Apartments in payout row
Apartment owners who fought a long insurance battle over their wrecked beachfront homes may be headed to court to resolve a stalemate on splitting the cash.
The 50 owners of the Cave Rock Apartment complex on the Sumner esplanade in Christchurch have become factionalised since their insurance claim was settled last year.
Many of the owners were retirees at the time of the earthquakes and 11 have since died, with their estates now part of the body corporate. The complex includes the 49 apartments and the Cave Rock Tavern at the rear of the property.
Apartment owner and body corporate head Mike White said 45 of the 50 owners had agreed on how to divide the payout and sell the land, while the other five did not agree. A unanimous decision is needed to divide the proceeds.
The body corporate paid owners about 70 per cent of their money in August after the insurance settlement, and the rest remains invested. The deal with with IAG and the Earthquake Commission (EQC) was agreed during mediation after the body corporate halted court action. The insurance settlement remains confidential, but is thought to be about mid-way between the initial $10 million offered by insurers and the $23m sought by the owners.
It is understood that the source of the disagreement is which of the valuations done in different years will be used to divide both the insurance payout and the proceeds of any sale of the 4200sq m of land.
It is also understood that a complaint alleging a conflict of interest has been made to the Valuers Registration Board regarding one of the valuations.
White said it was ‘‘tragic’’ issues remained unresolved for the owners eight years after the earthquakes, particularly for the elderly owners and those who died waiting. Some have struggled to fund mortgages and rates while having to find another home.
While the body corporate members were negotiating and would hold a meeting next week, court action would be the only action if the impasse continued, White said. ‘‘It’s a difficult, difficult scenario. There are two factions.
‘‘We’re not the first body corporate in this position and we won’t be the last.
‘‘It’s frustrating that after this long and difficult battle with the insurers, we might have to spend thousands more. We might have to just throw our hands in the air and say ‘Mr Judge, can you sort it out for us?’ and then we can get on with our lives.’’
One block of the late 1990s complex was demolished in 2012, and the other remains damaged.
White said their situation was an example of the deficiencies of body corporate law.
‘‘Getting unanimous agreement can be impossible, even with a small group of owners.
‘‘You only have to have one person wanting a bigger share of the pot, and they can hold the rest to ransom.
‘‘The rest have to decide whether to agree, or else pay more money to go to court.’’