Fair offer needed for Quake Outcasts and owners of bare land

The recent High Court ruling that found that the Government’s offer to purchase uninsured properties and vacant land in quake-affected parts of Christchurch was not done according to the law is a huge breakthrough for a group of red-zone land owners. They have felt so alienated and disenfranchised by Government decisions that they called themselves the Quake Outcasts.

The Crown offer to home owners in Christchurch’s residential red zone was to buy their properties at 100% of the 2007 rating value of their homes and properties.  Many have since accepted.

The Crown only offered half that amount – 50% of the 2007 rating value – to the owners of bare land (which you can’t insure in New Zealand) and a small number of residents who were not insured.

The Quake Outcasts thought this offer was unfair.  They said it was an “abuse of power”.  So in March this year the Quake Outcasts, along with property development company Fowler Developments Ltd which owned 11 sections in the Brooklands area, challenged the Government’s compensation policy through a judicial review action in the High Court.

The Court upheld their concerns.

The Human Rights Commission said that this case raises significant human rights concerns.

Justice Panckhurst said the Government’s decision on the compensation policy and the offers made for vacant land and uninsured properties was not according to law. The Court has directed Canterbury Earthquake Recovery Minister Gerry Brownlee and CERA CEO Roger Sutton to reconsider and “reach a new decision” about purchasing these properties.

The Government should respect the Court’s decision and work out a fair deal for this small group. Instead, Minister Brownlee has just confirmed that the Government will appeal the ruling.

And what does our Prime Minister say? He said that the 50% offer was appropriate and that “one option, of course, is the government just says ‘well okay, thanks very much, it’s been a lot of fun’ [and walks away]”.

The Quake Outcasts deserve a fair deal for their bare land. Not being able to insure it is not their fault. The decision to create the residential red zone and CERA’s clearance strategy of demolishing homes, reducing services and clearing land means they are or will be denied the ability to use their land.

These people have mortgages they have to pay. They want to be able to move on. They can’t do that if they only receive half of the value of their property.

The Government has spent more than $1.7 billion on Crown purchases in the residential red zone. The cost of doing the right thing by the 46 members of Quake Outcasts and Fowler Developments will be a few million more. But it’s the fair thing and the right thing to do.

And it’s about implementing one of the purposes of the CERA Act to ensure that affected communities recover from the impacts of the earthquakes.

6 thoughts on “Fair offer needed for Quake Outcasts and owners of bare land

  1. Fair offer needed for Share Outcasts and owners of shares.

    Not being able to insure shares is not their fault.These people have mortgages they have to pay. They want to be able to move on. They can’t do that if they only receive half of the value of their shares.

    Should the New Zealand taxpayer underwrite investments on the basis they are uninsurable? Or just land? How about investments in land holding companies?

    Discuss.

    Like or Dislike: Thumb up 4 Thumb down 0 (+4)

  2. If you own a house and don’t insure it, why should I, a tax payer, compensate you for your loss. If the government pays out on these claims then why would anyone pay for insurance in the future.

    Like or Dislike: Thumb up 4 Thumb down 3 (+1)

  3. Fair offer needed for Share Outcasts and owners of shares.

    Arana! Nice to see you back.
    Excellent points btw.

    Dave – I agree wholeharetedly. If you can’t insure an improvement, you shouldn’t own it. Land is a bit tricker but in the end, force majeure and common sense does need to apply.

    Life is not without risk.

    Like or Dislike: Thumb up 0 Thumb down 2 (-2)

  4. I would like to hear from the banks regarding this issue, as those people who have a mortgage on bare land have lost half the assets backing that mortgage and are thus more likely to be unable to repay their mortage.

    The key point is that the land has lost its value not because it was damaged in the quakes but because the government changed the rules. This is a loss that isn’t insurable, and the government should compensate people fully.

    Trevor.

    Like or Dislike: Thumb up 2 Thumb down 0 (+2)

  5. The key point is that the land has lost its value not because it was damaged in the quakes but because the government changed the rules. This is a loss that isn’t insurable, and the government should compensate people fully.

    You mean just like when Labour unbundled the local loop (essentially a nationalisation of some of Telecoms assets) and prevented Auckland Airport shareholders selling their shares?

    Yes, let’s have the state compensate property owners when the state changes the rules.

    Like or Dislike: Thumb up 1 Thumb down 1 (0)

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