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New national policy on earthquake strengthening for buildings

By Kay Keam - 10 Apr 2014

The previously haphazard approach to earthquake-strengthening requirements in New Zealand has given way to a national policy. The new requirements will impose significant costs on owners of earthquake prone buildings.

New Zealand is a seismically volatile country and earthquakes affecting our buildings are inevitable. The challenge going forward is balancing the extent of seismic strengthening with the price that society is willing to pay for mitigating the risks. For example, recent commentators have estimated that the earthquake strengthening policy could cost $3 billion in Auckland alone but take 4000 years to save a single life, based on current projections on when a major earthquake will next hit Auckland. These same commentators believe that it is far more likely that other natural disasters will strike such as tsunamis, volcanoes, eruptions, tornadoes and landslides and that we should be preparing for these and other contingencies instead. 

So what are the practical implications of these new rules for building owners, tenants and other affected parties?

The building code requires buildings to be built or brought up to a certain percentage of the national building standard. Simply put, the building code defines an earthquake prone building as having a rating that is 34% or less of the current national building standard.

The Building Act 2004 does not set out the exact standard to which territorial authorities may require strengthening of earthquake prone buildings. While most local councils require strengthening to 34% of the national building standard, others require a higher standard. For example, Auckland has more than an estimated 4000 earthquake prone buildings that will have to be properly assessed by Auckland Council and strengthened to 34% of the national building standard in the next 15 to 20 years. There are also special dispensations for heritage building owners who will have an extended period of time in which to bring their building up to scratch.

The above will inevitably have an effect on building owners and their tenants. As a result of the Christchurch earthquakes we have already seen a change to the commercial leasing landscape. Most standard commercial leases now contain provisions that deal with issues such as lack of access during periods of damage and addressing the tenant's right to cancel the lease if the lack of access continues for an ongoing period. Future issues will inevitably arise between landlords and tenants regarding relocation during earthquake strengthening works, access during the period of those works and the associated costs. Many tenants (particularly anchor tenants) are requesting that landlords commission seismic reports before committing to a lease (and will often refuse to sign or renew a lease if the building is less than a certain percentage of the national building standard). Employers have certain obligations under the Health and Safety Act to provide a safe environment for their employees and many employers are conscious of this when making a decision on which building to lease.

If you are the owner of, or a tenant in, an earthquake prone building and you have questions about the above process please contact a member of our property team.

Contact

Kay Keam

 

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