Hawke's Bay Regional Council Media Release

15 July 2011

Views Sought on Provisional Leasehold Land Decision

Hawke's Bay Regional Councillors are keen to hear from both leaseholders and ratepayers on their provisional decision to freehold more leasehold land.

The provisional decision was made at the Corporate and Strategic Committee this week [Wednesday 13 July] after Councillors had lengthy discussions about the five options presented, but chiefly focussed on Option 5 with special provisions for cross leases.

The committee recommendation is to grant a discount of 17.5% for leaseholders to purchase their land before 30 June 2012. Council will assist with the legal costs of all freeholding cross lease owners up to a maximum of $1000 per property to recognise the particular legal difficulties these people may experience. The committee also recommended the sale of residual cash flows generated from freeholds to investors on terms and conditions to be approved by Council.

The target proposed for this process to be completed is 31 December 2012. It is intended that the money from this process will be reinvested in regional assets which deliver regional economic development benefits and environmental outcomes as well as long-term financial returns.

The special provision for cross leased properties was necessary, as these leases - where there are a number of units or homes on a single section - are more difficult to freehold. Currently all the leaseholders of a property have to agree to freehold, so any decision could be blocked by a single leaseholder unable to afford to purchase or unwilling to do so. Council discussed an option whereby 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.

Councillors also discussed the implications of selling off remaining properties to a commercial venture or to a social housing agency such as Housing New Zealand.

Voting was 5-3 in favour of forwarding the recommendations for a decision at the Council meeting on 27 July.

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