Property problems: Rules designed to give investors right information

. Under the Securities Act 1978 the exemption notice allows investments in real property proportionate ownership schemes, such as carparking buildings, to be offered to the public on the basis of a less comprehensive set of disclosure materials than would otherwise be required for an offer of securities to the public.

How strictly the requirements must be complied with was tested on March 17 in the James Smith carpark development in Wellington.

In the James Smith carpark case the Securities Commission announced it had banned the offer documents for the carpark property scheme. Interests in the Wellington carpark were being offered for sale for $21 million under a proportionate property ownership scheme.

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