Fendalton landowners paid hundreds of thousands of dollars compo prior to February earthquake
A group of property owners in the upmarket Christchurch suburb of Fendalton received massive payments for their earthquake-damaged land after the September 2010 Christchurch earthquake.
The EQC Fix group says the payouts are a bad look, with many other property owners unhappy with Earthquake Commission (EQC) land damage payout offers more than five years later.
Greater Christchurch Regeneration Minister Gerry Brownlee said the payments, of approximately $595,000 to four Fendalton homeowners, were made as a result of circumstances at the time.
Cabinet documents, provided to Stuff, show the Government agreed that EQC pay for the insured value of the owners' land where the cost of remediation work was greater than the insured value.
It was believed these payments were justified, but their size may have created "optic risks" for the Crown.
After the September earthquake, the Government was embarking on large-scale land remediation in severely damaged areas. This included rock-piling to reinforce the banks of the Avon River.
Cabinet, on EQC's advice, agreed to appropriate $140 million to fund the work.
"Based on this decision it was recommended that five isolated residential properties [the four in Fendalton and one in Kaiapoi] that suffered very significant damage in the earthquakes, but which would not have been subject to the proposed area-wide remediation, be settled separately," Brownlee said.
The Government agreed EQC offer owners the value of the full insured land area or the minimum lot size, he said. The costs would be covered by the Government.
In the case of the four riverside Fendalton properties, that amounted to $595,000 each.
"This approach was not dissimilar to how the Crown subsequently approached dealing with far larger numbers of property owners whose land was not practicable or economically viable to repair after the February 2011 quake," Brownlee said.
According to the Cabinet papers, under arrangements in place in 2010, the property owners would only receive EQC payments for the cost of re-levelling their land.
"This translates to approximately $20,000 per property. This is much lower than the insured value of the land at $2.55 million."
Brownlee said: "The question simply was what is the fastest way forward for people on that particular stretch of river bank?"
"It is well known that the scale and nature of what the Crown was faced with in late 2010, and the reasonable options open to it, were completely altered by the subsequent earthquake in February 2011, and subsequent advice and decisions reflect that."
He pointed out if the Crown had paid out the Fendalton sections on the same basis that it did after the February earthquake then they would have been entitled to about $1.5m each.
EQC Fix project liaison Mel Bourke said there would have been numerous properties in Christchurch which had been damaged to the same extent as the Fendalton four.
The payouts were "not a good look", she said, with many Christchurch homeowners who had land damage believing they were offered insufficient payments.
EQC has said some red-zone stayers, on land unsuitable to rebuild on after the earthquakes, could expect payments of about $1000 to settle land damage claims
In May, EQC said about 5400 Increased Flooding Vulnerability (IFV) claims would receive a settlement using the diminution in value process. The average payment for IFV was $23,000, but some were as low as $2000.