CANTERBURY EARTHQUAKE

Options For Red Zone Property Owners

Property owners in Christchurch’s worst hit eastern Suburbs will have welcomed the announcement of the Governments plan to buy land and/or buildings from home owners. The measures were unveiled today by Prime Minister John Key and earthquake recovery Minister Gerry Brownlee.

All land in greater Christchurch has been categorised into zones, Red, Orange, Green and White with homes in the worst hit Red zone numbering approximately 5,000. The Minister says that the information released today is the most up to date the government has for affected land owners.

All greater Christchurch land has been mapped into four zones – red, orange, green and white.  At the same time, the website www.landcheck.org.nz has gone live today and Christchurch residents will be able to check which zone their property falls into.

Red Zone

Land designated as being in the Red zone is seen as being the worst hit and is unlikely to be able to be satisfactorily remediated for rebuilding purposes for a considerable time. Areas which are in the Red zone generally share the following characteristics.

• Damage to land in the area is extensive and affects a significant part of the suburb;
• With ongoing aftershocks there is seen to be a high risk of further damage to land and buildings, and;
• Engineering solutions to remediate the land would have a high degree of uncertainty and would be uneconomic and;
• Because of this any repairs would be protracted and take an unacceptable length of time.

The Minister maintained that the level of repairs which would be required to land in the Red zone is so extensive that homeowners could be out of their homes for three to five years and that in many areas meters of compacted fill would be required along with extensive perimeter works.

The Choices For Land Owners

The government is offering two choices for those who owned property in the Red zone and had insurance on that property as at 3 September 2010.

The first option is that Government will offer to purchase the property outright at its current rateable value less the sum total of any insurance payments already made to the owners. In this case the Government would take over all insurance claims other than those for contents.

The second option is that the Government will offer to purchase the land only, also at rateable value with the homeowners then electing to continue to deal directly with their insurer with regard to settlement of the claim on the improvements themselves.

Green Zone

The majority of homes in greater Christchurch have been designated as being in the Green zone and given the green light to proceed with repairs and rebuilding of their homes. For the most part home owners will not be required to wait for further area wide assessments by EQC or engineering consultants Tonkin & Taylor.

Orange Zone

The Orange zone will be one where there are many unhappy property owners. There are in excess of ten thousand homes in the orange zone which are in need of further engineer’s assessment. The most recent magnitude 5.6 and 6.3 earthquakes which struck Christchurch on June 13 have caused fresh damage in many homes in these areas.

White Zone

Those areas designated as White zone are non residential areas as well as parts of the city which have still to be mapped.

There are two means of access to information for property owners. The first, as mentioned earlier is to visit the website www.landcheck.org.nz where you can enter your address and determine which zone your property is in. You are also able to download a fact sheet which explains the process for each zone. Alternatively you can contact the Government helpline on 0800 779 997.

Our experienced property law team at Harmans are available to help existing clients and any others whose homes are in the Red zone and who require assistance with the sale of their land or land and improvements to the Government. If you require assistance in dealing with a settlement with your insurer we are able to help with this also.