Agents should have vetted buyer, farmers say

Land agents should have vetted more closely the parties behind the failed bid to buy 28 Southland farms, a farming leader says.

Federated Farmers rural security spokesman and Southland farmer David Rose said a cursory check would have found the involvement in the hapu buying the land of convicted fraudster Shane Wenzel and the failure to complete the $150 million deal showed the need for higher professional standards in the real estate sector.

"When a simple Google search revealed a convicted Australian criminal was associated with the people fronting this deal, you can see why Federated Farmers was more than sceptical," he said.

But the agent trying to close the deal, John Wright of LJ Hooker, in Invercargill, disagreed, saying the proposal was not conventional and required different thinking.

"It saddens me that Federated Farmers continue to grandstand on the Arab-hapu project, using old conventional thinking around something that is far from conventional."

An Auckland hapu with financing from Dubai proposed to buy 28 farms in Southland and enter into a 99-year food supply contract with the Dubai interests.

The deal fell over last week due to the hapu failing to meet deadlines and a breakdown in communication.

Two large rural real estate companies, Southern Wide and PGG Wrightson, both investigated and rejected the opportunity to act for the buyers, saying they were uncomfortable with it.

No deposits were paid to the vendors despite sale agreements dating back to last spring.

Mr Wright said throughout the process everyone had their eyes open and vendors were given several opportunities to withdraw.

"One of the vendors was able to make an alternative sale while all the others left their agreements on the table.

"Nothing more, nothing less."

But Mr Rose believed the deal showed a need to lift professional standards in the real estate industry.

"Given the deals involved very large sums of money, it seems very odd that little was done to verify if the purchaser had the financial means to legally complete.

"If someone walked through my door, saying they had upwards of $150 million to buy a number of farms, I'd check to see if they were on the level."