21 Jun 2016

Chch City Council labelled naive for rates approach

8:13 pm on 21 June 2016

Christchurch City Council is being called naive for relying on people's honesty when deciding how much their homes are worth.

The council is in the process of getting valuations done on 160,000 properties so it can set next year's rates, and it is asking people to tell it if earthquake repairs have not been done so it can accurately assess their property's value.

Christchurch city council

The Christchurch City Council's valuation plan is being called naive. Photo: RNZ / Conan Young

When the valuations were last done three years ago, the government passed a special law allowing properties to be assessed as if repairs had already been done.

This year, the council is moving back to a business-as-usual approach and assessing the actual state of a property.

The fact council is relying on people's honesty was a worry, Christchurch real estate agent Lynette McFadden said.

"I think it's naive of our council to think that everybody is going to be meticulously honest and I think that's what's required when you're dealing with somebody's biggest asset.

"And I think they've got to rely on more than somebody else's honesty."

Lynette McFadden

Lynette McFadden Photo: supplied

Lawyer Duncan Webb said it was unfair to be asking homeowners how extensively damaged their home was when most were not qualified to comment.

Some might even overstate the level of damage in order to get a lower valuation and a lower rates bill, he said.

"It's a very unusual valuation approach. To rely on people to essentially dob themselves in if they haven't fixed up their house is extremely unreliable because people may or may not want that information out there."

Another lawyer, Peter Woods, said there were a large number of houses sold in an "as is, where is" condition by owners who had pocketed the insurance money and not carried out any repairs.

Those looking to buy would be wise to get their own valuations done rather than rely on the rateable value, he said.

The council has contracted Quotable Value to carry out the valuations.

It said it would not just be relying on a person's own assessment of their home and would look at other houses in the area that had sold and any consents owners had applied for to carry out repairs. It would also do physical inspections by parking outside a house and noting its general condition.

Mr Webb said the people of Christchurch deserved better.

"What you really need here is a genuine valuation process. The fact of the matter is that the housing stock in Christchurch has changed drastically.

"Some have been repaired, some have been rebuilt and some haven't been repaired at all.

"So what's really needed is an actual investigation into the value of the houses rather than a once over lightly let's see what the market has done and ask people if they've fixed their houses."

Christchurch City Council chief executive Karleen Edwards said she was confident the system they had opted for would be reliable.

"We need to understand what people have done to their own properties so we need to rely on them providing that information. We're in a unique situation in the sense that we haven't had to revalue in the same sense following an earthquake, so this is a pragmatic approach to that."

The valuations carried out this year will feed into the rates that are set next year.

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