Category 3 buy-outs: a step-by-step guide to how it will work

Last Updated : 15 Nov 2023
Aerial View Of Auckland City Featuring Ocean And Harbour Bridge 1

During October, our Governing Body (the mayor and councillors) agreed to enter into a $2 billion cost-share arrangement with the government to fund storm recovery and resilience works, including buying out Category 3 homes. They made several policy decisions about categorisation, including how the buy-out scheme will work for Auckland.  

Here’s an overview of the process and answers to some of the common questions we’ve been receiving from property owners. 


A step by step guide to the buy-out process 

There are seven key steps in the buy-out process. 

Step 1. Risk category confirmed 

A detailed risk assessment determines what risk category your property is. If your property has a residential dwelling on it and is confirmed as Category 3, you are eligible for a buy-out offer. Vacant sections are not included in the buy-out scheme.  

You’ll have three months to dispute your property category, or to opt-in to the buy-out process. 

Step 2. Meeting scheduled 

A property advisor and a storm recovery navigator will support you throughout the process. They'll contact you after categorisation and book an in-person or online meeting with you. The meeting should include all owners of the property, and you’re welcome to invite a support person along too.  

Step 3. Initial homeowner meeting 

At the meeting you’ll have the buy-out process explained in detail, and your questions will be answered.  

You’ll be asked to formally opt-in to the buy-out process. We’ll ask for insurance information, and whether you have any individual circumstances you would like us to consider if you are not insured. If there are any other special circumstances that need to be considered by council, you can share them at this meeting.  

Step 4. Property valuation 

Your property advisor will arrange for one market valuation (as at 26 January 2023) from a registered valuer.  

Auckland Council already has a panel of registered valuers and we’ll be using these firms because they’re already set up and they can quickly start working on valuations. Because of the number of valuations needed, we’ll be using several firms across the region. Where possible the valuers will work in a place-based way to increase the consistency of valuations within a geographic area.  

You can choose to pay for your own registered valuer if you wish. They will need to use the same methodology as the council instructed valuers.  

Having a valuation doesn’t commit you to accepting a buy-out offer. You can opt-out of the process any time up to signing a Sale and Purchase Agreement.  

Step 5. Offer decision 

You’ll be presented with the offer, a copy of Auckland Council's valuation, and a conditional Sale and Purchase Agreement which sets out the buy-out price (based on the valuation, your insurance and EQC information, and homeowner contribution). 

You’ll have one month to consider the offer from Auckland Council. If you accept the offer, you'll sign and return the Sale and Purchase Agreement.  

If you do not accept the offer, you can either dispute the valuation via the disputes process, or you can opt-out of the buy-out process. 

Step 6. Settlement 

The Sale and Purchase Agreement will specify the settlement date for the buy-out, which is when the funds will be transferred to you, and the property ownership is transferred to Auckland Council. You'll need to have moved out and removed everything from the property by the settlement date.  

The settlement date will be negotiable. Some property owners will want a quick settlement, while others may prefer a longer settlement. We know everyone has different situations so your property advisor will work with you to find the date that works best.  

Step 7. Post settlement 

Auckland Council will own your property after settlement. We will be making decisions about what to do next with your property, which may include deconstruction or demolition. 


Frequently Asked Questions 

How will I know what to do during the buy-out process? 

We know that selling a home is stressful under normal circumstances, and that the buy-out process may be challenging for you. We’ll assign a property advisor and a storm recovery navigator to support you throughout the process. They’ll be your point of contact and can answer any questions you have along the way.  

They won’t provide advice on whether to accept the buy-out offer though. As with any property transaction, you should seek your own independent legal advice before you sign a Sale and Purchase Agreement.  

What is the buy-out offer? 

Apre-weather event marketvaluationas at 26 January will be used to determine the starting point for the voluntary buyout offer. Auckland Council will offer 95% of the value of aninsured property, less any insurance payout (including EQC). This means that the property owner is making a 5% contribution towards the cost of the buyout. 

For propertiesthat are not insured, we will offer at least 80% of the value of the property (up to 95% - the same basis as an insured property). This means that the property owner is making up to a 20% contribution towards the cost of the payout.  

You can make an application for council to consider your individual circumstances related to your insurance status. In some situations, council may offer you up to 95% (the same amount as for an insured property) if the council considers that it is fair to do so based on individual circumstances relating to your insurance status.  

This could be where there was little or no insurance loss, you couldn’t get insurance at the time of the events due to previous weather events, or you can show a history of paying insurance for the property previously.  Your property advisor or navigator will explain the application process to you. It’s done via an online form (or paper form), and it will take up to 25 working days to receive a decision about your application.   

To summarise, the buy-out offer will be the market valuation at 26 January 2023, LESS the insurance/EQC settlement LESS the homeowner contribution.  

How long will the buy-out process take? 

The timeline will be different for everyone as it depends on your situation. For most homeowners it’s likely to take between three and six months from the initial homeowner meeting to receiving a Sale and Purchase Agreement. This timeline might be longer if there’s a valuation dispute or it takes longer than expected to supply all the required information.  

You’ll have a month to accept or decline the offer.  

What happens if I’m not happy with the market valuation?  

If you’re unhappy with the valuation in your offer you can dispute this, and your property advisor will explain how to do this when you get your offer. There’s a simple online form (paper version available) to fill in to raise a dispute.  

The first step of the dispute process will be a review of the valuation that’s been provided by the registered valuer. This review will be done internally, and the outcome of the review will be notified to you.  

If you’re unhappy with the outcome of the internal review, you can seek a further review through an external panel of property and valuation experts.  

A guidance document with information about the disputes process is included in the Category 3 Homeowner Handbook which is provided to property owners at the time of confirming their Category 3 status.  

Will the council contribute any costs for legal fees or other costs? 

A one-off contribution of $5,000 will be given to Category 3 homeowners towards professional fees, such as legal advice or an alternative valuer/valuation. At the initial homeowner meeting, your property advisor will explain how to claim this contribution.  

Will you consider my special circumstances in the process?  

We know that everyone has very different situations and that in exceptional cases, we may need to depart from our buy-out policy positions where departure in an individual case is consistent with our policy objectives.  

You’ll be able to raise any circumstances relevant to your situation and to submit a special circumstances application if required. Your property advisor or navigator will explain this process. This will be done via an online form (or paper form), and it will take up to 25 working days to receive a decision about your application.   

If you’re dissatisfied with the outcome of your application, you can request to have this decision reviewed. This review will be undertaken by the Chief Executive of Auckland Council. The decision made by the Chief Executive is final and not subject to further dispute resolution processes.  

Special circumstances decisions will be made in line with council’s Guidance on the application of Special Circumstances, which is included in the Category 3 Homeowner Handbook. A copy of this handbook is provided to property owners at the time of confirming their Category 3 status. 

Still got questions? There are further answers to frequently asked questions in our FAQ section.  

Back to News