Is your home in Red Zone?

For those in the 'Red Zone' announced by the Government on 23 June 2011.

CERA commences posting their offers to effected property owners from Friday 19 August. Offers will only be sent to those who have signed and returned their consent forms that were sent to them by CERA late June. The letter of offer comes with useful information booklets.

Please complete and return your consent form urgently if you want to receive the Government offer. We can assist you if necessary.

The various insurance companies are also intending to send their information packages to homeowners in the red zone over the coming weeks.
We are advised that people in Kaiapoi we will receive a letter together with the consent form in the next week.

What to do

The sale process has now been finalised and from Monday 22 August we as lawyers will have access to CERA’s database which contains all the information on your property. The letter you receive will contain a QPID number and PIN which will allow us to track and complete your sale.

The way to think about this process is to act as if this is a normal sale of your property but in this case you are selling to the Crown. You will be entering into an Agreement for Sale and Purchase, transferring the land and completing settlement.

In relation Option 1 (The crown purchasing land and house);
It is important to remember that you are assigning your rights to your EQC and insurance claims to the Crown. Therefore it is imperative that you have all the information with you regarding the claim including sums you have already received. Before the agreement is signed we need to complete a reconciliation of your insurance/EQC payments to determine the final purchase price.

Review of Rating Valuation
There is limited ability to review your Rating Valuation. The grounds include:

there was an error of fact in the rating roll in determining the most recent Rating Valuation (i.e. incorrect land or dwelling error); or

there is consented building work that was completed after the most recent Rating Valuation and that remains to be reflected in an update of that valuation.

Other Relevant Information

Deposit
If settlement is more than six weeks from the date of the Agreement there is the ability for the Crown to pay a deposit of fifty percent (50 %) of the purchase price. This may help if you wish to purchase another property and settlement date is delayed.

Chattels
The Crown is not purchasing chattels. Chattels therefore belong to the homeowner. Care needs to be taken when considering removing items from the property and we suggest that you obtain further advice on this matter. The crown has the right to pre inspect the property and deductions may be made from the purchase price if fixtures are removed. Further information can be found in the booklet `Purchase Offer Supporting Information’, page 10.

Legal Costs
The Government is contributing towards legal costs. They are paying half the legal costs up to a maximum of $750.00 plus GST for sale of the house and land and $500.00 plus GST for just the land. At this stage it is difficult to estimate legal fees.

Rates
Rates will need to be paid but we will be seeking an apportionment of rates from settlement date.

The information above is a simple summary of the sale process. However, as a homeowner you need to give due consideration to the various options that are presented to you by CERA and your insurance company. We can provide assistance with this as well as any other issues.

Please contact Julie Aitken, Solicitor appointed to co-ordinate and assist with Earthquake related matters - Julie@godfreys-law.co.nz.

Dated 23 August 2011