Auckland property owners in the way of Auckland Transport's $2.8 billion central rail loop are being warned to be cautious about plans for their places.
Andrew Braggins, a member of Buddle Findlay's resource management and local government team, said some property owners had already been in touch with him after getting letters saying their places were on the route.
"Think very carefully before you spend any money," Braggins advised property owners considering making changes to their real estate.
Even passive investors or landlords who had received letters should examine the implications of their properties being acquired. "You might need to think about it if you have a lease coming up for renewal," he said.
Braggins advises developers, network utility operators, local authorities and financiers and said no formal action appeared to have been taken by Auckland Transport as yet because no notice of requirements had been issued.
"People are stuck in a bit of a hard place because they're expecting something formal," he said of those who had received letters saying their real estate was on the route and may be required.
Auckland Transport has written to 400 owners of 280 properties - some are in multi-unit dwellings - telling them the route was being designated and which properties had been identified as being directly affected. It is holding information sessions for owners so it can answer questions.
Auckland Transport is also wanting to know of owners' immediate plans.
Claire Stewart, CRL project director, says those people considering alterations or development should discuss this with her organisation first. But current property use is not affected, she reassured them.
Property consultants said land owners could call the shots because purchases had to be fair, equitable and reasonable.
Since the large number of properties were regarded as crucial to the success of the loop, those owners were in a position of power, one consultant said.
Owners who disagree with any valuations of their properties have the right to appeal to the Land Valuation Tribunal, run by the Ministry of Justice, and dealing with objections relating to the valuation of a property by a district council or its valuation agent, usually Quotable Value.
Any assessment for valuation must consider "like for like" replacement. Yet many of the properties were unique and replacing them would be almost impossible, particularly in a residential market where prices half as much again as CV were being sought.
"If one was to consider the land purchases and the remuneration to be claimed, then the costs would be land replacement based on where the land owner can buy equivalent land, any improvements or buildings that make that new site like for like, relocation costs, buying out tenants, cost of building special structures for some tenants' special circumstances, legal costs and assessment studies, future time payment value escalation, renovations at new premises, real estate agents' fees and any design fees," said one consultant.
Many property owners had a lot to lose, the consultant said.
Owners of multi-unit developments are being advised to gather via their body corporates and engage resource management lawyers or barristers to get the best deal.
CENTRAL RAIL LOOP COSTS
Expected construction costs: $2.3b
Gross land purchase: $245m
Estimated land sales: $183m
Net land: $62m
Total construction and land cost: $2.36b
Additional electric trains: $336m
Other network optimisation: $140m
Total 2012 costs: $2.8b
Source: Auckland TransportBy Anne Gibson @Anne Gibson Email Anne