"Highlighting the inadequacies of the way in which the earthquakes of 2010-2012 were handled by the insurance industry! "

Preliminary Draft Residential Red Zone Offer Recovery Plan – guest blog by Jan Burney

1 Comment

This is the first opportunity to provide your views on whether the Crown should make new offers to buy vacant, commercial and uninsured properties in the residential red zone and, if so, how such offers should be structured.

The Crown wants to ensure it has all relevant information, and has considered all possible options, to inform the development of any new Crown offer. The public’s views are an essential part of this process – any person or organisation can make comments on this Preliminary Draft.”

The Government could have just got on with it and made a new and reasonable offer, however,  you need to know that when a government’s position is legally  defeated, as this matter was, they inevitably try to ascertain how deep and how wide the feeling is which is running against their position.  If there’s not much response, they will be emboldened to continue with an unreasonable position, so it is important that everyone makes a submission. We’ve had enough of dishonesty.

Read the Preliminary Draft Recovery Plan [1.1MB, PDF]

Download the hard copy comment form [540KB, PDF] “


You may be insured, but not one of the unfortunate red zoned families – nevertheless the proposed plan to make ‘offers’ for vacant, commercial and uninsured properties in the residential red zone could impact anyone, including you somewhere in the future. So ask yourself the question:

EQC’s preference is to settle a land claim by providing a cash payment based on the amount it would cost to repair or reinstate the land, but for properties vulnerable to flooding it is often not possible to identify a repair  which is either feasible or able to be done legally. Therefore, in some cases EQC proposes to settle based on ‘Diminution of Value (DOV)’. Diminution of Value or DOV is a settlement based on the long term loss of market value of the insured land (and associated residential buildings) due to the IFV damage.

EQC’s valuers will determine the loss of market value due to the IFV damage. EQC state that they “cannot use changes in ratings valuations by themselves to determine its EQC land settlements. Rating valuations are undertaken by local councils every three years to reflect all factors affecting a property’s value, not just earthquake damage. EQC does not cover any loss of value that the property may have suffered for other reasons,   except that which arises from earthquake damage to the property.”

So you need to ask yourself “Did my Rateable Value drop in the latest rating valuation round”?  If so and the property has a DOV, and that DOV is not contestable (as per the EQC fact sheet) perhaps any offer to purchase properties that were not able to get insurance and/or are non-consentable, could be purchased at a lower value – and in some cases meaning that the homeowner will not be able to move on equitably into the future.


Are these `offers` and the surrounding issues being used as a new template for property purchase – over and above the Public Works Act?

Will a `managed retreat` be the new red zone?

I do not want to scare people – but rather I am asking you to consider the implications of offers that are simply ‘arbitrary’ and apparently non contestable and make your considered submission when you have decided why the Government is taking this approach.

The Outcasts and the red zoners did not in any way envisage that they would receive a purchase price of 50% of a 2007 valuation,  despite it being 2011/2012 when the Government made its offers to affected homeowners.  You could be next!

This document provides for opinion by other property owners and thoughts on the price point.   It enables you and I to have our say.

The Supreme Court ruled that the 50% offer was unlawful. See
The Supreme Court stated that insurance was “not an irrelevant consideration” but that “other relevant considerations weighed against insurance cover (or lack thereof) being a determinative factor” e.g. the fact that many of the insured anticipated to have been paid more than the insured value of their properties was a relevant factor and should have been taken into account. (See Supreme Court of New Zealand Media release, 13 March 2015).

It is important that you too have your say.

Personally, I would avoid the on-line submission form as provided on the CERA website as I believe that is highly manipulative/structured to achieve a desired outcome.

Instead, written submissions can be posted on: using #redzoneoffer

or posted to:

Preliminary Draft Comments, Residential Red Zone Offer Recovery Plan, Freepost CERA, Canterbury Earthquake Recovery Authority, Private Bag 4999, Christchurch 8140


~Future Proofing for a sustainable, participatory, democratic society.

Author: Sarah-Alice Miles

Love to write, create and watch the clouds move across the sky - these days in the Netherlands. 'Art allows us to find ourselves and lose ourselves at the same time'.

One thought on “Preliminary Draft Residential Red Zone Offer Recovery Plan – guest blog by Jan Burney

Leave a Comment

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s