Leaseholders ready to fight

Yong Xin Chen abandoned 21 Maungakiekie Ave when her rent rose from $8300 to $73,750 a year. Photo / Greg Bowker

Cornwall Park Trust Board warned of legal battles, as people express shock at lease proposal.

The Cornwall Park Trust Board has proposed a new "modern lease" to resolve long-running dissatisfaction from Greenlane and One Tree Hill residents hit by big rises in leasehold fees.

Leaseholders, charged up to $73,750 a year for 110 prime sites around Cornwall Park, have expressed shock and dismay at the proposal, saying the board has not moved on the unpalatable 21-year rent review period and that the new lease increases the board's powers and disadvantages leaseholders by offering them almost no benefits.

Relationships are marred by long court cases, including the $348,284 High Court action against Yong Xin Chen, who abandoned 21 Maungakiekie Ave when her rent shot from $8300 a year to $73,750 a year, and leaseholders say the board has a very poor track record of behaviour and attitudes towards them.

The Chen case returned to court yesterday over freezing orders over assets.

Leaseholders have had two meetings with the board chaired by John Clark but say the new lease is of a poor standard and no freehold option is proposed.

Tony Larsen, board finance and administration manager, refused to discuss negotiations but confirmed the new lease was out for discussion.

Leaseholders who have spoken out against the board's actions include lawyer John Carter, a partner with Carter Kirkland Morrison, David Glen, who cannot afford to live at his 94 Wheturangi Rd property because of $35,000 annual payments, and Suzie Trewheela, whose ground rent shot from $3995 to $29,000 a year.

Under the proposed new lease, 1930s language has been replaced by modern English, subdivision is permitted, subleasing such as renting will be allowed, monthly leasehold payment frequencies are proposed, five-yearly house painting clauses are struck out because modern paints are more durable, and a new rent-smoothing scheme is put forward, reducing the initial highly costly rent by up to 20 per cent.

"This is balanced by a higher rental in the future. The higher rental is towards the end of the term," the lease proposal says.

But the board has not budged on the unpopular 21-year lease structure, despite leaseholders seeking reviews every five or seven years, which is the case with many Auckland leases.

"An alternative option for addressing affordability concerns would be more frequent market reviews (say five or seven yearly) - with a commensurately lower rent factor," the board says in the document.

"This would require a forecast of long-term land value growth which is inherently difficult in the Auckland market and would expose both the lessees and [the board] to the risk of the actual land value growth rates differing from forecasts. Fixed smoothing avoids the need to do this," the board said.

Leaseholders are worried they cannot sell their properties under either the new or proposed new lease and they have told the board it faces further legal fights.

Lease changes

Cornwall Park Trust Board proposals:

• Smoothing payments over 21 years.
• Subdivision of property.
• Subleasing and renting.
• Monthly payments, not six-monthly.
• Relaxed external painting rules.
• Modern English in new lease.

Source: The Modern Lease, introduction to the draft terms.