The High Court has ordered a group of 12 Rotorua flats be sold to recoup debts incurred by the property's owners.
The three blocks of four two-bedroom Ranolf St flats near the corner of Malfroy Rd have just gone on the market and will be sold at auction next month.
The units, which are between 90 to 92 Ranolf St, have been deemed "dangerous and insanitary" by the Rotorua Lakes Council, with building notices posted on the windows of each flat.
The flats, which are connected to landlords Stephen Bhana and his sister, Jasu Bhana, have been the centre of controversy in recent months with tenants taking the landlord to the Tenancy Tribunal as a result of the conditions.
Tenants of one of the few flats still being lived in, Azah Wirangi and Nadia Keil, said yesterday that they were pleased the flats were for sale.
Mr Wirangi said the flats cost $420 a week but they had been forced to pay that amount because of the rental shortage in Rotorua.
He said they kept their flat as clean and tidy as possible but there were still issues, including leaks.
Miss Keil said they planned to move as soon as they could find somewhere else to live.
She had temporarily given her 1-year-old daughter to the baby's father because she didn't think it was safe to have a child living in a flat deemed "dangerous and insanitary".
The High Court ordered the property owners, Ranolf Trust, to pay nearly $290,000 within 30 days of June 12 or lose the property. However, the owners appealed the decision. The appeal wasn't allowed because it was out of time, but the owners disputed that, which meant it had to go to a hearing.
The Sheriff of the High Court at Rotorua, which is the enforcement arm for civil disputes, has now ordered the sale of the property.
An advertisement for the sale said the flats were overdue for refurbishment. However, it said they were in high demand in their day because they were just one block from the central city. It said there was potential for payoff if a new owner rented some while fixing others.
"Rentals are in high demand in Rotorua as is short-term visitor accommodation," the Harcourts advertisement said.
The High Court ruling said Ranolf Company Limited, which is in liquidation, was a trustee of Ranolf Trust between 2004 and 2015.
Jasu Bhana is the only director of Ranolf Company Limited.
The other Ranolf Trust trustees are Jasu and Ashok Bhana, Ranolf Company (of which Jasu Bhana is the only director) and Geyserland Limited (of which Jasu Bhana is only director).
Stephen Bhana is described in the judgment as the settlor of Ranolf Trust.
The High Court ruling said the trust must pay Ranolf Company Limited's debts totalling $287,948.91 - which includes liquidators' costs of nearly $160,000 and four creditors totalling just over $128,200.
The creditors include Redco NZ Ltd for just over $2000 for seismic evaluation of a Fenton St property, the Rotorua District Council for $6900 for unpaid rates, Jaafar Holdings for just over $96,000 in loan payments and McDonald Law for nearly $23,200 in legal services.
The auction will be held on November 9 at 1pm at Harcourts on Whakaue St.
The Ranolf St flats were at the centre of a Tenancy Tribunal ruling in April when Stephen Bhana, described by the tribunal as the property owner, and Jasu Bhana, who acted as the letting agent, were ordered to pay tenants nearly $1800 for failing to maintain a flat in a reasonable state of repair.
The Ranolf St flats also featured on TVNZ 1's Seven Sharp programme at the start of this year after the tenants complained about their living conditions.