A few of the investors, who have had their Auckland properties turned into slums by the infamous developer Augustine Lau, appear to be walking away from their creditors.
Westpac earlier this month put ads in the NZ Herald calling for two of its clients to remedy the defaults on their mortgages, before the bank seized their properties. Interest.co.nz wrote about this here.
Now a finance company and two individuals are chasing three companies with the same director, Jiawen Mao, for an outstanding $2.149 million.
Their ads in the Herald say the borrowers have until November 13 to pay their debts, before the mortgagees take possession of their properties.
The common denominator is that Augustine Lau, through his company Jesus (2016) Company Ltd, has managed and developed all the properties involved - seriously breaching environmental standards in the process.
Augustine Lau has earned himself somewhat of a reputation with Auckland Council and the Environment Court for illegally modifying properties to cram more tenants into them.
'Evasive, recalcitrant and inadequate'
One of the mortgages that has been defaulted on is over an Otahuhu property that has recently been at the centre of an Environment Court case.
Auckland Council brought forward the case against Augustine Lau and Jesus (2016) Company Ltd, as well as Jiawen Mao and the company she’s a director of that owns the property, Chen Hong Co Ltd.
A judgment issued on September 4 said illegal earthworks were done at 88 Fairburn Road to create a dangerous fill on a steep slope, close to a stream and the Tamaki Estuary.
The judge said: “The best possible interpretation of the work undertaken on the Property is that the respondents deliberately undertook or deliberately allowed the undertaking of the construction of buildings as well as substantial destabilizing and unsafe earthworks with total disregard for recognised resource management, engineering and building practices.
“The Respondents' compliance with the orders which were made to remedy the situation created by them was evasive, recalcitrant and inadequate.”
The Court ordered the group to reimburse Auckland Council $127,500 for the costs it incurred.
Default on mortgage over Fairburn Rd property
Chen Hong Co Ltd’s creditors - Best Capital Ltd, Hyun Bin Kim and Duck Young Lee - are now after $331,947, under a mortgage written as recently as July.
Their notice in the Herald also says Chen Hong Co Ltd “failed to comply with the non-compliance notice served on 11 August 2017 requiring payment of $320,000 from the sale of 403 Ormiston Road, Flat Bush”.
This property was sold to another company Jiawen Mao is the director of, Big Fresh Orchid Flowers Vegetable (NZ) Ltd.
The Fairburn Road property has been on the market since August. Barfoot & Thompson is marketing it as an ideal place for an investor or someone with an “eye for the future potential development”.
Interest.co.nz understands Augustine Lau is trying to organise the sale of the property, adding to the narrative the owners of the properties he manages don’t have much to do with them.
Defaults on mortgages over Greenhithe properties
The other two notices in the Herald are in relation to mortgages over two Greenhithe properties.
One orders Yuxuan Co Ltd to pay Best Capital Ltd $760,807. This mortgage was written in August 2016 and is over a property at 21 Chester Avenue.
The other orders Yintian Co Ltd to pay the two individuals (Lee and Kim) $1.056 million. This mortgage was written in July 2016 and is over a property at 31 Chester Avenue.
The interest charged on both these loans is 20%, while the interest charged on the mortgage in the first notice is 8.99%.
Environment Court judge has ‘utmost sympathy’ for tenants
While these two properties haven’t featured in the Environment Court, Jiawen Mao has, in relation to another property her father (Liansen Mao) owns and Augustine Lau manages.
As her father’s power of attorney, the Environment Court saw her as liable as he was.
A December ruling explained the 387 Ormiston Road property, which was only allowed to accommodate one household, had been transformed into eight. The pre-existing house and barn had been subdivided into additional tenancies, and two converted classroom buildings and a relocated house had been brought on site.
An illegal sewerage system had also been set up. Auckland Council said this was overloaded and effluent from a “soakage field” had poured down a bank on the property into a nearby stream.
The judge said: “We wish to note immediately that there is no evidence that any of the tenants, perhaps beyond the first and second respondents [Jiawen and Liansen Mao] who may have lived on this site from time to time, were aware of the illegality of the establishment of the residences or the wastewater systems.
“We have the utmost sympathy for their position, particularly in the constrained circumstances of housing in Auckland.
“Mr Lau suggested that we should allow the illegality to continue, because of the potential effects on the residents.”
He went on to say: “None of the respondents have demonstrated any conviction towards complying with the Court's orders. Mr Lau continues to maintain that the septic tank system is perfectly adequate and that he is being victimised by the Council.
“He suggests that particular Council staff seek revenge against him. I wish to make it quite clear that there is no evidence to support that allegation.”
The Court essentially ordered the group to get the property back in line with the law and pay Auckland Council $90,000 to cover the costs of proceedings.
'Lawyer doing everything, we don’t know anything'
What about the creditors?
The director of Best Capital Ltd, Woo Young Kwak, is also the director of a company that’s written Augustine Lau’s other associates short-term mortgages in the past.
While the resource consent conditions of these properties have been breached, the two mortgages interest.co.nz is aware of have been repaid.
Best Capital is registered as a “Non-Bank Non-Deposit Taking Lender” with the Department of Internal Affairs, which oversees its compliance with the Anti-Money Laundering/Countering the Financing of Terrorism Act.
Woo Young Kwak directed interst.co.nz to his lawyer when asked for comment.
Another one of the lenders, Duk Young Lee, said: “Lawyer doing everything, we don’t know anything.”
Asked if he knew the whereabouts of Jiawen Mao, he said: “I don’t know any information. I never talked to him, I never met him. I don’t know.”
Duk Young Lee also owns a number of Bruce Lee Sushi & Roll shops around Auckland.
Interest.co.nz couldn’t get hold of the other lender, Hyun Bin Kim, for comment.
Casting the radar out a little further, Jiawen Mao’s father has provided short term mortgages to another of Augustine Lau’s associates who’s been reprimanded in the Environment Court.
He provided three short-term mortgages to Qiufen Lu in 2013 and 2014 over a property at 32 Weranui Road, Waiwera. These have all been repaid
84 Comments
Mr Lau is just another of many
National let in many wealthy immigrants who did not meet Dept of Immigration standards
Witness the wealthy immigrant Maurice Williamson sought special waiver for
He did not follow City building rules either
In another case Millbrook subdivision in Silverdale the foreign builders removes steel from the foundations after inspection and then filled the foundations with concrete and no steel reinforcements
The inspector latter found out and the foundations all were rebuilt after the concrete was broken up
This is what you get from scam cultural norms The Chinese way is not the European way
They are used to bribes and draconian government practices
They see NZ as weak
Amend the Residential Tenancies Act to require a certain standard in rental accommodation and requisite enforcement and the problems of differing cultural norms would be resolved immediately - just as they are with respect to food preparation/food safety in take away/restaurant businesses.
Amend the Residential Tenancies Act to require a certain standard in rental accommodation and requisite enforcement and the problems of differing cultural norms would be resolved immediately - just as they are with respect to food preparation/food safety in take away/restaurant businesses.
Are you suggesting that this is representative of Chinese "norms"? If you are, I would say that there's no evidence to back up your suggestion.
Rubbish. We have time delays on many things, including becoming a NZ citizen so people show they are of a certain character. Is that Xenophobia? Different coujntries and cultures have different standards, and it takes time to learn NZs levels
Next you will be saying restricting the buying of exisitng NZ homes to NZ residents is xenophobic, even though that looks to be come policy soon, to help fix NZ housing crisis, albeit at least a decade too later
I’m sure ANZ with JK ensconced will only be too happy to clean up the mess
Payout all those that have been defrauded
I mean the whole National idea of open immigration was to bring in as many entrepreneurs as they could
Entrepreneur scam artists & importers of pseudoephedrine pills in bulk for P manufacture
It’s the Entrepreneurial spirit National was after
Oh, for sure. The banks must be collectively shitting a brick. There were reports at least a couple of years ago that Australia had found a ton of dodgy loans to unverified foreign borrowers, but if NZ followed its usual course, everybody concerned just sat there slackjawed when the fraudsters and crooks came here instead.
That's a stretch Didge. "The climate system is a coupled non-linear chaotic system, and therefore the long-term prediction of future climate states is not possible."
https://www.ipcc.ch/ipccreports/tar/wg1/501.htm
"The severe discrepancy between observations and modeled predictions found during the 1922-1941 and 2000-2016 periods further confirms, according to the criteria proposed by the AGWT advocates themselves, that the current climate models have significantly exaggerated the anthropogenic greenhouse warming effect."
https://www.researchgate.net/publication/320039513_Natural_climate_vari…
"The climate system is a coupled non-linear chaotic system, and therefore the long-term prediction of future climate states is not possible." Yes, but I suggest that we should be more cognisant of the incredible increases in computing power. Climate computing models still vary from moderate future warming scenarios to dire warming. However, climate scientist are finding ever more factors that when included in their models bring them more in line with observed realty, thus we are learning from our ignorance. Models are tools and must be interpreted according to their current abilities but they should not be treated with contempt. History also tells us that many predictions that something will not be possible, were very very wrong.
Yes I think you're right Taubin. China has been clamping down on money laundering/Shadow banking and I think we're now starting to see the results of their endeavors.
We're going to see a lot more panic sales and mortgagees as they pull the plug. This shouldn't have been allowed to happen in the first place.
Bloomberg article: China's New Watchdog to Tackle Shadow Banking, Property Bubbles
https://www.bloomberg.com/news/articles/2017-03-02/china-s-new-bank-wat…
CJ099. Yes this shouldn’t have been allowed to happen. The government or RB could have, lifted interest rates, introduced LVRS or DTI restrictions , restricted foreign ownership homes and or lowered immigration. There’s only one short answer to what’s been allowed to happen in Auckland then the rest of the country and that’s a buying frenzy. A government and RB can let housing grow more controlled and even with very little chance of a downturn and by keeping in pace with incomes keeping housing affordable or do what’s just been done letting a buying frenzy to happen. The problem with a buying frenzy specially this large is in the end everyone gets tapped out. Ends up holding extremely large mortgages. They stop buying. The hole trend ends . With no short term capital gains the hole thing falls over with banks running a mile. You have to ask yourself what was the people in power thinking of. In a year from now people will look at house prices from around the 2010 area and a year from now and shake there head I’m sure. Time will tell. I’m sure we’ll find that from 2010 to 2019 hurt more people than it helped and governments and RB need to take the market up evenly with incomes to help the masses. When will they learn it’s impossible to take house prices up massively and expect them to hold once the buyers are gone . That’s utterly ridiculous
I have noticed that many Asian people can have a "she'll be right" attitude that goes way beyond the legendary Kiwi one. Not all of course. I think there is an aversion to thinking about what bad things may happen because if you do that bad things are more likely to happen. The European interpretation of the "see no evil, speak no evil, hear no evil". Rarely is the fourth monkey mentioned, "do no evil".
It is a deep cultural thing and I'm confident that no one should be offended by this observation. I have a completely opposite attitude in that I try and think of every bad thing that could reasonably happen and plan for it. It's as though if I can imagine it then it is unlikely to happen because it is always the unexpected that happens. Possibly equally as superstitious.
I experienced this in real life during my Casino gambling days where I always entered those hallowed halls expecting to lose. I had worked out the odds so losing came as no surprise to me and I managed my bankroll and almost perfect game play as equal first priorities rather than relying on luck. I managed to go a whole year of gambling, visiting sometimes three times a day, and came out $500 ahead. A surprising result as I expected to be a little down and I also expected the Casino to be down after providing the venue and hours and hours of entertainment for about $10 a night loss to me.
This all came crashing down when I met a cute young lady there, abandoned my cautiousness, lost 10K in a week, following the Asian style of gambling which is "believe you can win!". Good times.
That is an interesting one and has a number of wide perspectives.
There is a line of thought that I read somewhere that if you worry about a thing too much then the "universe" will deliver upon you, the very thing that you worry about. I can accept that there is some truth in this from the perspective that, what you worry about and obsess about negatively affects your behaviour in respect of matters around this fear. That in turn alters how situations related to your fear will relate to you, and can ultimately bring about the very thing you fear. E.g say you are very fearful and distrustful of the police and a police person stops you and questions you about a matter about which you are totally innocent. However your fear of the police affects your behaviour toward them and because of your attitude the exchange descends to a situation where you are abusive or strike the officer. Suddenly your fear has magicked up the very thing that you are afraid of. There are lots of examples of this and the lesson is that the best mode is to be positive and be thankful for the good things that we have, and that tends to work to have a positive affect on your life.
However looking at matters that you are planning to do I would agree with you. There is no substitute for thorough planning. Generally it is not the things that you planned for that trip you up. It will be something that you overlooked. The best way to deal with that is to be alert and prepared to change or adapt your plan as soon as possible. The worst thing that you can do is ignore something that is wrong and carry on, hoping that it will work out or go away. Better to stop and address the thing head on as soon as possible because the consequences and costs only increase exponentially as things go on.
Having said all this, it is important to be sensible about not over preparing and planning. You can end up in the paralysis by analysis situation which can totally destroy creativity and be more costly that dealing with any problems that you may have overlooked.
That was a sweet story Zach well done being so brave to tell it
It’s interesting because it explains something you learn with age
We all are susceptible to deviating off our path no matter how clever we think we are
Life situations change the game and we find ourselves doing things we never thought we ever would
Nice job Zach
Over the past two years Augustine Lau has figured prominently in the news and, here on interest.co.nz. Not sure he presents a "she'll be right" attitude but instead exhibits a good understanding of kiwi laws and the dismal way they are administered - he operates on a total disregard for those local bylaws knowing he can and will extract the maximum utility from properties that can be obtained and by the time the local authorities get around to dropping by he has trousered a very nice earn - so what are you going to do about
Quite ridiculous really that in order to legally close down a slumlord we had to use the RMA and the Environment Court - as opposed to the Residential Tenancies Act and the District Court.
http://www.legislation.govt.nz/act/public/1986/0120/latest/DLM94278.html
Hopefully a fully enforceable warrant of fitness type regime will be brought in by the new Government to resolve that ridiculous situation.
Yes, and it's a key problem with the current legislation as it allows for the exploitation of individuals and families faced with a tight (and largely unregulated) housing market. That's my point, the Residential Tenancies Act needs changing. Midwives, for example, (or indeed any concerned person) who enter a poorly maintained home should also be able to lodge complaints with the regulator.
Tenants are highly unlikely to complain - just as the workers exploited under our employment laws are unlikely to complain. That's why I mention that changes to the tenancy laws require the requisite enforcement - such compliance and enforcement needs to be proactive/initiated by the state (as it is with food safety and road safety) as well as responding to complaints by tenants and other observers.
"such compliance and enforcement needs to be proactive/initiated by the state"
lol, this is more radical than the old Soviet Union !! .... Maybe we need to employ ex Gestapo agents to run our rental "unregulated" market ...:)
BTW, Do they do that in the USA Kate? ... or Germany, France, Europe? -- or is this the only way the Lefties can achieve things?? .. maybe this would be the Human face of Capitalism !! ...Find One rotten apple and call for all Apple Bins to be tossed away - !!
EB, no different than our food hygiene regulations for restaurants, or our warrant of fitness regime for vehicles and the compliance and enforcement actions associated with that.
Yes, the US and Europe both have far more robust regulatory regimes where rental tenancies are concerned.
In the comments for the story about these crooks published here on 14 October Eco Bird was taking exactly the opposite position. A week ago he wanted strict laws to prevent this kind of thing happening again, and now he's babbling gibberish about that being COMMUNISM!!!!11!!!!
What's changed, I wonder? Whatever could it be?
Ardern plans to stop overseas housing speculators through changes to TPP.
https//www.stuff.co.nz/national/politics/98132879/jacinda-ardern-changes-to-tr…
Good one Jenee, am so Glad we have a new PM that is going to fix everything. Everyone is going to be rich, landlords are going to all give us rent reductions and new dishwashers, plus every Kiwi kid is going to have a New set of perfect parents if needed, supplied by our new government,
Reality is Jacinda lovely lady that she is, has got such unrealistic views about what life is and should be!
She is so out of her league running the country and it will be shown up,pretty quick that most of her ideas are not possible,
Grant Robertson said prior to the election that Labour would be spending an extra 20 billion over the next four years on education, health and propping up the nillers lifestyle!
Prey tell us Grant where the hell you are going to get this money from?
This is going to be a real circus and I hope the ones who think it is going to work had better put their seat belts on because they are in for one hell of a ride.
National will win by a landslide at the next election and will govern for eternity after this lot stuffs up big time.
Grant Robertson said prior to the election that Labour would be spending an extra 20 billion over the next four years on education, health and propping up the nillers lifestyle!
Prey tell us Grant where the hell you are going to get this money from
Similar memes will be bouncing around the BBQs, water coolers, and bowling clubs of NZ. The reality is that no developed country with fiat currency has ever run out of public money.
Put yourself in a time machine and go back 20 years and talk about house prices in NZ. If you quoted what they actually are, you'd be looked upon as if you were madder than a cut snake. If you said that the money to fund the property bubble was "lent into existence", the sheeple would be convinced you're a cut snake.
Tell that to JK and JB.
Hopefully their type of "arrangement" will be outlawed in this parliament and Act will disappear down whatever hole is available. It would have been ironic though if Jacinta had forgot her morals for once and allowed an "understanding" between the Greens and Labour in the Nelson electorate.
I can't see how this article has anything to do with Jacinda at all. Other than it will now be a government she is leading, that will need to address this kind of rot. But that is true of any government at any time. I think maybe comments are getting a bit overly politicised? Expecting Landlords not to break the law is not a politically ideological issue. Everyone on the political spectrum expects citizens to be law abiding.
THE MAN 2 ??? But the article is about a situation that has been going on for years. How can that be about Jacinda?
It's a natural reaction for people to assign politicians to what they like or don't like. It's an easy way to explain something for which you have no answer.
Iconoclast expand your knowledge and have a read of the Dec 2008 Fiscal update when English put his feet under the table - pre Chch/Kaikoura earthquakes, Labour's ACC hole and in the midst of the GFC. Debt under Cullen's policy settings, and his $6B deficit thrown in, was forecast to run to $71B and not reach a surplus for a decade.
"Gross debt is forecast to increase by $40.3 billion in nominal terms and as a
percentage of GDP by 15.6% over the forecast period. By the end of the forecast
period in the June 2013 year, gross debt is expected to be $71.6 billion or 33.1% of
GDP. "
http://www.treasury.govt.nz/budget/forecasts/eff2008/eff08.pdf
"National had barely got its feet under the Cabinet table before the Treasury further revised its forecasts and projected deficits of $6 billion-plus.
So much for “careful management”. Labour is relying on short memories to rewrite history, however. It won’t fool everybody. But in the heat of an election campaign, it is easy to spout fiction and difficult to establish fact."
http://m.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=1076…
The Kermadec sanctuary is still on the table.
https://www.stuff.co.nz/national/politics/98130588/kermadec-sanctuary-s…
If your comment was aimed at The Man then you are correct it won t really affect us at all, as this coalition will be a one term government.
The ones that will be affected are the middle class workers as they will be paying for all the new governments spending.
Prices will go up due to the lower dollar and there will be far more unemployed due to employers having to pay workers more and having to put prices up and not being able to sell product.
The left wingers may think I am talking crap but just watch what happens over the next 6 months.
...recent farcical election result where 3 losing parties formed to be our government.
For those of you calling for a rental WOF or similar, this will be about as effective as the dog microchipping laws:
A girl gets badly bitten on the face, the government says "We will fix that" and introduces a law requiring all dogs to be microchipped. All good owners do so. All ratbag owners don't. Result? As many dog bites as before, costs up on all good dog owners.
Rental WOF? All good owners will get them, ratbag owners won't. Result? As many crappy houses for rent as there are now. Costs up for all good landlords (99.55 of them). Further results? Tenants rents go up to pay for the new compliance which actually results in the people who are supposedly being helped paying more rent i.e. harmed.
So you might want to think about that.
Kate
Absolutely right
In the big wider world outside they have really good tenancy laws that really do get enforced straight away
Basically in greater population areas most of the scams are known and fenced off with tight regulation
In Auckland when I lived there just about everyone converted their garage to accommodation!
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