Council puts sinking Ngongotaha homes up for auction

Another chapter in the sinking homes of Ngongotaha is about to be written with three of the four council-owned Western Rd properties listed for auction.

Numbers 66, 76 and 80 Western Rd are advertised on a "as is where is" basis with each listing making it clear the homes have known ground and subsidence issues.

Anyone interested in the properties is advised to obtain a LIM report and a property file from Rotorua Lakes Council and to also seek advice from a solicitor, an engineer and a building inspector.

Marketed by Jon Parrington from Harcourts, the three homes go under the hammer on October 12. Mr Parrington said he had no idea what the properties would sell for.

Council chief financial officer Thomas Colle said the properties, which had been tenanted, were surplus to council requirements.

The Western Rd homes were built as part of the Oakland Estate by developer and former Rotorua district councillor Geoff Kenny. Mr Kenny became fully aware of the subsidence problem in early 2008 when 10-12 homes had already been built in the estate.

Movement in some soil layers, caused by the weight of the buildings, was blamed for damage to homes, ranging from out-of-level floors and loose bricks, to doors and windows that would barely close, and cracks in foundation walls.

In 2012 the Department of Building and Housing reversed consents for three of the properties.

In July 2013, and after a lengthy battle, the council, Mr Kenny and the engineers involved reached a confidential out-of-court settlement with seven property owners worth more than $5 million.

At the time Rotorua Lakes Council chief executive Geoff Williams said the council had bought four of the least damaged houses with Mr Kenny buying the others.

"The properties the council has taken interim ownership of cost approximately $1.2m. However they are repairable, so remediation work will be undertaken and they will be resold. Our expectations are that a substantial amount of our purchase costs will be recouped," Mr Williams said at the time.

However Mr Colle said yesterday options for remedial works were explored and a decision was made to instead put the homes on the market with full disclosure.

When asked if the council had an expected price range at auction, Mr Colle said details such as pricing were commercially sensitive.