Whangārei District Council has apologised to tenants after failing to inform them their central-city homes were up for sale to make way for a four-star hotel.
Residents living in the council-owned flats known as Almond Court say they are in limbo after discovering their homes could be bulldozed, following publication of the news in the media.
If the sale is successful the six flats will be bowled for a planned hotel to be built by Millennium & Copthorne Hotels New Zealand, one of the largest hotel chains in the country.
Once cleared by the Overseas Investment Office, the company will pay $2.1 million to Whangārei District Council for the Dent St land.
Last Thursday tenants were hand-delivered letters by council staff explaining the situation after the council realised the omission.
"We had intended to ensure that the residents could be informed in person, but events moved faster than we did," Whangarei District Council's chief executive officer Rob Furlong said.
"We should have spoken to the tenants earlier and we apologise to people who were upset."
The council could not indicate when the sale might be completed except to say the purchaser was following a legal process before the sale was unconditional and a settlement date named.
"We have made a commitment to visit the residents as soon as we know more," Furlong said.
Furlong said the rental agency was aware residents may be needing accommodation and would help them find suitable housing.
The current residents had standard tenancy agreements and would be given at least 90 days' notice once there was any confirmation of development.
It's a blow for those who call the flats home.
Resident James Thickpenny has lived in one of the flats for nearly six years and said the first he knew of the flats being sold was when he spoke with his neighbour after an article appeared in the Northern Advocate last month, which was followed by a letter from the agency.
The father of five had also been dealt another blow only weeks before Christmas when he was laid off from his job.
"I think it was pretty rude to find out in the paper. We live here we should have been told," Thickpenny said.
"We are people too, we aren't just a number on a house. Not knowing if the sale will go through or not has left us in limbo. Finding another place to rent isn't going to be that easy."
The decision to sell the land has disappointed councillor Tricia Cutforth, who said the flats should have been redeveloped for pensioner housing.
"This sale comes at a time when we have a homelessness issue, a housing supply and affordability issue, an ageing population and insufficient housing for older people, a stated desire to see people living in the inner city and to encourage developers to reconfigure their commercial properties," Cutforth said.
"Plus of course, the fact that the flats are about the last period architectural built feature that council now owns, apart from the Old Town Hall."
Cutforth voted against the decision when it was considered behind closed doors by the council in September.
She said plenty of sites, including clear sites for development, were available in the inner city.
"A hotel on the side of a hill on a busy street doesn't seem the best site, quite apart from anything else."
She said during her time as a councillor she had consistently tried to get the flats repaired, renovated and turned into housing for older people.
The council said the sale represented the end of a long process. In October 2012 it consulted with the public to allow the property to be used for a hotel development.
There were 217 submissions received and 17 people presented at a hearing.
Once it was given the go-ahead the childcare centre moved out of the neighbouring old villa to Riverside, and tenancy agreements at Almond Court were updated to reflect that the flats would be vacated for hotel development when the land was sold.
The company managing the flats sent a letter to residents on November 28 pointing out a story had appeared in the media about the conditional agreement on the flats.
In the letter to residents they said they were unaware of the situation and apologised.