Go-between demand in leasing row

A Cornwall Park Trust Board lessee wants a mediator appointed to sort out the long-running dispute over payments and other issues on 110 Auckland properties. Photo / Richard Robinson

A Cornwall Park Trust Board lessee wants a mediator appointed to sort out the long-running dispute over payments and other issues on 110 Auckland properties.

Terry McFadgen, a top ex-Fletcher boss who now lives in Australia but whose family leases a Maungakiekie Ave property, says the situation needs to be resolved.

Only a mediator could sort out the lessees' disputes with the board after several years of problems, he said.

But the board's park director, Michael Ayrton, questioned the need.

"We are not sure why the call for a mediator has arisen. Having consulted closely with lessees for some time on the new lease we do not see it as necessary," Ayrton said.

The board owns the properties around the base of Cornwall Park where rents are reviewed every 21 years, which means they have not kept pace with the fast-rising Auckland property market, resulting in severe hardships and defaults.

An $8300/year leasehold rent on 21 Maungakiekie Ave spiralled to $73,750/year which sparked a High Court case last year but the board had only a partial victory when it sought $348,284 from lessee Yong Xin Chen and it is now going to the Court of Appeal over that case.

At 78 Wheturangi Rd - where house and land were valued at $1.57 million - the place was advertised with a $1 reserve and its lease sold to Auckland couple Donald and Jenny Gibbs for only $125,000 last month.

To resolve issues, the board has now proposed a new lease with shorter rent reviews every seven years and financial incentives of $5000 in legal and financial fees or $15,000 maintenance payment if lessees agree.

Ayrton said the reaction had been positive. But David Glen, with a Campbell Rd leasehold property, and others criticised the new lease, saying it was not in lessees' interests to agree.

McFadgen said Cornwall Park income was being compromised by the disputes.

"The failure to get a new lease sorted out should be a matter of widespread public concern because it's the park that is being hurt as well as leaseholders."