A Government department is looking into how and why Tauranga's Bella Vista development failed and whether there is a risk of similar failures occurring elsewhere.

The Ministry of Business, Innovation and Employment (MBIE) said on Monday that it was reviewing several Tauranga City Council building control activities, following the failure of the Bella Vista subdivision at The Lakes.

Members of its Building System Assurance Team would carry out the review by observing, interviewing and collecting information from council staff, and visiting building sites within the Tauranga district.

Initial site visits began on August 30.


"The focus of this review is to identify how and why the failure of the Bella Vista subdivision occurred and to determine whether there is risk of similar failures occurring elsewhere in the Tauranga district," the ministry's acting manager of Building System Assurance, Paul Hobbs, said.

"MBIE is confident that [council] staff will work together with our specialist team to ensure that an evidence-based review is undertaken, which will provide practical and valuable feedback to the council."

A spokeswoman for the Tauranga City Council said it welcomed MBIE "coming on board".

An independent report released in June by former High Court judge Paul Heath QC into the council's role in the failed Bella Vista development found the council acted correctly in some areas and failed in others, including monitoring and inspections.

Heath said there was a need for an inquiry or investigation into "why" the council failed to perform adequately relevant regulatory functions.

Asked about that investigation yesterday – its scope, when it would start and who would conduct it – the council spokeswoman said: "We have no update for you at this time."


Bella Vista Homes went into voluntary liquidation on November 30 last year, leaving behind unfinished houses and millions of dollars in outstanding debts to creditors.

In early March this year, 21 Bella Vista houses at The Lakes were evacuated by the Tauranga City Council, and all but one of them remains unoccupied, fenced off and guarded by security.


On June 6, Tauranga councillors voted in principle to buy the 21 homes, and in late July the council made an offer.

In response, 19 of the homeowners announced they would be filing legal proceedings against the council, but said they were still willing to negotiate to avoid court.

Another lawsuit had already been filed and served on the council on behalf of the other two Bella Vista households, who said they were also proceeding as planned despite the offer.

Then late last month Tauranga City Council announced it had settled with one of the homeowners.

On Monday afternoon, the council said it was still in discussions with the remaining 20 households and had not settled with any other owner.