Property vendors do not have to volunteer information about potential planning
restrictions listed on the public record the High Court ruled when ordering property
developer Lei Zhang pay up on a $5.8 million south Auckland purchase she tried
to cancel after finding council records marked a road potentially cutting through
land intended for subdivision.
Ms Zhang tried
to cancel her purchase of the Mitchell family lifestyle block at Karaka after discovering
she was overpaying $1.8 million. The one
hectare Karaka property on Pararekau Road forms part of potential residential
land covered by the Special Housing Areas Act.
The High Court was told Ms Zhang agreed to buy one week after failing to
purchase a neighbouring property at auction.
An acquaintance at Auckland City Council carried out an online search later in the day after she signed up. He told Ms
Zhang there was an indicative road across the Mitchell property marked on the
Auckland Unitary Plan. If constructed,
this road will reduce the number of subdividable lots.
Ms Zhang
said she was entitled to cancel; the Mitchells were in breach of a clause in
the standard contract for sale and purchase which requires vendor disclosure of
‘any notice’ from the local authority.
Justice Venning said there is no requirement for vendors to provide a
written schedule setting out provisions of a local plan as it applies to their
property. The plan designation of an
indicative road was not a ‘notice’ putting any obligations on the
Mitchells. No disclosure was required.
Mitchell v. Zhang – High Court (19.12.17)
18.023