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Government to make new 'red zone' payment for uninsured homes

Tuesday 21st August 2018

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The government put an end to years of legal battles, announcing it will pay former residential red zone owners 100 percent of the 2007/08 rateable value for uninsured homes. 

The ex-gratia payments will be made to the former owners of 103 uninsured and underinsured red zone properties who didn't take part in the legal action against the Crown and didn't accept earlier offers. The total cost of the payments, expected over the next few weeks, is forecast to be about $12 million, Greater Christchurch Regeneration Minister Megan Woods said in a statement. 

"The plight of people who were uninsured at the time of the quakes has been one of the difficult legacies of the earthquakes," she said.

The payment will be made to property owners who have not already received a payment for their uninsured improvements and will be implemented immediately. 

The dispute originally emerged when insured property owners were offered 100 percent of the 2007 value, something not open to bare land owners which can't be insured, or the uninsured property owners who fell outside the net for various reasons.   

The original 46 Quake Outcasts and property developer Fowler Developments lodged their first objection to the 'red zone' offer to pay half the rateable value of bare land and uninsured property in 2012, claiming it breached the Canterbury Earthquake Recovery Act and their human rights. That dispute went all the way to the Supreme Court which sided with the property owners in a split decision.

All the property owners took the payment, however, a subset still deemed it was unreasonable and again went to the courts to dispute it. The Court of Appeal upheld their challenge, saying the second offer was also unlawful in that an area-wide offer limited the minister's ability to judge each case on its own and was unfair.

According to Woods, the government "carefully considered" a host of different factors in response to the Court of Appeal’s 2017 judgment in the Quake Outcasts litigation. 

Given that "many of the people involved have tested their claims in court, we’ve been given clear rulings that an area-wide approach to red zoning suggested that an area-wide response was required to support recovery – one that did not differentiate on the basis of insurance status," she said. 

“It’s time to resolve this longstanding issue and provide certainty for everyone involved." 

Woods also said the Crown is willing to purchase privately-owned red zone properties if the owners are interested in selling their property. 

The new Crown offer would be on the basis of 100 percent of the 2007/08 rateable value for land and improvements, regardless of insurance status.

“We need to stress this offer is voluntary. It is not a blanket or compulsory offer," she said. 

(BusinessDesk)

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