As has been said since before the announcement, Option 1 isn’t enough to get people back into the situation they were in before the quake – which Key and Brownlee promised. A hell of a lot of land was valued well below market price. Not to mention un-notified or post-2007 upgrades to houses. Those aren’t caught by the 2007 GVs.
Brownlee simply refuses to acknowledge there is a problem. CERA boss Roger Sutton says “we haven’t written the rules yet” around these issues. What the hell? Govt has had months to come up with these rules. The hard part, surely, is the geotechnical work, not the buy-out rules. Can understand that there’s a big ‘orange/white’, actually ‘grey’, zone of houses that are in the ‘don’t know’ category. Can’t understand that the rules for each category aren’t in place.
Sutton also says: “There are only about 50 people uninsured among 5000, but you have to be careful. There are sad stories but you can’t start paying out to the uninsured.” Simple question: why not? The buy-out isn’t an insurance payment.
Next: problem with Option 2. Insurers refusing to payout for replacement on red zone houses that aren’t write-offs. Some red-zone homeowners are looking at suing the insurance companies. Might feel good. Wouldn’t work. Insurers are within their rights. They’ll argue a) the homeowners have the choice not to sell their land to the government’s or b) force majeure. Homeowners’ beef is with the govt, which should have fixed this obvious problem. How? By telling insurers to payout for replacement and then making up the difference between actual insured damage and that payout.
Government can’t argue they were ignorant of this issue. Not just because I thought of it straight away or because actual examples came out within a day of the announcement. Brownlee had been told about it by insurers: ‘insurance companies had been “quite clear about their position” during several months of discussions with the Government’ – according to The Press.
Get that clear: Brownlee knew about this issue for months and has done nothing about it. Sutton says “Decisions were only made two days ago and we haven’t written the rules yet”. But Brownlee has been sitting on this info for months doing nothing.
What happens if you refuse to be ripped off under options 1 or 2? The government will wait you out, then buy you out compulsorily. Andrew Geddis explains:
Let’s say you are unlucky enough to be in the “Red Zone” (which likely will expand, note, as the “Orange Zone” and “White Zone” land gets looked at more closely). And let’s say neither of the Government’s two offers work for you … in that you think they leave you in such a bad financial state that you can’t afford to take them. What then?
Well, one prospect is that you will end up as a lonely hold-out in a largely deserted area of demolished houses with little in the way of services. That in itself will be enough, I suspect, to get most people moving out irrespective of the financial hit they have to take.
But let’s say that, although it is in the Red Zone, your house is in reasonable shape, it still has services, and you just don’t want to (or really feel you can’t) leave. What then?
Well, at the moment, the Government is speaking the language of offers. According to the press release, “Residents will then have nine months to consider the offer of purchase.” Which may make it sound like the decision rests with the land owner – if you don’t like the offers, then you can just stay on living there.
Except … probably not. Because lurking behind the Government’s offers is the Canterbury Earthquake Recovery Act 2011, and in particular section 54. Under that section, “The Minister may acquire land compulsorily by causing a notice of intention to take land in the name of the Crown to be published in the Gazette and twice publicly notified … .”
Now, we can’t say for absolute certain, and the Minister himself may not yet know for sure, but I think it’s pretty clear that there won’t be anyone allowed to stay living in the Red Zone. That’s certainly the implication of this news story. So folks who won’t sell voluntarily will, I suspect, find themselves selling involuntarily after 9 months.
Except, here’s the rub. If your land is acquired compulsorily under the Canterbury Earthquake Recovery Act 2011, you get compensation under subpart 5. And that compensation is determined by the Minister in accordance with s.64.
And s.64 makes it crystal clear that “in the case of the compulsory acquisition of land, [compensation is determined] as at the date of the compulsory acquisition”; meaning “the Minister must determine compensation having regard to its current market value as determined by a valuation carried out by a registered valuer.”
It’s amazing how quickly this has gone from ‘we’ll stand beside you’, ‘no-one will be worse off’ to ‘screw you, take the crappy offer, or we’ll take the land at our own price’. But that’s what you get with a Tory government and an incompetent, non-empathetic minister.