Uninsured red-zoners in Christchurch plan legal action against the Government over a Crown offer that would compensate them for only half the value of their properties.
The Government said this week that owners of vacant, commercial or uninsured land in the flat-land residential red zone, who were ineligible for its initial payout deal, would be offered half their land's rateable value (RV).
Commercial property owners are also entitled to a payment based on the most recent RV for improvements, such as buildings, on their land.
The initial Crown offer was linked to red-zoners' house insurance policy and required the Earthquake Commission [EQC] levy. Uninsured property owners did not qualify for this, and owners of vacant and commercial land were not able to insure their land.
GCA Lawyers partner Grant Cameron said there was no reason why they should not get the same, full RV payout offer as other residential red-zoners.
"I think the fallacy in the overall rationale is the notion that somehow [the EQC has] got anything at all to do with the offers of the land.
"The offer to buy the land is being made by the Crown and the monies used to purchase the land have got nothing to do with EQC. It's a completely independent fund."
Cameron is representing about 55 mostly uninsured property owners and plans to file papers with the courts seeking a judicial review on the offer. The Government had "misconceived its position", he said, and would be given the opportunity to rethink it before legal action started.
Canterbury Earthquake Recovery Minister Gerry Brownlee said it was "unlikely" the Government would change its mind.
"We had to look at a way of making sure people got enough to see it as being fair but not so much that it disadvantaged people who had paid insurance for many years," he said.
The situation for red-zoners who could not have insured themselves any more, such as vacant-land owners, was "unfortunate".
"The moment the earthquake series struck pretty much all value was taken out of that land," he said.
"We're trying to get them to a position where they get something. We think 50 per cent is a reasonable contribution."
Labour earthquake recovery spokeswoman Lianne Dalziel said the Government's rationale for red-zone compensation offers was flawed.
"[They] made their voluntary offer linked to the EQC cover that you get from insurance. There is no legitimate basis for that other than it is a convenient measure," she said.
"This is another set of losers."