Queenstown Lakes Mayor Clive Geddes describes the loss of more than half a million dollars when finance company Bridgecorp went into receivership as "regrettable".
The $559,000 bond was lodged with Bridgecorp by the developers of Queenstown's Heritage Villas, Mondrian Property Holdings, in 2002 as a guarantee landscaping would be done at the villas.
Mr Geddes said the work was not completed and the cash bond was lost when Bridgecorp went into receivership in 2007.
"It is regrettable and it will lead to changes to council's bond policy.
But it was accepted some years ago when the financial environment was totally different to what it is today."
A "small amount", about $40,000, was recovered.
The villa owners are seeking a variation of its resource consent so the landscaping will not have to be done.
