Sale of a block of ten adjoining earthquake-damaged Christchurch flats was ordered over the objections of one owner claiming her status as an overseas resident entitled her to a greater share of the sale price.
Donggee Zhang lives in China. She purchased a London Street flat in the Christchurch suburb of Richmond in 2016 as home for her son to occupy whilst a student in the city. The two-storey block of flats was extensively damaged in the Christchurch earthquakes. Legal title is held in joint ownership; each flat is owned on a registered lease from all ten owners, known colloquially as a cross-lease title. Owners took cash insurance settlements after the earthquakes. They were left to carry out any necessary repairs individually. Major repairs are impracticable; all flats need to be repaired at the same time. Demolition with a rebuild is the only realistic way forward. Only five of the ten flats are currently occupied. None are insured.
The High Court was told a $1.08 million offer was made in December 2018 to buy the entire site; all ten flats. This offer remains open until the end of September. Nine owners have agreed to sell. Ms Zhang did not. She said: accommodation was needed for her son; a sale should be deferred as property prices will rise; and she demanded a higher share of the sale price as compensation for perceived difficulties faced by her as an overseas investor looking to buy a replacement property in New Zealand. In the months prior to a court hearing forcing a compulsory sale, Ms Zhang said she would agree to a sale provided she received enough money to buy a replacement property.
Associate judge Paulsen said Ms Zhang provided no evidence of how she might be prejudiced by a forced sale. She provided no evidence of eligibility to live in New Zealand. She could rent accommodation for her son whilst he remains a student in Christchurch.
Judge Paulsen ordered a Property Law Act forced sale of the ten owners jointly owned interest in London Street. Sale price is to be no less than $1.08 million, divided into equal shares. Current market value of London Street was described as $950,000 on an ‘as is’ basis with all ten flats sold together; three million dollars if all the flats were repaired to current code compliance.
Rozee v. Zhang – High Court (30.08.19)
19.158