The Government's plan to sell more than 1100 state houses in Tauranga has been labelled "illegal" and "irrational" by a lobby group fighting the proposed transfer.
The sale is being challenged in The High Court today, with ministers accused of not knowing enough about the contracts.
Lobby group State Housing Action in the High Court at Wellington on Wednesday argued the proposed transfer of the 1124 properties to IHC subsidiary Accessible Properties was illegal because the minister hadn't considered a transfer contract as they were required to do.
Its other argument is the decision to sell was irrational and Housing Minister Bill English and Social Housing Minister Paula Bennett hadn't taken into account relevant matters.
The Government wants to sell about 2000 of 64,000 Housing NZ properties to social housing providers, who must then make them available to social housing tenants. The transfer of 280 properties in Invercargill has already fallen through and SHA believed the precedent-setting Tauranga deal represented the sale of $200 million of state assets, the group's lawyer Michael Sharp told the court.