Runaway developer leaves $300,000 dispute festering.
Now based in Las Vegas, developer Rod Nielsen leaves a bitter legacy for 36 Queenstown villa owners – and local ratepayers.
Queenstown Lakes District Council is to serve abatement notices on owners at Heritage Villas, developed by Nielsen on Fernhill Road from 2003. An adjoining landowner will also be served.
The scrap – over major landscaping that Nielsen’s company allegedly short-cut – could become a drawn-out, expensive court case that may go either way.
Villa owners, already plagued by poor investment returns and collapsing property values, vigorously dispute liability.
Heritage Villas’ body corporate claims QLDC shouldn’t have allowed legal titles to be issued if the landscaping didn’t comply.
What’s indisputable is that bureaucracy is often no match for quick-thinking developers – QLDC didn’t nail Nielsen’s company or his financier before both went broke.
Villa owners and the neighbouring landowner are the only parties left standing.
When the development was first consented in 2002, Nielsen’s Mondrian company agreed to put in tennis courts and extensive landscaping on a public reserve in front – it also agreed to maintain that reserve forever and a day.
As security, Mondrian lodged a $559,000 performance bond with its financier.
But Mondrian’s cheap-jack landscaping wasn’t picked up by regulatory officials until August 2006 – after the villas had been built and titles issued.
Even then, Mondrian fobbed off officialdom for seven months before QLDC took $66,000 from the bond so a contractor could clear noxious weeds.
In June 2007, QLDC lawyers wrote to Mondrian advising a further $47,000 would be drawn from the bond for more work.
The bond was held by Bridgecorp, which, the council file says, went bust only days later, taking the remaining $483,000 with it.
QLDC’s regulatory arm then went into slow motion. Despite warning letters, a full 12 months ensued before the first legal enforcement step – an abatement notice.
This prompted a phone call from Nielsen – “now living abroad”, notes the council file.
On July 3 last year, a QLDC regulator offered Nielsen a deal: if Mondrian pay $211,459, QLDC will complete and maintain the landscaping – think about it until October 1, Nielsen was told.
Mondrian crashed on July 18.
Whether villa owners or ratepayers end up paying, the landscaping bill will be substantial.
“Extensive remediation” is needed, according to regulator Lakes Environmental.
Most of the reserve needs replanting and large amounts of topsoil must be laid before lawn can grow.
Regulators met villa reps in February, suggesting the same deal as they’d offered Nielsen – pay QLDC some money to do the landscaping and you’ll be off the hook.
This time the price was $300,000 – $8300 per villa.
The body corporate hired a lawyer, who hired a barrister, and the fur’s been flying since.
Titles couldn’t or shouldn’t have been issued until QLDC was happy Mondrian had complied with all consents, it’s claimed.
“The only conclusion that can be reasonably drawn is that council in fact accepted the developer’s works at the time they were carried out,” a villa lawyer says.
Anyway, ongoing consent conditions must be registered on titles before subsequent owners are bound by them – not the case here, he adds.
QLDC will be “acting unreasonably” if it takes legal action.
A council regulator says abatement notices against villa owners are just awaiting QLDC sign-off.
Mountain Scene emailed Nielsen this week – no reply.
In March, his estranged brother Greg told the Auckland High Court that Nielsen fled the country to escape creditors.