Property / Real Estate
The Building (Earthquake-Prone Buildings) Amendment Act 2016 came into force on 1 July 2017. This Act makes changes to the Building Act 2004 and represents a new way for Territorial Authorities to deal with the identification and management of earthquake-prone buildings (EPBs). It aims to create consistency in how and when all Territorial Authorities deal with and provide the public with information about such buildings.
Every Territorial Authority will be categorised as low, medium or high seismic risk. This categorisation dictates the responsibilities which each Territorial Authority has in relation to the identification of EPBs and the time frames which apply. An indicative map of the seismic risk areas can be found here.
What buildings do the new provisions apply to?
The majority of all buildings are covered. The two major exceptions are:
- buildings which are used mainly for residential purposes unless the building has two or more stories and is a hostel, boarding house or other specialised accommodation or contains more than three household units.
- farm buildings being a shed or other building that is located on a farm and used primarily for farming activities or an ancillary purpose.
When is a building considered to be an EPB?
A building is considered to be an EPB if:
- all or part of it will have its ultimate capacity exceeded in a moderate earthquake; and
the building or part of it were to collapse, such collapse would be likely to injure or kill persons in or near the building or on any other property or cause damage to any other property.
What role does a Territorial Authority have in determining EPBs?
Territorial Authorities must now undertake a process to identify the buildings (or parts of buildings) in their districts which are EPBs or could potentially be considered to be an EPB. They must use the EPB Methodology set by the chief executive of the Ministry of Business, Innovation and Employment (MBIE) to determine whether or not a building is earthquake-prone. The time frame during which a Territorial Authority has to make this determination will depend on whether their district is categorised as having a low, medium or high seismic risk. It will also depend on whether the building is a Priority Building or not. Priority Buildings include hospitals, emergency and education buildings and other buildings which have been determined to be Priority Buildings as a result of a consultative process undertaken by the Territorial Authority.
If a Territorial Authority considers that a building is potentially earthquake prone it can require the building owner to provide an engineering assessment within a 12 month time frame. The building owner then has three options:
- Provide the Territorial Authority with the assessment within 12 months. Building owners can request an extension (of up to 12 months) if they are not reasonably able to complete the assessment that time frame.
Contest the request by providing evidence of a factual error on which the Territorial Authority has determined the building to be a potential EPB.
- Notify the Territorial Authority that it does not intend to provide the assessment. If this happens the Territorial Authority can proceed as if the building is an EPB or it can obtain the assessment and recover the costs from the owner.
Once the Territorial Authority has the engineering assessment it must then determine whether the building is earthquake-prone and if it does it must issue the owner with an EPB Notice (see below).
The Territorial Authority must report to the chief executive of MBIE on its progress of determining EPB within the time frames shown in this Table.
What happens if a Territorial Authority determines that a building is an EPB?
Once a Territorial Authority is satisfied that a building is an EPB it must issue an EPB Notice and record information about the building on the EPB Register which is available online. The EPB Register contains information such as:
- the addresses of buildings or part of buildings which have been determined to be earthquake-prone
- whether or not a building is a priority building
- the earthquake rating of the building
- the deadline for the building owner to complete the necessary seismic work
The EPB Notice will require the building owner to carry out building work to ensure that the building is no longer earthquake-prone ("Seismic Work").
The Territorial Authority must provide a copy of the notice to each building owner, mortgagee and anyone who has a caveat over the property.
A Territorial Authority can also impose certain safety requirements if it determines that a building is earthquake-prone including putting up hoarding or fencing to prevent people from approaching the building and putting up a notice restricting entry. A failure to comply with the safety requirements is an offence carrying with it a fine of up to $200,000 and $20,000 per day for continuing offences.
What are the obligations of a Building Owner if they receive an EPB Notice?
The building owner must complete the Seismic Work within the time frame specified in the notice. Refer to this Table for the relevant time frames.
An owner can apply for an exemption if it meets the requirements of the regulations (yet to be drafted).
The building owner will be required by the Territorial Authority to attach the EPB Notice or the EPB Exemption Notice to the building in prominent place on or adjacent to the building. A failure to do so is an offence carrying with it a fine of up to $20,000.
How long does the owner of an EPB owner have to complete Seismic Work?
The building owner will have a specific time frame for completion of the Seismic Work and this time frame will depend on the seismic risk profile of the district in which the building is located and whether or not the building is deemed to be a Priority Building. The relevant time frames are set out in this Table. The owners of certain Heritage Buildings can apply for an extension (by up to 10 years) to the time frames if they meet certain criteria.
If the Building Owner does not complete the Seismic Work within the required time frames the Territorial Authority can apply to the District Court to carry out the work and recover costs from the Building Owner.
It is an offence for a building owner to fail to complete the Seismic Work within the current time frames and fines of up to $200,000 apply.
What should you be doing now?
All buildings owners, especially those in medium and high risk seismic areas with older buildings, should consider carefully the impact of these new requirements. Those looking at purchasing, taking or renewing a lease of older properties should obtain expert reports on whether or not the building is likely to be considered an EPB or not. While the time frames are extended, those owners of buildings which are potentially earthquake-prone ought to start making plans for how they are going to deal with any Seismic Work requirements.
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