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Tauranga state house sale challenged

NZ NewswireNZ Newswire 8/11/2016

The government's plan to sell more than 1100 state houses in Tauranga is being challenged in court, with ministers accused of not knowing enough about the contracts.

Lobby group State Housing Action in the High Court at Wellington on Wednesday argued the proposed transfer of the 1124 properties to IHC subsidiary Accessible Properties was illegal because the minister hadn't considered a transfer contract as they were required to do.

Its other argument is the decision to sell was irrational and Housing Minister Bill English and Social Housing Minister Paula Bennett hadn't taken into account relevant matters.

The government wants to sell about 2000 of 64,000 Housing NZ properties to social housing providers, who must then make them available to social housing tenants.

The transfer of 280 properties in Invercargill has already fallen through and SHA believes the precedent-setting Tauranga deal represents the sale of $200 million of state assets, the group's lawyer Michael Sharp told the court.

Ministers didn't have to read all of the 400-page documents but must have knowledge of the terms of the contracts they were signing, he said.

Lawyers for the ministers are expected to argue they only have to have knowledge of key aspects of the contracts.

The court was told the public might be cleared during parts of the one-day hearing when commercially sensitive matters are discussed.

It is hoped Justice Simon France will make a ruling before a December 9 contract deadline.

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