Would-be Wellington first home buyer Bailey Ross and the house she missed out on.

A would-be first time buyer who was preparing to move into her dream home within weeks has been left devastated after the developer cancelled the sale and relisted the property for $90,000 more.

Bailey Ross paid the deposit for a two-bedroom, one-bathroom new-build in Tawa, in May 2019.

The $515,000 price was bang on budget and the developers, Tawa LLP, told the 25-year-old sales account manager she would be able to move in by the end of the year, early 2020 at the latest.



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Ross had watched her home, one of 22 units in the outer Wellington suburb, be completed. "I could see them, they were practically ready," she said.

The end of 2019 came and went, and the BEO (buyer enquiry over) on the real estate listing for the houses rose to $535,000, then $565,000.

Ross, who had been saving a deposit since the age of 16, started to get excited about moving in. She even took a walk-through of her house.

SUPPLIED The modern kitchen and bathroom sold Ross on the plans immediately.

The modern property, with a new kitchen, bathroom, appliances and car park ticked all of her boxes.

"It was an ideal starter home," she said, "I really thought I'd hit the jackpot."

But then Ross' realtor phoned her with the bad news. Tawa LLP had cancelled the purchase and would be returning her deposit, plus interest.

"Two weeks ago, before this happened, they said I could move in early February 2020," said Ross. "It was awful."

SUPPLIED The master bedroom.

A sunset clause in Ross' agreement permitted the cancellation.

Property law expert Joanna Pidgeon said a sunset clause under the Resource Management Act allows both parties to get out of an agreement if the build is not completed by a certain date.

"Sunset clauses are usually there for purchasers' benefit rather than vendors'," she said.

Ross and the developer had signed a sunset clause for September 2019, so either party could back out of the sale if the build was not completed by then.

When Ross' lawyer approached Tawa LLP for an explanation none was given, which isn't uncommon.

"Sunset clauses are black and white if there's a date," said Pidgeon. "Either party can terminate and you don't have to give a reason."

Joseph Hannah, a partner at Tawa LLP, sympathised with Ross but said sunset clauses were "fairly standard".

"I feel sorry for the lady," he said. "We haven't taken this step lightly, but we didn't have a choice."

SUPPLIED Bailey Ross bought one of 22 units for sale off-plan for a development in Tawa, Wellington.

After the cancellation, Ross saw the same properties readvertised with a BEO of $585,000.

"I thought I got a bargain, and then I got penalised for getting a bargain in the first place," she said.

Heartbroken, Ross asked the real estate agent if they thought a higher offer might be accepted, to which the real estate agent said yes.

She ultimately decided it wasn't worth the risk. "I'm not prepared to invest another $100,000 for the property, when the same thing could happen months down the line."

The BEO for the houses has since increased again, to $605K.

SUPPLIED Bailey Ross (left) and friends.

The houses were supplied by Matrix Homes, which was liquidated in December 2018, and Hannah said the subsequent development had been "beset with problems".

"We shipped the units out of the Matrix factory and we've had to complete them on site, which caused problems between two consenting councils.

SUPPLIED "The worst part for buyers who get cancelled on, is you just can't save to keep up with the increase of house prices," said law expert Joanna Pidgeon.

"A lot of the issues were regulatory. We had problems with rain, getting design finished on time, and finding contractors in a really difficult market. Costs went through the roof."

Without raising the price, Hannah said the whole scheme would have gone into liquidation.

"I know people are probably a bit annoyed, but it's not a case of a developer being greedy," he said. "We've worked extremely hard to get this thing finished and won't make any profit out of it."

SUPPLIED Buying a modern property was a priority for Ross: "I want to immediately feel at home."

Despite what's happened, Ross hasn't given up on finding her first home and has added the money she was saving for new house purchases, like curtains and furniture, into her deposit fund.

"I've got to start again," she said. "Everything is so expensive, but having been through this, a $550K price tag doesn't scare me.

"I can't do anything about it, what's done is done. Buying a house is like when you fall in love with someone. You look at them and go - yes! you! - right away.

"I had no trouble with the process, it's just been a disappointing end."

SUPPLIED The second bedroom.

Pidgeon's advice to other first time buyers is to beware of sunset clauses shorter than one-and-a-half, to two years.

"In genuine use, vendors have sunset clauses to get out when they can't finish a build in time," she said. "But it can also be an opportunity to get finance off the back of having you signed up, then terminate and sell for a higher price if the market is moving upwards."

As for the Tawa development, Hannah said it is still not finished and they hope to get titles by the end of April 2020.

"There are no winners in this," he said. "Certainly not us."