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Category 3 Voluntary Buy-out Programme

It is important to note the information included on this webpage is a summarised and simplified version of what is contained in the Policy. It does not override the policy document and, in the unlikely instance of a perceived conflict between the policy and this information, the policy will guide the implementation of the Category 3 Voluntary Buy-out Programme.

The purpose of the Hastings District Category 3 Voluntary Buy-out Programme (the ‘Buy-out Programme’) is to remove intolerable risk to life from any future flood events in Category 3 areas and to provide some certainty for people so they can move forward with their lives and settle somewhere safer.

In August, the Crown announced a cyclone recovery funding package for Hawke’s Bay , which included a 50:50 cost sharing agreement with Hastings District Council and Napier City Council for the voluntary purchase of residential Category 3 properties with a dwelling or, in the case of larger and/or mixed-use properties with a dwelling, the payment of a relocation grant.

In September 2023, the councils each adopted an amendment to their Long-Term Plans to enable this new activity of making purchase offers to acquire Category 3 land, as well as the Category 3 Voluntary Buy-out Policy (the ‘Policy’) which sets out how the purchases will be undertaken.

Voluntary Buy-out Dashboard

The dashboard below shows progress being made in the different stages of the voluntary buy-out process and includes both Hastings and Napier properties. See below the dashboard for a glossary of terms.

Dashboard heading Definition Notes
Total Currently Eligible Category 3 Properties  Category 3 properties that contained a house as at 13 February 2023, or the Councils are satisfied that there was a clear intention to build a residential dwelling for the owner or their family. The number of eligible properties will reflect those properties that contained a house as at 13 February 2023 and those considered eligible via the ‘special circumstances’ process.
Meetings to Schedule Eligible category 3 properties that have not yet organised their first meeting with the Voluntary Buy-out Office (VBO). All owners of eligible category 3 properties have been contacted by the VBO, but some have not yet organised their first meeting.
Meetings Scheduled Eligible category 3 properties that have a date and time confirmed for their first meeting with the VBO. Category 3 homeowners can organise a meeting via their dedicated category 3 connector.
Meetings Complete Eligible category 3 properties that have completed their first meeting with the VBO. After the first meeting, information about the property is gathered and handover notes prepared for the valuation process.
Valuations Pending Eligible category 3 properties that have been allocated to one of Council’s panel valuers. Owners may also elect to obtain their own valuation, which is not included in the dashboard number.
Valuations Complete Eligible category 3 properties that have progressed through the valuation process. This step is complete once the Councils’ Valuation Manager has completed his review of the valuation(s).
Offers Underway Basis of offer reviewed by Independent Advisory Panel and offer made to owner. This covers the period from the offer being sent to the owner, to the offer being fully signed.
Offers Approved Offers fully signed, i.e. signed by the owners and Council’s Chief Executive. A binding agreement has been reached.
Settlements Complete Eligible category 3 properties that have received payment as agreed with Council. Ownership of the property or residential improvements transfers to Council.

Voluntary Buy-out Demolition Status Dashboard

The dashboard below shows progress being made with asbestos testing and demolition of Category 3 dwellings. Please select a Category 3 area from the drop-down list in the right-hand corner of the dashboard to get a summary of the data for that area. Please note, the number of ‘Properties Settled’ in this dashboard will always lag the “Settlements Complete” in the Buy-out Dashboard above as this dashboard is updated once a week and the dashboard above is updated in real time.

Origins of the land categorisation framework for Hawke’s Bay

Following the devastation of Cyclone Gabrielle, the Government announced three risk categories for Cyclone affected land, which Hawke’s Bay Regional Council (HBRC) has been responsible for applying across the region. Category 3 refers to the areas where it is no longer safe for people to live due to an intolerable risk to life in any future flooding event that cannot be mitigated.

On 3 October, 265 properties across the Hastings District were confirmed by HBRC as being in Category 3 areas. These span parts of Eskdale/Esk Valley, Pakowhai, Dartmoor, Tangoio and Aropaoanui and include small residential properties through to larger, mixed-use properties, for example orchards or vineyards with a home.

For information relating to HBRC’s process to confirm Category 3 areas, including maps showing properties within HBRC’s Category 3 areas as mentioned above please refer to the regional land categorisation website here.

Eligibility and inclusions

To be eligible for an offer under the Buy-out Programme properties must have been confirmed by HBRC as Category 3 by 3 October 2023and, as at February 13 2023, have had a residential dwelling situated on that Category 3 land. Council recognises that there may be special circumstances which mean the situations anticipated by the Policy don’t apply in all cases. These special circumstances are outlined in sections 6 and 7 of ‘the policy’.

Eligible property owners who wish to participate in the Buy-out Programme will receive an offer from Council for the purchase of their properties or, in the case of larger and/or mixed-use properties or for those with residential properties who wish to retain ownership of their land, the payment of a relocation grant. These offers will be based on market value as at February 13 2023, before the cyclone occurred.

At the time of settlement, Council will reimburse participating Category 3 property owners for professional valuation and legal advice received prior to the initial offer, up to maximum of $5000 (excl. GST). Participating Category 3 property owners will need to provide copies of invoices for them to be reimbursed. In addition, Council will also pay reasonable legal costs related to finalising the Sale and Purchase Agreement and conveyancing costs up to $5000 (excl GST).

The Buy-out Programme is voluntary, which means there is no obligation to receive, consider or accept an offer from Council. Offers will be made on a case-by-case basis and depending on individual circumstances, including your insurance status as well as the nature and size of your property, there may be more than one option available to you.

The options summarised

If you have private insurance and a dwelling on your property as at 13 February 2023

Under Options 1a and 1b Council will purchase the entire property (house, residential improvements and land) at market value (as at 13 February 2023). This is only available to eligible properties 2ha and under in size.

Under Option 1a, insured eligible property owners will receive market value for their land, house and residential improvements (as at 13 February 2023) less any insurance payments received that were not spent, in good faith, on repairs to the house and residential improvements.

Under option 1b, insured eligible property owners can keep all insurance payments received for their house and residential improvements and receive, from Council, market value for their land (as at 13 February 2023), less any payment by EQC for damage to the land that has not been spent, in good faith, on repairs to the land.

Under Option 2a and 2b, Council will purchase the house and residential improvements (as at 13 February 2023) as well as pay a relocation grant which is an amount equivalent to the difference in market value of your land with and without the right to use it for residential activity. Under these options, the property owner will retain ownership of the land. These are the options available to eligible properties over 2ha in size, as well as eligible properties 2ha and under in size where the property owner would like to retain ownership of the land.

Under Option 2a, insured eligible property owners will receive market value for their house and residential improvements (as at 13 February 2023) less any insurance payments received that were not spent, in good faith, on repairs to the house and residential improvements. They will also receive a relocation grant (explained above).

Under option 2b, insured eligible property owners can keep all insurance payments received for their house and residential improvements and receive, from Council, a relocation grant (explained above).

Given the purpose of this policy is to remove the risk to life involved with people continuing to live in areas confirmed as Category 3, if a property owner did not have private insurance but had a dwelling on their property as at 13 February 2023, they are still eligible for a voluntary offer. The option(s) available will depend on the size of the property.

In the case of bare residential, mixed-use or commercial land without a dwelling, if there is clear evidence of advanced plans to build a dwelling, Council may extend an offer that reflects the loss of right to develop a residential dwelling on your land.

For a more detailed explanation of eligibility criteria and the options, including which might be best for your specific situation, please refer to our Category 3 Voluntary Buy-out Policy Supporting Guide here.

FAQs

  • These FAQs relate directly to the Hastings District Council Category 3 Voluntary Buy-out Policy and associated Category 3 Voluntary Buy-out Programme. For all questions relating to the Land Category of your property, please refer to Hawke’s Bay Regional Council information.
  • These FAQs are being updated regularly in response to new information and questions from impacted community members.
  • We recommend you read the Category 3 Voluntary Buy-out Policy (here) and the Category 3 Voluntary Buy-out Policy Supporting Guide (here) carefully to understand how it may apply in relation to your specific situation.
  • It is important to note the information included in this webpage is a summarised and simplified version of what is contained in the Policy. It does not override the policy document and, in the unlikely instance of a perceived conflict between the policy and this information, the policy will guide the implementation of the Category 3 Voluntary Buy-out Programme

The Council’s Voluntary Buy-Out Policy only applies to properties which have been classified by Hawke’s Bay Regional Council as being in Category 3 and which had a residential dwelling on them at the time of Cyclone Gabrielle. 

There may be special circumstances where the Council is prepared to make an offer where Category 3 land did not have a dwelling but only where specific criteria are met (see “What if my land does not have a house on it?” below).  The Council also has a general ability to make an offer in special circumstances (see “What if I don’t quite fit any of the options?" below).

The Council’s offer is not available to:

  • properties used for commercial or industrial activities
  • bare land with no clear evidence of advanced plans to build a residential dwelling.

There are a few things that need to happen before you can receive an offer:

  • if you are insured, your insurance claim has been settled with your insurer
  • a preliminary meeting has been held between you and the Council’s representative
  • you have signed the preliminary agreement and provided the Council with all insurance information
  • the valuation process has been completed. 

Hastings District Council or Napier City Council connectors will be available to help guide you through the process and connect you to different services depending on your needs.

You can make this decision at any time up to the final offer being presented.

A relocation grant is a payment which, in combination with the amount received from the Council and/or your insurer for your house, is intended to enable you to move to a safer area to live.  As part of accepting the offer, a covenant will be registered on the title to your land which prevents it being used for residential activity in the future.  The amount of the grant will be calculated by a registered valuer as being how much your land was worth prior to Cyclone Gabrielle (i.e. with your right to live on it) minus how much it is worth with the covenant on it (i.e. without the right to live on it).  The difference in value is the amount of the grant. 

If you accept the Council’s offer, any dwelling and residential improvements will be removed from the land, and a covenant or similar legal instrument will be will be registered on the title to the land which prevents it from being used for residential activity and also prevents you from opposing any future plan change which seeks to restrict or remove the ability under the District Plan to undertake residential activity.

While you will not be able to use the property for residential activity, you will still be able to use it for any other purpose you were able to use it for prior to Cyclone Gabrielle. Typically this will include land based primary production activities, but you may also be able to undertake commercial or industrial activities (in accordance with the District Plan or a resource consent). 

If you accept a Residential Relocation Offer (Option 2A, 2B or 2C), you continue to own the land.  To ensure that the land is not used for residential activities (either by the current or any future owner) a term of the offer will be that a covenant in gross or similar legal instrument is registered on the title of the property. This covenant reflects the fact that Council is paying you the value of being able to use your land for residential purposes. It gives notice to all owners that the land cannot be used for those purposes and means that you cannot later argue that you should be allowed to do so. 

The Council encourages you to seek your own legal advice to understand how a covenant works and what it means for your property. 

The purpose of the Council’s Category 3 Voluntary Buy-Out Policy is to remove risk-to-life from people living in Category 3 areas.  Where your property is in Category 3, but you did not have a house on it immediately before Cyclone Gabrielle, there is no automatic right to an offer.  However, you may apply for an offer under the Policy if you meet certain criteria.  These are:

1. Either:

(a) your land must be located outside the River Hazard Overlay (relevant to properties that fall under the Hastings District Plan) or the River Hazard Area (relevant to properties that fall under the Napier District Plan) and residential activity must have been a Permitted Activity under the relevant District Plan; or”

(b) you had been granted a resource consent to build a dwelling on the land and the consent was still valid on 13 February 2023; AND

2. You are able to provide the Council with evidence that you had a genuine intention to construct a dwelling for use of the owner and/or their family on the land, such as:

(a you obtained plans for a new dwelling

(b) you had applied for a building consent or a certificate to confirm the dwelling was permitted under the District Plan

(c) you had obtained finance for the build

(d) you had taken any other steps which indicate it was more likely than not that a dwelling would be built on the Category 3 land

3. If your land has more than one Category (e.g. part is Category 1 or 2 and part is Category 3), you would also need to show that it is not practical to build the new dwelling on the Category 1 or 2 part of the land.

If Council decides there are special circumstances, and agrees to make you an offer, the terms of the offer will depend on the specific circumstances of your case.  If you think you might want to apply for an offer under this category contact council.

The offer

The Council is engaging a dedicated team who will be the Council’s representatives for the offer process. 

If you are eligible for a Residential Property Offer (Option 1) or a Residential Relocation Offer (Option 2), one of these representatives will contact you to arrange an initial meeting.  The purpose of the initial meeting is to discuss the process and the options available to you.  This will also be an opportunity for you to provide any information you consider relevant to the valuation process and to indicate which option you would like to take. 

At the meeting, you will be asked to sign an agreement that records the process around the making of an offer. You can sign the agreement giving permission at the meeting, or afterwards if you prefer (you are welcome to seek any advice prior to signing the agreement). All insurance claims will need to be settled with your insurer before Council can make an offer so you will need to provide a copy of any insurance information which might be relevant to calculating your offer.  Sometimes the Council may need additional information from your insurer and the representative will ask for your permission to access that.     

After the initial meeting, and once the necessary agreements are signed, the Council will obtain a valuation from a registered valuer, and there will also be an opportunity for you to obtain your own valuation.  There will be a separate ‘Valuation Process’ document which will be provided to you and your valuer.

The Council’s representative will then present you with an offer for you to consider.  The offer will remain open for 3 months but may be extended if there is good progress being made towards an agreement being reached. 

The Council’s representative will attend the initial meeting to explain the process and the available options, and to hear from you about what is important to you in terms of any offer Council might make.  The representative may be accompanied by a valuer engaged by the Council, and sometimes there may be other people there to assist. 

You are welcome and encouraged to bring along a support person and/or a professional advisor, such as your lawyer.

The Council will commission a valuation from an independent registered valuer who will take into account any relevant information you shared at the initial meeting.  You will also have the option to obtain your own valuation from a registered valuer which the Council will also take into account as part of preparing its offer. 

The property will be valued as at 13 February 2023 – the day before the impacts of Cyclone Gabrielle were felt by the community.  This means the valuation will not take into account any damage caused by the Cyclone.

No, the valuations are not decided by the Council. A registered valuer engaged by the Council will independently assess the market value of the property as at 13 February 2023.  You will also have the opportunity to engage your own registered valuer to assess the market value of your property.  All valuations will be completed in line with the Property Institute of New Zealand Professional Practice Standards as adopted at the date of valuation, and the International Valuation Standards (IVS) 2022.

No, it does not. You can choose to opt-out at any time during the process until you sign a Sale and Purchase Agreement.

There are a few things that need to happen before you can receive an offer:

  • if you are insured, your insurance claim has been settled with your insurer
  • a preliminary meeting has been held between you and the Council’s representative
  • you have signed the preliminary agreement and provided the Council with all insurance information
  • the valuation process has been completed 

At the time of settlement, the Council will reimburse you for professional valuation and legal advice received prior to initial offer, up to maximum of $5,000 (excl. GST).  You will need to provide copies of invoices for them to be reimbursed.

In addition, the Council will also pay your reasonable legal costs related to finalising the Sale and Purchase Agreement and conveyancing costs up to $5,000 (excl GST).

The offer will remain open for 3 months after you receive it, however this can be extended if good progress is being made towards an agreement. 

Before making a decision, you may wish to discuss the offer with family and friends, your lawyer, and any lender that holds a mortgage over your property.

No. The process is voluntary and offers will be made on an individual basis.

The Council will work with you to agree on a mutually acceptable settlement date. You must be out of your home by your agreed settlement date.

If you decide to accept the offer, you should advise the Council’s representative of your decision and sign the Agreement that was provided with the offer.  It is likely you will have engaged a lawyer by this time (and there is funding available for this) so they can assist you in ensuring you are happy with the terms of the offer and that you understand the next steps. 

Council will pay a 10% deposit as soon as practicable after the offer is accepted, and the rest will be paid on settlement. 

It is important you talk to your Bank (or financial institution) to understand what is required under your mortgage agreement. As is typical for the sale of a property, the Council will make its payment to your solicitor who will make any payment owing to a security holder (e.g. your bank if you have a mortgage) before paying any remaining amount to you.  Note that this does not apply to payments made towards legal and/or independent valuation costs – these will be paid direct to the owner.

This is a voluntary process, and you do not need to accept the offer or participate in the process.  You are free to reject the Council’s offer, or exit the process, at any time up until you have accepted the offer. 

If you decide to do this, then change your mind, it is up to the Council whether to recommence the process. 

The offer is voluntary, however, if you decide that you do not want to accept the Crown’s offer, you should be aware that:

  • If a consent for a new dwelling or major residential work is applied for, the Council will process the application, but is required to take into account known information about the property’s exposure to natural hazard risk.  This means applications for building consent and/or resource consent on Category 3 land are likely to face significant hurdles to being granted. 
  • The Insurance Council has indicated that insurers may cancel or refuse to renew insurance policies for properties in the Category 3 areas.

The Council encourages you to take your own advice as to your future options for your property should you decide not to accept the offer.  Part of the Council’s Policy is to reimburse eligible owners with up to $5000 (excl. GST) for professional valuation and legal advice received prior to initial offer.

Insurance / EQC

In all cases, you will need to settle any claim with your insurer before the Council can make an offer.  The Council will not “take over” any insurance claims. 

Under Options 1A and 2A, all insurance payments for damage to your property that have been paid directly to you by your insurer will be deducted from the purchase price.  This means you receive the market value of your property as at 13 February 2023, partly from your insurer and partly from the Council.

If you have already spent insurance money on repairs to the property, that amount will not be deducted from the purchase price.  You will need to provide evidence, such as receipts, for all such work undertaken.  This means that you will not be penalised for having started repairs in good faith. 

Under Options 1B and 2B, you keep the insurance payment for your house and residential improvements. Because the insurance payments may have included a payment by EQC for damage to land, that amount needs to be accounted for where the Council is buying the land (Option 1B).  If you retain the land, you also retain the EQC payment for damage to that land (Option 2B). 

If you have already undertaken repairs using proceeds from your insurance, the Council will not deduct these from the purchase price.  This is particularly important for Option 1A and 2A, where usually any insurance proceeds are deducted from the assessed market value. However, you will need to provide evidence of those works having been undertaken, such as receipts, for all repairs or reinstatement to your dwelling to show these were undertaken in good faith. 

Settling all your claims for damage to your property as a total loss (e.g. beyond economic repair) does not limit what option you can choose.  In many cases a total loss will see you paid for the cost of rebuilding a house.  Provided you were fully insured, this amount may exceed the market value for the house, and Option 1B or 2B may result in a better financial outcome for you. 

Yes. The overarching objective of the Category 3 Voluntary Buy-Out scheme is to remove the risk-to-life associated with people living on Category 3 land. Provided you had a dwelling on your Category 3 land on 13 February 2023, you are entitled to an offer on essentially the same basis as if you were insured.

Note that where there is damage to land that would ordinarily have been covered through an insurance contract by EQC, and Council is buying the land, a deduction will be made to account for the costs to Council in repairing the land.  Insured persons also need to account for the land damage component to Council, and this payment is to ensure insured and uninsured people are treated equally.  

You are entitled to pursue all your insurance claims and any rights that you may have under your insurance policy.  All claims with your insurer must be resolved before Council is able to make an offer. 

When it’s time to move

If you would like to relocate your house, garage or any other buildings on your property, you should discuss this with the Council’s representative at the preliminary meeting.  This may include relocating them to a different part of your property that is not Category 3. 

The Council will consider your request and advise whether the requested buildings can be removed.  If they can be removed, any agreed arrangements for the removal of those buildings, including any amounts that you will need to pay to Council for the buildings that you are removing, will be recorded in the offer. These amounts will be deducted from the purchase price for your property.

You must be out of your home by the settlement date. The mutually agreed settlement date will be recorded in your Agreement for Sale and Purchase and is the date that the Council will pay for and become the owner of your property. You will need to have all arrangements in place to move out of your property by the agreed settlement date including:

  • having a new house or alternative accommodation to move to
  • organising a moving company or assistance to remove all your belongings and chattels. You will be responsible for your own moving costs
  • arranging for a final electricity reading and the disconnection of your phone and internet

If your property is tenanted you need to arrange for your tenants to be out of your property by the settlement date. You will need to give the required notice under the Residential Tenancies Act 1986 to end the tenancy. We recommend that you discuss this with your lawyer so that the necessary arrangements can be made. 

You cannot rent your home from the Council. Once the Council has become the owner of your property no one will be permitted to live there. 

You can take all your personal possessions and chattels. Once the property is owned by the Council you will not be able to return to remove anything else from the site.

The Council’s offer includes the dwelling and all residential improvements, and these may not be removed unless it is agreed as part of the agreement between you and the Council.  For instance, you may not remove any part of your kitchen, bathroom, or wardrobes where these are attached to the dwelling. 

Chattels are items that are not attached to your land or the buildings on your land and can be removed without causing damage to your property.

They include:

  • blinds, curtains and drapes
  • unfixed carpets and rugs
  • ovens and stoves that are soft wired or plugged in to the wall
  • light shades and light fittings
  • household furniture
  • garden plants, plant pots, raised beds, sheds and ornaments

You must remove any chattels and possessions, and any other items that the Council or your insurer has agreed to let you take, by the settlement date. Anything that you leave behind will become the property of the Council.

If the Council agrees that you can relocate your dwelling or other building, the timeframe for undertaking the relocation will be recorded in the agreement.  It will be important that the relocation occurs in a timely manner and there may be requirements in the agreement to ensure this happens. 

Where the Council is buying the whole property (Options 1A, 1B or 1C), clearing of a property will begin as soon as possible after the Council becomes the owner.  This is important for safety and security reasons. This means the dwelling and any residential improvements will be relocated or demolished, and the site reinstated. 

Where Council is purchasing the house and paying a relocation grant, the house will be relocated or demolished as soon as possible, and the site reinstated.  “Reinstatement” does not include removing all the silt from a site, or otherwise clearing it to make it suitable for non-residential purposes.  This remains the responsibility of the owner as the owner of the land. 

The Council will cover the costs of removing buildings and clearing a property.  The only exception is any amount paid by EQC for damage to the land, or an equivalent amount if the property is not insured, will be paid to Council where Council is buying the land.  Under Option 1A, this happens as part of deducting the insurance proceeds from the purchase price, but in Option 1B and Option 1C, the damage to land amount is accounted for separately.  This amount will be made clear in any valuation and any offer you receive. 

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