One apartment block, two flood risk ratings and owners left in ‘limbo’

Saturday, 11 July 2026

Auckland Council assigned different flood risk categories to units within one Epsom building, creating insurance and property value problems for remaining owners.

Four ground-floor units received Category 3 high-risk ratings while five upstairs units in the same Epsom building got Category 1 ratings.

Auckland Council bought four Category 3 units in an Epsom complex, but the remaining eight units cannot get full building insurance coverage.

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When Michelle Nathan looks at the unit block in Auckland’s Epsom where her mother owns a flat, she sees one building.

The complex has 12 separate units, but shares common facilities, including a downstairs laundry, and electrical components that serve the upstairs units from the lower level.

“The whole unit is totally interconnected,” Nathan told Stuff.

But Auckland Council’s storm recovery process assessed the units individually, leaving parts of the same building with different risk categories.

Council confirmed the six ground-floor units were assigned Category 3, while five upstairs units were assigned Category 1. One upstairs unit was not categorised because it was not registered for assessment.

Nathan said her mother’s ground-floor flat was one of the Category 3 units and it had been repaired after the floods and rented out. She said her family later chose not to take part in the voluntary buyout process.

“We declined because we don't agree with how they have put the split categorisation. It makes absolutely no sense… this is a joint complex that should be treated as one property, even though it's 12 different units,” Nathan said.

Category 3 properties are considered to have an intolerable risk to life where there is no feasible intervention to reduce that risk, and are eligible for a voluntary buyout. Category 1 properties do not meet that threshold and are not eligible for a buyout or council financial support.

Council has since bought four Category 3 units in the complex.

In a letter to Nathan seen by Stuff, council said that under the Unit Titles Act 2010, all units in one structure must be insured under the same policy, and its four properties at the complex needed to be included for the body corporate’s policy to be compliant.

But separate correspondence from an insurance broker sent to the body corporate, said three insurance companies had declined to quote, and the council-owned Category 3 units would be excluded from cover. The updated renewal terms were based on the remaining eight units.

Nathan said that meant the complex could not be fully insured as one building, leaving the remaining owners in limbo, uncertain about the future of their properties.

“The fact that we can now not get insurance as a whole building, that is enough to alarm anyone,” Nathan said.

She said the remaining owners were left trying to make decisions about their properties with no clear path forward, as they struggled to get the building fully insured.

“Obviously the land values have gone down because who wants to buy something now which is on a flood risk area which is what Category 3 has deemed.”

One unit had been on the market since about November, she said, and she believed any buyer would struggle to secure lending or insurance while the complex’s future remained unresolved.

The four council-owned units were also empty, she said, creating another concern for those still living in or renting out units in the building.

“Units which aren't occupied normally start getting vandalised and they start becoming unattractive to the rest of the area,” Nathan said.

“So it's sort of like there's a double-edged sword. You can't get the insurance, but you're also creating an area that could actually be more [in need of] insurance because there's a whole lot of it that's not occupied.”

She said council should either consider reassessing the complex so remedial work and full insurance could be explored, or buy out the remaining owners and deal with the site as one.

Instead, Nathan said she had been told the buyout option would not be revisited for the remaining owners.

“Therefore, we just are sitting in limbo.”

Another ground-floor unit owner, Steve Aldridge, is also caught in the uncertainty.

He bought his flat after the Auckland Anniversary floods, renovated it, and had rented it out since June 2024. But, he said the unresolved future of the complex had left him with a property he believed was “unsaleable.”

In a statement, Mace Ward, Auckland Council acting general manager property, acknowledged the situation was “complex and distressing”, particularly where owners felt “disadvantaged or uncertain” about the future of their property.

Ward said the storm-affected land categorisation framework was a one-off initiative, designed to help affected residents move away from high-hazard sites. Due to the voluntary nature of the programme, council dealt with individual owners and carried out site-by-site risk assessments to assign a category, he said.

“Multiple dwellings on a site didn’t guarantee the same categorisation was assigned,” Ward said.

He said some properties had different risk levels, while some owners did not volunteer to have their properties assessed or later chose to opt out of the buyout process.

At the Epsom complex, Ward said: “The units on the bottom floor were assessed as having an intolerable risk to life in future flooding events, while the upstairs units were not.”

Ward said the buyout programme had officially closed in October 2024 and was not being revisited.

He said Category 3 owners who considered opting out were encouraged to seek independent advice on safety, insurability, mortgage implications, future building restrictions and the ability to sell their property later. Ward said council also confirmed with homeowners at the opt-out point that they would not be able to re-enter the scheme at a later date.

“The council’s primary function is as a regulatory and governance body, not an insurer or insurer of last resort,” Ward said.

He said Auckland Council now had the same body corporate obligations as the other owners at the complex and was working with the body corporate on insurance options.

“We have assigned a site resolution manager to this site to work with the body corporate on next steps and determine a permanent solution for the site.”

He said council was aware of other body corporates with a mix of private and Auckland Council-owned Category 3 properties that had been able to obtain insurance.

Council’s priority after buying Category 3 properties was to remove the assessed risk to life, he said. In most cases, that meant removing the council-owned property, but Ward said some sites, including this one, were more complex and needed further work before next steps were decided.

Ward said council-owned Category 3 properties were maintained to a reasonable standard until permanent decisions were made, and sites with dwellings still on them were monitored by regular security patrols.

The 2023 weather events had affected the saleability and property values of potentially thousands of Auckland properties, Ward said. While the buyout programme had helped more than 1200 families leave high-risk homes, he said council recognised removing Category 3 properties had also affected co-owners, and those issues would take time to work through.

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