Photo: RNZ / Nathan Mckinnon
The Law Society is warning some property buyers are losing their deposits after unknowingly entering agreements on flood-damaged houses.
Lawyers are seeing an uptick of people entering into legally binding Sales and Purchase contracts, only to find their bank will no longer give them the mortgage, because the house is uninsurable. In some cases where an owner did receive insurance money, Law Society's deputy chair of the property law section Kristine King says there's no follow-up on whether they actually used the money to fix their house.
Kristine, of Duncan King law in Auckland, says in many cases the buyer cannot get their deposit back - sometimes more than 100-thousand dollars. She fears this is the beginning of a crisis across Auckland, Northland, Hawkes Bay and Gisborne.
The chief executive of mortgage broker Squirrel David Cunningham believes it's indicative of a wider problem looming, of how difficult it may become to get insurance in flood-prone areas.
