An update on earthquake-prone buildings

14-Jul-2016

Building (Earthquake-prone Buildings) Amendment Act 2016

The Building (Earthquake-prone Buildings) Amendment Act 2016 (“Amendment Act”) received assent on 13 May 2016.  It is intended to come into effect on 13 May 2018 unless the Governor-General appoints an earlier date.  The Amendment Act is intended to update the Building Act 2004 (“Building Act”) primarily to balance the risk posed by earthquake-prone buildings with the significant cost and impact on the heritage value of upgrading those buildings.

The Amendment Act’s significant amendments to the Building Act include:
• adding a new definition of “earthquake–prone building”;
• establishing new geographical zones of “seismic risk throughout New Zealand”;
• providing for work to be prioritised on “priority buildings”;
• providing timeframes during which Councils must undertake seismic capacity assessments and building owners must strengthen or demolish earthquake-prone buildings (including a possible extensions for heritage buildings);
• changing the provisions relating to alterations to existing buildings under the Building Act;
• enabling Councils to issue building consents under the Building Act for required seismic strengthening work on buildings that are earthquake–prone without requiring the owner of the building to undertake other upgrades at the same time, such as upgrades for access and facilities for people with disabilities and for means of escape from fire;
• enabling Councils to apply to the District Court for orders authorising it to carry out or complete seismic work where an owner fails to do so after receipt of a seismic work notice; and
• creating offences for the failure to comply with seismic work notices and an ability to  impose fines of up to $200,000 on Building Owners.

Earlier iterations of the earthquake strengthening legislation were considered as being unnecessarily “one size fits all” and as such perhaps inappropriate.  To remedy this, the Amendment Act divides New Zealand into 3 distinct categories of earthquake risk.  See (http://beehive.govt.nz/sites/all/files/Map-of-new-risk-zones-for-strengthening.pdf).  This will give you a reasonable idea of the seismic risk category attached to the region where your property may be situated. 

Buildings will be classed as being earthquake-prone if, in a moderate earthquake:
• the ultimate capacity is likely to be exceeded; and
• a resulting collapse is likely to cause injury to a person or damage to property.
It is considered that this will effectively cover all older non-reinforced masonry buildings.
If a building is deemed earthquake–prone, the Council will serve the owner with an earthquake–prone building notice (“EPB”).

Examples of “priority buildings” include:
• hospitals and similar buildings used by emergency services;
• schools and other buildings which are regularly inhabited by 20 or more people;
• buildings whose collapse could lead to masonry falling onto public roads or foot paths.
The effects of a building’s seismic zone and potential categorisation as a priority or a non-priority building are;
• High seismic risk-must be assessed by Council within 2 years 6 months for priority buildings, and 5 years for other buildings.  If an EPB is issued by Council, remedial work must be completed within 7 years and 6 months for a priority building, and within 15 years for any other building.
• Medium seismic risk-must be assessed by Council within 5 years for priority buildings, and 10 years for other buildings.  If an EPB is issued, remedial work must be completed within 12 years and 6 months for a priority building, and within 25 years for any other building.
• Low seismic risk-must be assessed by Council within 15 years and remedial work must be completed within 35 years after an EPB is issued.

The Amendment Act makes some provision for owners of earthquake–prone buildings to apply for exemptions to carry out the required seismic work.  It also allows for owners of certain heritage buildings to apply for an extension of time for completion of seismic work.

Under the Amendment Act’s transitional provisions, where a building owner has already been issued with a notice by a Council requiring it to carry out seismic strengthening work:
• if the building is exempt from the provisions of the Amendment Act under section 133AA, the existing notice is revoked on the commencement date of the Amendment Act, and the Council must notify the building owner of that fact; and
• in all other cases:
o the Council is deemed to have determined the building to be earthquake–prone;
o the Council must (as soon as practicable after the Amendment Act comes into force) issue an EPB to the building owner, which will require the building owner to carry out seismic strengthening work to ensure that the building is no longer earthquake–prone; and
o the deadline for completing the seismic strengthening work will be the earlier of the deadline in the older notice issued by the Council and the deadline calculated in the usual way under the Amendment Act.

A number of the key definitions for the new regime are not included in the Amendment Act.  It is intended that they will be in the yet to be drafted regulations.  It is expected that the Ministry of Business, Innovation and Employment will begin consultations on the regulations within the next few months.  This should provide the opportunity for both Councils and building owners to have input on this significant change in direction for earthquake-prone buildings.

The Amendment Act is intended to provide a comprehensive framework for the identification and rectification of earthquake–prone buildings.  While the Amendment Act will enforce mandatory seismic strengthening work on some building owners, the timeframes have been adjusted so that they better reflect the risk of an earthquake affecting each building.  This change will come as a welcome relief to owners of buildings in areas of low seismic activity, as the timeframes for seismic strengthening work have now been set with a greater degree of realism, and with what might be best described as, a more appropriate cost benefit ratio.

This article is intended to provide a brief summary of the legal framework established by the Amendment Act.  It should not be relied upon as a basis for making business decisions.  Please contact our team of property experts to discuss how the Amendment Act may affect you and your business.