Auckland Couple Fined Nearly $1 Million for Foreign Buyer Violations

An Auckland couple faces significant financial penalties totaling nearly $1 million after illegally purchasing residential properties on behalf of overseas buyers. Real estate agent Jin Ouyang and her husband, Jie Xie, along with their companies, breached the Overseas Investment Act by not disclosing the involvement of foreign investors in the acquisitions of three residential properties in Auckland.

The Auckland High Court found that Ouyang purchased a property in Grafton on behalf of her mother, while Xie collaborated with a business partner based overseas to invest in two residential land blocks for development. The penalties imposed by Judge James Alexander MacGillivray include $67,500 for Ouyang, $157,500 for Xie, $37,500 for New Life Group Ltd, and a hefty $709,100 for Hermosa Casa Ltd, amounting to a total of $971,600 in fines. Additionally, legal costs of $12,478 will also be borne by the couple.

According to Toitū Te Whenua Land Information New Zealand, a penalty for a third company owned by Xie, Bella Casa, is still pending. The court will assess this penalty early next year after the completion and sale of a residential development associated with Bella Casa.

Purchases that lead to overseas investments in “sensitive land,” including residential property, require official consent under the Overseas Investment Act. Ouyang and Xie acknowledged their failure to seek such consent for their transactions.

In January 2019, Ouyang and her mother, Liping Ouyang, agreed that Ouyang would acquire an apartment on Burton Street in Grafton in her name, with her mother financing the total purchase price of $219,500. Ouyang and Xie were responsible for any associated costs, and profits from any future rental or sale of the apartment were to be split evenly. Ouyang admitted to executing this overseas investment without obtaining the necessary consent and retains ownership of the Burton Street property.

In early 2019, Xie partnered with Ling Ngai Lok, a Chinese national residing in Hong Kong, for a joint investment in New Zealand residential developments. Xie was to purchase properties through a company in which he held sole control. Their agreement stipulated that Lok would contribute 60 percent of the funding while Xie would provide 40 percent. Any profits from their joint ventures were to be shared equally.

In October 2019, they agreed to buy a property on Norman Lesser Drive in St Johns. Xie’s company, Hermosa Casa, acquired legal title after being nominated by New Life Group, which had entered into a sale agreement for the property. Lok contributed $416,000 to the purchase price, while Ouyang’s mother added $597,700, with the remaining funds sourced from a bank loan guaranteed by Xie. Hermosa Casa later sold the Norman Lesser Drive property for $3.5 million in January 2022.

Later that same month, Xie and Lok also agreed to purchase a property on Codrington Crescent in Mission Bay. New Life Group entered into a sale agreement before nominating Bella Casa for the acquisition. By June 2020, Bella Casa legally acquired the property, with Lok contributing $540,000 and the rest funded through a bank loan guaranteed by Xie. Bella Casa still owns the Codrington Crescent property, which is nearing completion of its residential development.

Ouyang’s lawyer, Gregory Thwaite, argued that Ouyang’s understanding of the law was complicated due to recent changes that could be challenging for a layperson, particularly one whose first language is not English. Nevertheless, Judge MacGillivray stated that Ouyang’s experience as a real estate agent and her knowledge of the legislation indicated a reckless disregard for the law.

The judge has mandated that Ouyang dispose of the Burton Street property and Bella Casa sell the Codrington Crescent property by March 31, 2026. This case underscores the importance of compliance with New Zealand’s investment regulations, particularly concerning foreign buyers.