the client, or they have a pre-written approval from the client.
Jayant and Aakansha had confirmed the Indian Weekender that they had not signed such a form authorising their lawyer to deduct the fee from their deposit money despite, repeated requests from the lawyer involved.
Frustrated by their prolonged miseries, it is clear that the couple, for the time being, have not only seen their dream of buying first home wrecked in front of their eyes, short-changed by at least thousands of dollars, incurred unplanned extra costs, plus faced public humiliation, for seemingly no fault of their own.
They have so far been let down very badly by everyone in the house buying process.
The response for this story has been sought from the Housing New Zealand at the time of going live and is awaited.