High Court assistance was needed to force sale of a twelve-apartment building in Auckland’s central business district after several owners refused consent. Redevelopment potential of the land likely exceeded cost of repairs.
A 1950s warehouse in Edinburgh Street was refurbished in early 2000s and separate apartments sold off in a project branded as The Zone. Weathertightness defects saw owners facing a repair bill estimated at between $7.5 million and $8.5 million. Expert advice recommended owners sell The Zone in its entirety to a developer allowing the building to be demolished and the site redeveloped. This proposal required unanimous consent from all current owners. Three owners refused to sign up. They offered no alternative proposal. Frustrated, The Zone body corporate applied to the High Court for approvals.
Justice Campbell ordered cancellation of The Zone’s current individual unit titles. The building could no longer be safely occupied by owners and they could not afford to pay remediation costs.
He also ordered sale of the owners’ resulting joint interest in the building. Net sale proceeds are to be divided between each apartment owner. Each apartment owner then has deducted from their share any outstanding body corporate levies and any mortgage secured against the apartment.
The High Court was told Edinburgh Street had been sold ahead of the court application with settlement conditional on court approval for cancellation of owner’s individual unit titles. Online records show Edinburgh Street selling for $8.3 million in May 2021 and selling again for $11.4 million in June 2021.
Body Corporate 210106 v. Apartment Owners – High Court (23.02.22)
22.041