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red zone deadline

A message from CERA

Offer Expiry Date – Deadline Approaching

We take this opportunity to once again remind practitioners of the upcoming expiry date of the Crown offer for all properties in the flat land red zones (except South New Brighton and Southshore). Please note that the expiry date applies to all property categories – namely insured residential, uninsured improved properties, vacant land, WDC leasehold properties and commercial properties.

Owners of these properties have until 31 March 2013, whichever comes first, to accept the Crown offer by returning a signed sale and purchase agreement to the Crown Settlement Agent. Given that 31 March falls on Easter Sunday CERA will accepted signed agreements up until 5pm on the 2nd of April 2013. No extensions to this date will be given.

Property owners who have yet to return their consent forms to CERA need to do so immediately to allow sufficient time for CERA to send out a Crown offer letter and to consider the offer and consult with their lawyer and bank before the offer expires. In this regard please note the requirement to submit a signed Sale and Purchase Agreement. The return of a consent form alone will not suffice.

Settlements Database

In light of the offer expiry and the level of urgency and response time required to deal with redzonehelp requests the following measures have been put in place for the settlements database:

The redzonehelp staff capacity has been increased.

  • Helpdesk staff are aware of the urgency for dealing with requests and will deal with requests accordingly.
  • To expedite redzonehelp requests please ensure that;

All requests are emailed to redzonehelp@tonkin.co.nz. Verbalphone request need to be confirmed by email so email should the primary means of communication.
Any request to change or update QPID details needs to be first ratified by the acting crown settlement agent.

For further information, please contact info@cera.govt.nz or 0800 7464 2372.

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Tower tried to force cheaper deal – lawyer

15th March 2013

An insurance company tried to “steamroll” a red-zoned Christchurch couple into accepting the cheaper repair settlement for their earthquake-damaged home, a court has heard.

Matt and Valerie O’Loughlin are disputing the repair value offered by Tower for their Dallington home and have taken legal action seeking full replacement.

The two-week High Court battle which could change the settlement of insurance claims in the red zone finished yesterday with Justice Raynor Asher reserving his decision. The O’Loughlins’ lawyer, Grant Shand, said in his closing statement the couple’s policy entitled them to full replacement.

“The O’Loughlins had a home and under their policy they ought to receive a home they can live in . . . which is not what they are getting now nor can they get it with what Tower proposes,” he said.

Tower had from the start focused on repair, would not consider alternatives, and tried to “blanketly streamroll through” the cheaper option.

Shand questioned the impartiality of Tower’s expert engineering witnesses, as it was “in their interests to support Tower’s position”.

Geotechnical engineer Nick Harwood’s firm had completed more than 600 Tower assessments. Harwood “stretched and bent” his calculations to ensure re- levelling the house appeared viable , Shand said.

The $390,000 repair option offered by Tower, which included Earthquake Commission payments of $203,000, did not produce a “usable” house.

“It ultimately comes down to the wording in the policy and the wording of this policy says, ‘Same condition as when new’. It’s clear,” Shand said.

Christchurch City Council building operations unit team leader David Hutt was quoted in a witness statement as saying there was no reason consent to repair the O’Loughlins’ house would not be granted if supporting engineering advice was provided.

Shand argued Tower’s repair strategy was far from being a position to apply for consent.

More designs, calculations and investigations were needed, he said. “There is a long way to go before we even get to a consent application here. At any point along that way, the [council] could say ‘no’. That is a possibility, so I don’t think it could be said there would be a building consent,” he said.

(Read full article here)

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Red-zone insurance battle expected to wrap up

March 14th 2013

A closely-watched insurance battle is expected to wrap up at the High Court in Christchurch today.

Red-zoned couple Matt and Valerie O’Loughlin are fighting Tower Insurance for a payout of $640,000 to rebuild their Dallington home on a new site.

Tower is offering to pay $390,000 for repair costs.

Tower’s counsel Alan Galbraith, QC, said in his closing statement yesterday the O’Loughlin’s case failed to prove Tower has not met its policy obligations.

Court will reconvene half an hour earlier this morning to hear the closing submission of the O’Loughlin’s lawyer Grant Shand.

It’s hoped the case will wrap up this afternoon.

Judge Raynor Asher is expected to reserve his decision, meaning it will be a few weeks before the outcome is known.

(Read full article here)

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Red Zone Update

The Property Law Section of the Law Society has provided the update below about earthquake red zone properties.


As at 4 March 2013, of the 6750 owners who have now accepted the Crown offer:

  • 1588 have chosen Option 1
  • 5162 have chosen Option 2
  • 5608 have settled to date

We would like to acknowledge the efforts of all practitioners who have acted for red zone owners throughout the conveyancing process, without whom this would not have been possible.

Offer Expiry Date – Deadline Approaching

We take this opportunity to remind practitioners of the upcoming expiry date of the Crown offer for all properties in the flat land red zones (except South New Brighton and Southshore). Please note that the expiry date applies to all property categories – namely insured residential, uninsured improved properties, vacant land, WDC leasehold properties and commercial properties. Owners of these properties have 12 months from the date of their offer letter or until 31 March 2013, whichever comes first, to accept the Crown offer by returning a signed sale and purchase agreement to the Crown Settlement Agent. Given that 31 March falls on Easter Sunday CERA will accepted signed agreements up until 5pm on the 2nd of April 2013. No extensions to this date will be given.

Property owners who have yet to return their consent forms to CERA need to do so as soon as possible to allow sufficient time for CERA to send out a Crown offer letter and for them to consider the offer and consult with their lawyer and bank before the offer expires. CERA requires a minimum of 2 weeks to process a consent form and an offer.

Vacant Possession

Again, we wish to remind practitioners that the Crown offer requires vacant possession on settlement and this is non-negotiable.

As advised in our previous updates, settlement will be delayed if, prior to settlement, CERA becomes aware that vacant possession is unable to be provided by the vendor on the settlement date. In addition, under the sale and purchase agreement, the vendor has no further right of access following settlement.

As advised in our January update, property owners should be advised by practitioners of the importance of vacant possession for tenanted properties. It is the Vendor’s responsibility to ensure that any Tenant has actually vacated the property prior to settlement.
Keys

We continue to face difficulties in relation to the return of keys by vendors on settlement. Accordingly, we wish to remind you that on settlement practitioners must ensure that all of their client’s keys and garage door openers (etc) are forwarded to CERA.

For further information, please contact info@cera.govt.nz or 0800 7464 2372.

Andrew Logan
Deputy Chair

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Assessments of land damage scrutinised

8th March 2013

Land-damage assessments at red-zoned Christchurch properties have gone under the microscope at a High Court insurance wrangle.

Matt and Valerie O’Loughlin are disputing the repair value offered by insurer Tower for their earthquake-damaged Dallington home and took legal action seeking full replacement.

Geotechnical engineer Nick Harwod was yesterday forced to defend his assessment, which contributed to Tower’s decision to deem the house repairable. His calculations, based on the average of three land tests, found the house could be relevelled within the building code guidelines.

The O’Loughlins’ lawyer, Grant Shand, said had Harwood not rounded down the individual figures, the final average should rule out the relevelling option.

Harwood had “tried to produce a number . . . supporting Tower’s repair strategy”, Shand said. His firm, Coffey Geotechnics, had completed more than 600 assessments for Tower.

Harwood said Shand’s implication suggested he had “behaved unethically”.

“You said I tried to do something, but actually I’m independent of Tower. I’ve been commissioned by Tower, but I’ve not been put under any duress or anything like that by Tower to produce a number for them,” he said.

Calculating land damage was not an exact science and averaging the data was “the best we could do”, he said.

There was no “go, no-go number” and the factors must be considered “holistically”.

Engineer Samuel Polson said the O’Loughlins’ property was prone to minor or moderate lateral settlement only and the relevelling repair strategy was appropriate.

Quantity surveyor Peter Eggleton reviewed the cost estimates submitted by Tower and the O’Loughlins’ representatives, World Claim.

World Claim’s initial estimate of $1.35 million was “grossly excessive”, he said.

Eggleton estimated a rebuild on the Gayhurst Rd site would cost $562,000, or $493,000 on good land outside the red zone. His estimate to rebuild on red-zoned land was later increased to $647,500 after he reviewed it with a colleague.

(Read full article here)

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Red-zoners back down on claim

5th March 2013

A red-zoned Christchurch couple challenging their insurance payout in the High Court have reduced their claim by more than $230,000 overnight.

Matt and Valerie O’Loughlin are disputing the repair value offered by insurer Tower for their earthquake-damaged Dallington home and have taken legal action seeking full replacement.

The court yesterday heard the O’Loughlins wanted nearly $900,000 – the estimated cost to rebuild on the Gayhurst Rd site – as well as $50,0000 in damages.

Their lawyer, Grant Shand, said today the figure sought was now $662,975 after revised rebuild costs from a quantity surveyor overnight.

Valerie O’Loughlin has taken the stand to give evidence.

(Read full article here)

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