Lesley Kayll signed up for her new house – her first house, her dream home – three years ago.
After renting for years, this was exciting stuff. So three years later – how's she liking her new place?
Not much. She doesn't have a house, or even a garden.
What she has is a section covered in dirt and sand which is currently being used as a storage site, and her hard-won 10% deposit tied up in the project.
Lesley said: "It should have been my home, it should have been exciting and it's not anymore."
So, how did this happen?
It's all down to the sunset clause in her building contract which has allowed for multiple delays to her build.
Sunset clauses are commonly used in contracts to give parties the option to cancel an agreement if certain things haven't happened by a certain date – that's the "sunset" date.
In some contracts only the vendor can cancel or delay, but in others, the clause can be used by the buyer as well. Say, if a build can't be completed by the set date, they can decide they want out of the contract.
Lesley's build was supposed to start in 2020 and was expected to be completed by August 2021.
Her sunset date was set for June 2022. She said there were no red flags that there would be a problem – then in May 2021 an email told her the company, Ormiston Rise Ltd, was going into receivership.
Lesley said she was worried about her deposit.
"Because obviously that's your entire life savings that's sitting in a trust account."
She was assured her deposit was safe, but a few months later the development was taken over by The Neighbourhood South Ltd.
Under the new company, Lesley's sunset date was extended from June to December 2022.
She could have cancelled, but thought it was risky: "House prices had gone up slightly in Auckland at that point, so when I actually assessed it and looked at it, I was better off staying with what I had.
"It was obviously very very nerve wracking."
But then the developers asked for two more extensions – from December to June 2023, then most recently, to June next year.
This was the last straw for Lesley. With legal help, she declined the last extension – but that was rejected.
"I feel as if they're holding us to ransom. I just feel like they can do what they like and they don't seem to care about people's lives."
It was a similar story for Tafadzwa Chikwasha and her young family, who were also buying off plans and bought from Neighbourhood South in March 2022.
The family had just had their first child and were looking forward to their first home, due to be completed in September last year.
"The fact that it was a new build because that's really what we desired, we wanted to be the first ones in that particular property."
Tafadzwa said they signed up quite quickly, paid their 10% deposit, and their sunset date was set for May 2023.
But then, the completion date was pushed from September 2022 to early 2023, and then again to October, then November this year.
Tafadzwa said: "We felt really shocked and extremely frustrated, we were kind of losing our patience as well.
"The dream that we had was falling apart."
Then the developers wanted to push the sunset date to May next year, citing the pandemic and ongoing staff illness.
But Tafadzwa was done. She said "it's beyond frustrating".
"We're in limbo at the moment," she added.
It's important to note that in both cases, the developer was using part of the sunset clause which allowed for delays if the delays are caused by a "specified event" or "force majeure" – meaning an event that is beyond the vendor's reasonable control.
So, Covid and lockdowns – definitely beyond anyone's control - so were the developers entitled to trigger the specified event clause?
Lawyer Joanna Pidgeon said the situation's not completely black and white: "But certainly by 2020 everyone was aware of the possibility of lockdowns, of supply shortages, and delays, so these aren't new things.
"If there was a shutdown for three months, then the extension should only be for three months, not, 'well actually we're running a bit behind anyway – let's make it a six-month extension'."
Company responses
In Lesley's case, The Neighbourhood said it's been difficult to complete the build because of the receivership, delays with council consents and other pandemic-related issues like material shortages.
"The delays have been caused by a number of issues compounding," The Neighbourhood explained.
"The receivership caused considerable interruption. One of the issues we, as the new development company, had to visit was the state of consenting when we took over. We have spent enormous amounts of energy and time undoing the unacceptable situation we inherited."
No building consent has been obtained for Lesley's block. But The Neighbourhood said consent for another unit ahead of Lesley's in the queue has recently been given, and Lesley's "will not be far behind that one".
"The capability to get the development, its subdivision, house builds and house completions, consented and processed has been badly affected as a consequence of the coronavirus pandemic.
"We have seen consenting timeframes move out from a bit more than a month to several months."
They said they've also been hamstrung by a very tight labour market and simply have not had labour available. Their project schedule called for up to 300 staff on site, they've not been able to recruit more than 150.
They apologised for the delays and said that Lesley will either get her house by the extended sunset date or get her money back.
Her deposit is protected, and they expect to deliver her home around six months after gaining building consent approval.
And, The Neighbourhood South said it's offered solutions to some of the buyers in hardship, and it said they could sell Lesley's home on her behalf.
"We would be happy to explore for Lesley, as we have done in other cases, that we seek another purchaser for her home if she is in hardship," it said.
"We believe that, based on market conditions, Lesley may be able to achieve a price higher than she has contracted to pay for her house. We could explore how to sell Lesley's home before it is completed if Lesley wished to pursue that avenue.
"Costs of on-selling would need to be recovered but we do not seek to profit from this circumstance and it's fair to protect the value of other buyers' investment as well."
Auckland Council told Fair Go that the building consent hold up has been because it's waiting for outstanding information from the developer – not unexpected, it said, following a receivership.
But it also said the pandemic hasn't had an impact on the consenting process, and average consenting times have only increased by four days.
The Neighbourhood South Ltd said it's been responding to all council's requests for information and it is typical for those exchanges to take some months.
They also confirmed they received a further information request from council late last week, and they're acting promptly on it.
In Tafadzwa's case, she said her lawyer requested a contract cancellation: "Lockdowns were finished in August 2021, we signed in April 2022, so really that particular scenario is irrelevant to our situation."
The Neighbourhood didn't accept the cancellation, saying that while Covid restrictions happened before the agreement was signed "it does not follow that the restrictions did not have ongoing and unpredictable consequential effects on the remainder of the development".
It also stated there were delays caused by labour shortages, delays in council inspections and consent processing because of extreme weather events.
But an update from the developers is that building is underway and expected to be completed around the end of this month, with the code of compliance process to follow.
Pidgeon warned buyers to pay close attention to the terms of any sunset clause before signing.
"There might be a sunset date but if there's an ability to extend, that might not be the final date, so you need to be aware that you're on that journey of that contract for what can be an extended period of time."
You can try to negotiate before you sign, she said, but that doesn't mean the vendor will agree.
Through all this uncertainly, both Tafadzwa and Lesley are certain about the impact this has had on their lives.
Lesley said: "I just feel like I want my life back and that might sound really dramatic but you know, I'm constantly worried about what's going to happen, how I'm gonna get my money back, or even when and if the house is built, am I even gonna get a mortgage?
"I think in all likelihood I won't be buying again, which is a real shame."
And they don't want to see anyone else going through this.
"My advice would be look out for yourself because these companies don't care about us," Tafadzwa said.
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