Gisborne property owner says council's low-ball valuation skewing buyout process

The owner of a Gisborne property flooded during Cyclone Gabrielle says a low-ball valuation from the council-appointed assessor is skewing the buyout process.

Shane Fell said buyout rules for uninhabitable properties were stacked against owners, but the Gisborne District Council is defending its process.

Fell is the major trustee of a family trust that owns a Fitzherbert Street property with sweeping views of the Waimata River.

He and his wife Kira Fell-Gramen bought the section in 2016 and, although they now live in Waihi, were based there for three years as they renovated the 1960s house and its surrounds.

After that they returned often at weekends and holidays.

They built a deck and outdoor entertaining areas, and planted a lush lawn and raised gardens.

Now, the house still stands but it is a shell, with wall linings removed, mould growing on window sills, and weeds overtaking the outdoor area.

Floodwater from the river inundated the 1650-square-metre section during Cyclone Gabrielle last year, leaving silt everywhere - more than 500 tonnes.

It has been removed from the dwellings, but the property has been declared as category 3, meaning the risk of future flooding is too high to allow people to live there.

"When I first turned up and saw it I had tears in my eyes, along with the people and family that I brought with me," Fell told Checkpoint.

"It's pretty much just total devastation. It's completely overgrown with weeds. It's quite emotional to talk about it."

Last year the government and the Gisborne District Council announced each was allocating $15 million to buy category 3 properties in the district.

Fell had insurance, so that had taken care of the house. His buyout covers the land.

The council has contracted a third party, Align, to manage the process, which started with a valuation that left Fell in shock.

"According to the Gisborne District Council's so-called valuation - they valued it at considerably under a million dollars.

"The valuations I have and market appraisals from local real estate agents value the property at between approximately $1.25m to $1.5m," Fell said.

The council said if a property owner did not agree with a valuation the owner could get one themselves, and if there was a difference the two valuers would meet and discuss a solution.

If there was no agreement between them a third valuer would come in and provide a ruling.

But Fell said any negotiation or decision that included the low-ball valuation was unfair because it skewed the start point.

"All the category 3 people are asking for is a fair outcome and the way the Gisborne District Council has managed this process, and their policy, is not fair.

"It's heavily one-sided."

Fell also has concerns the council valuation was not up to industry standards and, because it was done by the same company that does the council's valuations for rates, was not independent.

The council rejects this, saying a different valuer at the valuation firm runs the rateable valuation process.

But Fell is not alone in being blindsided by a low valuation.

Another property owner in category 3, who did not want to be named, told Checkpoint he too was facing a battle over the huge difference between the initial assessment and the one he subsequently funded.

"The council refused to accept our independent valuation and continued to run with the valuer who made significant mistakes, one being that the property was not measured, and [they] came back to measure three months later after their valuation was completed.

"That valuation should not be considered."

Fell is also concerned the Gisborne District Council is only offering property owners $1500 for legal advice, whereas Napier and Hastings allowed $5000 and then a further $5000 for sale and purchase agreements, if negotiations went that far.

The category 3 buyout process was not covered by the Public Works Act, but Fell would like to see consistency with the statute that required payment to property owners for legal costs.

Not doing so could leave vulnerable owners without the means to obtain advice or their own valuations feeling backed into a corner, Fell said.

Council director of sustainable futures Jo Noble said the officials tried to design a fair system.

"We had to look very carefully at what was affordable for our council," she said.

"We've tried to get that balance right between helping our category 3 property owners, but maintaining a level of support that's affordable for our ratepayers and the taxpayers."

The company doing the council valuations, Lewis Wright, referred Checkpoint to the council for comment.

Noble had no problems with the company's work and said in cases of dispute a third valuer with no connection to the property was brought in.

"We're using the same valuer for all our valuations. They are a local valuer that knows the market, that understands the community.

"They're acting in accordance with the professional guidelines. They're a professional valuer so I think it's a fair and reasonable offer.

"We're not trying to low ball anyone. We're trying to make a reasonable market-based offering and valuation."

Out of 53 properties in the category 3 buyout process, Noble said one sale was completed, 14 were almost there, and six were disputing valuations.

Category 3 owners were not disadvantaged in the process, she said.

"People have had over a year now to think about what would be a reasonable offer, what would be an offer that would allow them to move on and provide them certainty.

"This is the first time we've made this kind of offer, so it's a new situation, it's a novel situation, but we really want to provide these category 3 property owners with a pathway forward."

As for Fell's home, Noble said the council was waiting on copies of his independent valuations before the valuers could discuss the situation.

Fell said this was a surprise, as he had provided that information, but would forward on the copies.

If that went nowhere he was prepared to take legal action.