Napier Leaseholders urged to take up discount offer

19 January 2012

Napier Leaseholders urged to take up discount offer

Time is running out for Napier leasehold land owners to take up the Hawke’s Bay Regional Council’s substantial discount to freehold their properties.

HBRC is offering a 17.5% discount to residential leaseholders wanting to freehold and a 10% discount to investor leaseholders, but freeholding settlement must be completed by 30 June 2012 to qualify. HBRC will also contribute up to $1,000 towards the legal fees to freehold cross-lease sections.

Hawke’s Bay Regional Council has a portfolio of around 650 leasehold land properties and 950 lessees. Its current value is approximately $73 million. The portfolio provides an ongoing source of non-rate revenue to Council and the funding stream continues to benefit the region. However, HBRC wants to reinvest in regional infrastructure projects that will deliver long-term economic and environmental benefits to the entire region, such as the Port of Napier and potential water storage projects.

HBRC Spokesman John Keenan is encouraging anyone considering freeholding their property during the discount period to contact Council’s leasehold land staff now.

“To qualify for the substantial discounts the sale and purchase must be completed before the end of June, and to do that we need to start work as soon as possible on the paperwork,” says John Keenan.

In the last six months 75 property owners have taken up the offer.

“This is a great opportunity for leasehold land owners to freehold their properties at a much reduced rate.”

Leasehold Land Fact Sheet

DISCOUNTS OFFERED

RESIDENTIAL

A 17.5% discount on HBRC’s current freeholding price is offered to:

• Leaseholders who are occupying the leasehold land.
• Leaseholders who have rented the property to family members, where any rents charge are below market rates.
• Leaseholders who could not afford the lease cost, who have unsuccessfully attempted to sell, and have since moved residence in order to rent the property out.

In the last two situations, evidence of the rental or attempted sale (by a real estate agent) will be required to secure the higher discount.

There may be other circumstances not covered here, where leaseholders want to freehold and these are discussed on a case by case basis.

INVESTORS

HBRC is offering a 10% discount on the purchase price of freeholding for leaseholders who own the property primarily as an investment (i.e. for rent at market rates).

CROSS-LEASE

Where one or more of the cross lessees wanting to freehold are investors, this will result in a mix of applicable discounts. The 10% discount will apply to the portion of the cross-leased property owned by investors, while the remaining cross lessees will be given the 17.5% discount. The prices which apply to each of the cross-leases will be separately notified on settlement.

Assistance with legal fees

HBRC recognises the additional difficulties that cross lease owners may experience in freeholding. Where there are a number of units or homes on a single section, it is more difficult to freehold. Council will provide a maximum of $1000 per property to assist with the legal costs that may be incurred by cross lease owners in freeholding.

There are options for freeholding that can be explored by cross lessees. One option is where a majority of cross leaseholders could freehold the property between them and any leaseholder unable to purchase could then continue to lease from the new owners.

Contact Details
Leaseholders can contact John Keenan at Hawke’s Bay Regional Council on 06 835 9212, or at john@hbrc.govt.nz.
Leaseholders can also contact their Regional Councillor for the Napier constituency. Cr Neil Kirton, Cr Alan Dick and Cr Christine Scott are able to discuss leasehold issues, and their contact details on the HBRC website or by call Council on 06 835 9200.

ENDS

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