- Kāinga Ora’s Hamilton state house sales include a right of refusal for Waikato Raupatu Lands Trust.
- This allows iwi to purchase properties before a sale goes unconditional, affecting private buyers.
- The process poses risks for buyers, who may lose out after spending on due diligence.
Buyers looking to pick up one of the state houses Kāinga Ora is selling in Hamilton run the risk of last-minute competition from local iwi.
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Special terms and conditions have been added to the sale and purchase agreements of the Kāinga Ora listings in the city.
These require the Crown, under the Waikato Raupatu Claims Settlement Act 1995, to give the landholding trustee, currently Waikato Raupatu Lands Trust, a right of refusal on any Crown land being sold.
This means the state housing agency can, at any point before a sale goes unconditional, cancel a deal with a private buyer.
There are currently eight run-down state homes for sale in Hamilton that are being pitched at renovators and flippers. Some of the deadlines for those properties have passed and most of the listings have been removed from online.
Among those still on the market are 11 Old Farm Road, in Hamilton East, which is for sale by deadline private treaty, and 37 Montgomery Crescent, in Bader, which has an asking price of $519,000. Lugtons agent Fraser Kilgour, who is marketing the properties with colleague Abbie Hyde, was unable to comment when approached by OneRoof.
A two-storey ex-state home for sale at 11 Old Farm Road, in Hamilton East, Hamilton. Photo / Supplied
Kāinga Ora Waikato regional director Mark Rawson confirmed the process.
Crown agencies including Kāinga Ora are required to offer their properties to relevant iwi before they hit the open market. Even if iwi refuse, in the Waikato they still get a second chance if another buyer’s offer is at a lower price or has better terms than those originally offered under the right of refusal (RFR) process.
If iwi decide to buy at that point, Kāinga Ora is required to pull out of the first sale and return the buyer’s deposit. Under the legislation, iwi have one month to decide whether to take up the deal.
However, OneRoof understands that the Hamilton houses have, in most cases, attracted plenty of interest, which means it is unlikely that the sale price would be less than what it was first offered to iwi for.
The process appears to be different in Auckland, where agents involved in selling state houses told OneRoof they were not aware of any similar special conditions being added to sale and purchase agreements. Iwi are offered the state homes before they hit the open market in Auckland, but not always after.
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Rawson said each treaty settlement was different, and the specific terms tied to the Waikato Raupatu Claims Settlement Act only applied to Kāinga Ora properties in the Waikato with an RFR.
A Hamilton real estate agent, who declined to be named for this article, said the sale and purchase agreements meant buyers could spend thousands dollars on due diligence only to lose out to iwi at the final hurdle.
The terms made the properties risky prospects for first-home buyers, who would not be able to wear such costs, the agent said.
The agent also criticised the Government’s messaging on the state home sell-off.
“There seems to be a disconnect between what the Government is saying and what they are doing locally. They are not helping New Zealanders get into their homes, they are helping professional flippers make money. Their marketing is directly targeting that flipper audience.”
A Waikato lawyer told OneRoof that if iwi decided to buy the state homes, they were free to resell them just like any other buyer.
OneRoof reached out to Waikato-Tainui for comment, but had not heard back at the time of publication.
- Click here to find more properties for sale in Hamilton
