Auditor-General Lyn Provost has confirmed her office will investigate whether the Crown is recovering the maximum possible from insurers for properties purchased by the Crown in the red zone in Christchurch.
Ms Provost received a letter from Labour's Canterbury earthquake recovery spokeswoman Lianne Dalziel asking for an investigation into the Crown's method of acquiring properties in red zone areas.
She also called for an investigation into the decision to offer uninsured property owners only 50 per cent of the 2007 rating valuation for their land, whereas insured property owners were offered 100 per cent of the 2007 rating valuation.
The Auditor-General's office will not investigate either of them.
In a letter to Ms Dalziel, Ms Provost said she would investigate one of her three requests.
"We do intend to look further into the arrangements between the Crown and insurance companies for the recovery of insurance proceeds from properties acquired by the Crown in the red zone."
She said the Auditor-General's office had spoken with the Office of the Ombudsman and the Human Rights Commission before making a decision.
Ms Provost said determined that the first two requests were matters for the courts.
"Since you wrote to us, CERA had included a notice on its website advising property owners in the red zone that, if they accept the Crown's offer for their property, they would not be prevented from bringing judicial review proceedings against the Chief Executive of CERA or the Minister of Canterbury Earthquake Recovery."
Judicial review proceedings have been filed; one by a commercial property owner Fowler Development Limited in the red zone, and Grant Cameron on behalf of 40 red zone property owners.
The Office of the Ombudsman will monitor the judicial review proceedings.
Chief Ombudsman Dame Beverley Wakem has not ruled out the possibility of a further investigation if the court declines to review the application made to it.
