Property Dispute Provides an Important Lesson on Informal Business Deals

Background

At the centre of the matter are several individuals who entered into an informal property development venture — without written contracts or business accounts. According to the report, investor Zhengxi (Nic) Hu and his wife provided capital for property purchases and developments, while former Barfoot & Thompson agent Limei (Lia) Lin and her associates handled project management and sales. By 2024, the group was involved in three properties. But when the relationship soured, the absence of formal agreements left each party exposed.

Hu later lodged a caveat on one of the venture’s townhouses, effectively preventing its sale. Despite this, the property was listed on the market. “When I found out that the property was still being marketed for sale even though the High Court had maintained my caveat, I had very mixed feelings — disappointment, frustration, and disbelief,” Hu said.

Lin maintained she had received legal advice permitting the marketing of the property, provided any sale was conditional on the caveat’s removal prior to settlement. Her employer, however, reportedly “strongly recommended” she withdraw the listing — which she did. The dispute has now escalated into complaints before the Real Estate Authority and court proceedings spanning both New Zealand and China.

Why Informal Arrangements Create Legal Risk

This property dispute serves as a timely reminder of the risks involved in handshake agreements. In real estate and development projects, the absence of written contracts can lead to significant uncertainty about ownership, contribution, and entitlement. When disagreements arise, it becomes difficult — sometimes impossible — to establish who is legally entitled to what.

A caveat, as seen in this case, is one mechanism used to protect an individual’s claimed interest in land. However, caveats can also trigger lengthy and expensive litigation, particularly where the underlying ownership or contribution is unclear. Even experienced property professionals can find themselves entangled in complex legal situations when proper governance, record-keeping, and contractual documentation are lacking.

Impacts Beyond the Courtroom

Beyond financial consequences, property disputes like this can damage professional standing and strain personal relationships. When business partners are also friends or colleagues, informal deals can quickly turn into deeply personal conflicts — as seen in the allegations and counter-claims in this case. The involvement of professional regulators such as the REA further underscores how private disagreements can escalate into matters of public and professional accountability.

Important Takeaways

This incident highlights the importance of formal agreements, clear records, and sound legal advice at every stage of a property venture. Properly drafted contracts not only clarify each party’s rights and responsibilities but also protect against future disputes that can derail both business and personal lives.

While this property did not go under contract, the case highlights the important role a conveyancing lawyer plays in property transactions. For prospective buyers, this case underscores why engaging a conveyancing lawyer is essential before signing any agreement. A lawyer’s due diligence includes reviewing the property’s title, checking for caveats or disputes, and confirming that the seller is legally entitled to sell. This safeguard helps buyers avoid becoming unintentionally entangled in another party’s property dispute — a risk that can quickly lead to costly delays or legal complications.