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Lawyers urge homeowners to check their options

19 August 2011


Lawyers urge homeowners to check their options

Leading Christchurch law firm Duncan Cotterill is warning red zone residents not to accept any offer from CERA at face value, but to assess all of the options available to them.

Owners of residential property located in the red zone, who have signed and returned the CERA consent form, will shortly receive an offer from CERA to buy their properties.

For properties in Christchurch City, CERA is basing their offers to homeowners on the current rating values which date back to 2007. In the Waimakariri District, the offer is based on 2008 rating values.

Richard Lang and Suzy Garnett, of Duncan Cotterill, said there were several issues homeowners must consider.

“Even though the offer is based on the current rating value of the property, any payment homeowners receive will be minus any money they have already received from the Earthquake Commission and/or their private insurer, that wasn’t used to repair the property. Any payments that have been used to repair the property will not be deducted from the payment.”

They said homeowners who disagreed with the current rating value had limited opportunities to object in the hope that the offer would be increased.

There were likely to be only two situations where an adjustment in the rating valuation would be considered:
1. Where homeowners can show that the land records of either the land area or dwelling area of their property is incorrect.
2. Where owners have undertaken building work on the property for which a code of compliance certificate has been issued but that work is not reflected in the current rating valuation.

“If you fall within one these categories then there is an avenue to have your rating valuation reviewed,” according to Lang and Garnett.

They said there would be many situations where properties had been improved but where no consent was involved, or where the rating valuation did not actually reflect the market value of either the land or buildings.

“While it might be natural to think that these situations should lead to an adjustment in the offer, CERA’s position is that they will not.”

An owner may face further difficulties if they did not object to a rating valuation, at the time it was issued, that was lower than they thought the property was worth - or objected to their rating value being too high, in order to pay rates at a lower level. In these situations it is unlikely that any requests to adjust the offer would be considered, Lang and Garnett said.

“A database is being made available to lawyers over the next week which will contain information on the homeowner’s property, including details of their insurance as well as the claims they have lodged with the Earthquake Commission. We urge all owners to talk with their lawyers when they receive their offer from CERA in order to start working through the sale process.”


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