by The Landlord
Currently "advisers" who sell these types of investments are not covered by securities laws, but come under property laws.
Also, these packaged property investments don't have investment statements or prospectuses and the advisers aren't covered by the new disclosure rules, although many are promoting their products as retirement savings offerings.
The issue was canvassed over a year ago as part of the Review of Financial Products and providers. One of the discussion papers, which arose out of a joint official and industry working group, raised the question of whether investments which are "property proportionate ownership schemes" and other similar ventures which link investments similar to a collective investment security to a property investment, could be treated as securities, and come under the Securities Act.
The difficulty lies in the clash between established securities law and practices, and the much less onerous established law and practices relating to real estate.
At issue is the need to maintain certainty around land law practices, and not making changes that would put a lot of other difficult requirements on straightforward property investment.
Commerce Minister Lianne Dalziel's office say the government is aware of the issue, and officials have been asked to report back on the question by June.
There is though, a possibility questions around advice on packaged property investment offerings such as Blue Chip could be considered as part of the Financial Advisers' Bill currently before Parliament.
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