Frequently Asked Questions - The offer

When will I receive my offer letter from the Crown?

You will be sent an offer to purchase your property as soon as CERA has received a correctly completed consent form signed by all the legal owners of your property.

Consent forms must be received prior to 31 March 2013.

If you have not received a consent form it can be downloaded from here Residential red zone consent form [PDF 70KB] or you can contact CERA on info@cera.govt.nz or 0800 RING CERA (0800 7464 2372).

If an offer letter is not received within two weeks of returning your consent form, please contact CERA on info@cera.govt.nz or 0800 RING CERA (0800 7464 2372).

How long do I have to accept the Crown’s offer?

You have 12 months from the date on your offer letter or until 31 March 2013, whichever comes first, to accept the Crown’s offer to purchase your property.

Before making a decision you should talk to family and friends, your lawyer and any lender that has a mortgage over your property.

You should also discuss with your insurer and/or EQC what you are entitled to under your insurance claims so that you can compare the amounts that you will receive under Option 1 and Option 2.

How long can I stay in my home if I accept the Crown’s offer?

The last date that you can choose to settle the sale of your property to the Crown is 30 April 2013. Please note that the availability of this settlement date will be dependent on the level of demand from owners. You must be out of your home by your chosen settlement date under Option 1 or Option 2.

What do I do if I want to accept the offer?

You will need to see a lawyer as only a lawyer can prepare and submit the Agreement for Sale and Purchase. If you do not already have a lawyer, the New Zealand Law Society website (www.lawsociety.org.nz) provides a list of property lawyers. You can also contact Community Law Canterbury (Phone 03 371 3819, or visit www.canlaw.org.nz). A copy of the sale and purchase agreement for each option can be found on www.cera.govt.nz. Your lawyer will be able to talk you through the requirements of these agreements.

Will the Crown make a contribution towards my legal fees?

When you accept the offer, the Crown will pay 50 per cent of your legal costs, up to a maximum contribution of $750 plus GST for Option 1 and $500 plus GST for Option 2. This amount will be paid directly to your lawyer on settlement.

What information do I need to provide to my lawyer?

Your lawyer will need the following information to prepare the Agreement for Sale and Purchase:

  • If you are planning to accept Option 1, details of all insurance payments paid directly to you for the damage to your property together with copies of all invoices or receipts if any of those amounts have been spent on repairing the damage to your property.
  • Your preferred settlement date. This date must be at least three weeks after the date that the Crown’s settlement agent will receive the Agreement for Sale and Purchase signed by you and must be a weekday on or before 30 April 2013. Please note that due to demand your first choice of settlement date may not be available.
  • A copy of your insurance policy or other evidence that confirms the identity of the holder of the insurance policy for your property.

You lawyer may ask you to provide other information that is not listed above to assist him or her with advising you about the Crown’s offer.

Will there be a fast-track process for special cases?

Where there is a need for settlement to occur within a short timeframe (e.g. where people are seriously ill or delays would create severe hardship) CERA will consider fast-tracking the sale and purchase process. Any requests for consideration as a special case should be submitted in writing, along with detailed supporting information, outlining the reasons why to:

CERA Chief Executive
Private Bag 4999
Christchurch 8140

Will I be paid a deposit?

If you require a deposit and have chosen a settlement date that is six weeks after that date that the Crown receives your agreement, a deposit can be paid. The deposit will be the lesser of:

  • 50 per cent of the purchase price recorded on the front page of the Agreement for Sale and Purchase; or
  • $50,000.

Your lawyer will be able to confirm the amount of the deposit that you will receive when you sign the Agreement for Sale and Purchase. The deposit will be paid to your lawyer’s trust account as soon as possible after the Agreement for Sale and Purchase is signed by the Crown. The balance of your purchase price will be paid to you on the settlement date, which is the date that you must be out of your property.

I want to build a new house. Can I receive any amounts in addition to the deposit to help fund my building costs?

The Crown can pay a deposit to you soon after the Agreement for Sale and Purchase is signed and will pay the balance of the purchase price on the settlement date, being the date that you must be out of your home. If you are planning to build a new house you will need to:

  • Choose a settlement date that allows you to receive payment of the purchase price for your property before you start building. This will mean that you will need to make arrangements for alternative accommodation while your new house is being built. You should talk to your insurer to see if you are entitled to a temporary accommodation allowance while your new home is being built; or
  • Fund the building costs from savings, a bank loan or another source.

If you are not able to meet the costs associated with either of the above options you may need to consider purchasing an existing home.

I purchased my property after 3 September 2010. Am I entitled to the Crown offer?

Yes, the offer applies to the current owner.

How does the offer work for cross lease and unit title properties?

Please refer to Unit title properties section for details on how the offer works for unit title properties.

If your property is a cross lease and is separately insured, meaning that it is not insured under the same policy as your cross lease neighbour, the Crown’s offer will work in the same way as it does for any other property.

If your cross lease property is insured under the same policy as all your cross lease neighbours then:

  • You can accept Option 1, without needing to obtain the prior agreement or consent of your cross lease neighbours. However, this will mean that your cross lease neighbours can no longer accept Option 2. For this reason we encourage you to discuss the Crown’s offer with your cross lease neighbours before selecting an option.
  • You can accept Option 2 but only if none of your cross lease neighbours has already accepted Option 1. Your Option 2 agreement will be conditional on all the other owners also accepting Option 2. This means that your agreement with the Crown will be at an end if:
    • the other owners do not accept Option 2 within eight months of the date of your letter of offer, or
    • at any time during that eight month period one of the other owners accepts Option 1 or you notify the Crown that you want to change to Option 1.
Who does not receive the Crown offer?

The Crown’s offer only applies to insured residential properties in the residential red zones. You should check with your lawyer that your land and house is “residential” for the purposes of the Earthquake Commission Act 1993. The Crown’s offer is not available to:

  • Properties used for commercial or industrial activities.
  • Properties that were not insured on 22 February 2011.
  • Properties that are not currently insured for reasons other than the fact that all claims have been fully and finally settled.
  • Bare land.
  • Partly constructed homes.
What will happen to my property if I decide that I do not want to accept the Crown’s offer?

If you decide that you do not want to accept the Crown’s offer, you should be aware that:

  • The Council will not be installing new services in the residential red zone.
  • If only a few people remain in a street and/or area, the Council and other utility providers may reach the view that it is no longer feasible or practical to continue to maintain services to the remaining properties.
  • Insurers may cancel or refuse to renew insurance policies for properties in the residential red zones.
  • While no decisions have been made on the ultimate future of the land in the residential red zones, CERA does have powers under the Canterbury Earthquake Recovery Act 2011 to require you to sell your property to CERA for its market value at that time. If a decision is made in the future to use these powers to acquire your property, the market value could be substantially lower than the amount that you would receive under the Crown’s offer.
What do I have to do between signing the Agreement for Sale and Purchase and the Settlement Date?

The Agreement for Sale and Purchase requires you to:

  • Give to the Crown copies of all information and documents that you have about your insurance and EQC claims. This includes any emails, letters sent or received, notes of telephone calls, photographs or other evidence of the damage to your property (note that if you accept Option 2 the Crown will only require information about the claims for the damage to your land).
  • Keep paying the rates and any other charges for your property until the settlement date.
  • Keep paying your insurance premiums unless your policy expires and your insurer has refused to renew after you sign the Agreement for Sale and Purchase.
  • Lodge any claims that can be lodged with EQC and your insurer for any damage caused by the earthquakes to the extent that you have not already done so.
  • Comply with any reasonable requests that the Crown may make of you to help it advance the insurance claims for your property that it is taking over.
  • Lodge any claims that can be lodged with EQC and your insurer for any damage caused by any new earthquakes or any other event.
  • Maintain your property until the settlement date.
  • Not do anything that would threaten or invalidate your EQC or insurance claims.
  • Allow the Crown to inspect your property at any reasonable time before the settlement date to check the condition of your property and to confirm that you have complied with your obligations.
Can I have my zoning reassessed?

Property owners can ask to have their zoning reassessed by phoning 0800 RING CERA (0800 746 423) or emailing info@cera.govt.nz. CERA will then check your zoning to see if there are any obvious anomalies or errors.