Cornwall Park Trust sues homeowner for rent
The Cornwall Park Trust Board is suing a homeowner who walked away from a $2.2 million Auckland home when lease payments skyrocketed.
The trust board is pursuing Yong Xin Chen for $290,000 after a dispute over lease rentals and the necessity of repairs that resulted in the Greenlane property being abandoned in November 2011 by its owner.
Chen bought the property in 2005 for $450,000, when the annual lease rental was only $8300.
In March 2009, the lease came up for a regular 21-year renewal and the annual rent jumped to $73,900.
John Hannan, acting for the trust board, told the High Court in Auckland today that Chen must have been aware her rents would increase.
"She had purchased the property knowing only three years remained on its 21-year term," he said.
"Every 21 years there's a lot of angst about it, because they do tend to go up tenfold. The rental of $8000 or so for land which is worth nearly $2m is attractive for a time, but then becomes unattractive. That's the cycle that Chen got caught up in."
The property, with its new lease, failed to attract a single bid at action and reverted to trust board ownership.
It is being rented on a short-term basis while the trust board tries to find a buyer willing to take up the lease.
The claim is set down for five days and Chen is expected to give evidence with the assistance of a translator.
The court heard Chen would argue the trust board were not entitled to charge the new higher level of rent as the final determination on how much the property was worth was ongoing up until the abandonment.
Chen would also argue much of the claimed repair bill should be discounted as reasonable wear and tear.
The trust board is seeking $173,000 in rent arrears and $117,000 in what it claims are necessary repairs.
Earlier court appearances heard Chen was the first trust board lessee to abandon her property, but investigation found significant stresses for the 110 homeowners who leased properties on the boundaries of Cornwall Park.
At least seven other homeowners have walked away from their homes as Auckland's booming property market saw rentals skyrocket during the recent round of rent reviews.
Residents banded together to challenge the rent review process all the way to the Supreme Court, but lost.
The hearing continues.