A new system to address earthquake-prone buildings

The timeframes for strengthening earthquake-prone buildings and the standards which must be achieved, all of which came into force on 1 July 2017 by way of amendments to the Building Act 2004 (Building Act), are much as expected.

But some significant changes have been made – in particular the extension of the Act to parts of buildings and the engineering assessment methodology.

We outline the main features of the new regime.

This Brief Counsel is a companion piece to our commentary on the interface between the amended Building Act and the Health and Safety at Work Act.

Key features of the new system

  • Previously a building was earthquake-prone if it would have its ultimate capacity exceeded in a moderate earthquake or it would be likely to collapse causing death or injury or damage to any other property. Under the new system, parts of buildings also need to be considered, and may govern the overall NBS rating for a building. This raises a number of important issues, particularly around health & safety. Chapman Tripp’s commentary on the new approach to parts of buildings, and the health and safety implications of the new system is available here.
  • The country is divided into high, medium and low seismic risk areas. The seismic risk of an area affects the timeframes within which a territorial authority (TA) must identify buildings or parts of buildings that are potentially earthquake-prone, and the timeframes within which seismic work must be completed.
Seismic risk areaTimeframe within which TAs must identify potentially earthquake-prone buildings Timeframes within which owners of earthquake-prone buildings must carry out seismic work  
 PriorityOtherPriorityOther
High1 Jan 20201 July 20227.5 years of receipt of an EQB notice from the TA15 years of receipt of an EQB notice from the TA
Medium1 July 20221 July 202712.5 years of receipt of an EQB notice from the TA25 years of receipt of an EQB notice from the TA
LowN/A1 July 2032N/A35 years of receipt of an EQB notice from the TA


 

  • A category of ‘priority buildings’ has been established in high and medium seismic risk areas. Priority buildings are high risk because of their construction, type, use or location. The timeframes for remediating priority buildings are much shorter.
  • Despite the timeframes for remediation, any buildings that are earthquake-prone will need to be remediated when substantial alterations are undertaken.
  • Information about earthquake-prone buildings will be publicly available through a newly created EPB (earthquake-prone buildings) register.

Although a building will still only be earthquake-prone if it is less than 34% NBS, many building owners and tenants will want the buildings they own and occupy to have a higher NBS rating - either to preserve continued business operations or as part of a sense of corporate responsibility.

This has been evident in Wellington with government tenants often insisting upon an 80% NBS and corporate tenants being reluctant to lease buildings with an NBS of less than 67%.

New methodology and guidelines

Two of the key documents in the new system are the EPB methodology (which is set by the Ministry of Business, Innovation and Employment (MBIE) and the engineering assessment guidelines (produced by the New Zealand Society for Earthquake Engineering, the Structural Engineering Society and NZ Geotechnical Society Inc in conjunction with MBIE and the Earthquake Commission).

The EPB methodology guides territorial authorities (TAs) through the process of identifying earthquake-prone buildings, tells engineers how to undertake engineering assessments and sets out how TAs are to determine whether a building is earthquake-prone and, if so, how to allocate an earthquake-rating.

The guidelines are incorporated by reference through the EPB methodology. They provide engineers with the framework and technical methods required to be used in carrying out assessments and giving each building an NBS rating.

The aim is to provide consistency across the system.

The new methodology and guidelines significantly change the way in which buildings are assessed. We recommend building owners and occupiers check whether existing engineering assessments need to be updated or whether new assessments need to be obtained as a result of the new system.

Key areas of concern

  • Leasing issues: landlords and tenants should be checking their lease arrangements to establish the extent to which they will be liable to contribute towards the costs of any seismic upgrading works. Landlords will also need to check the access provisions in their leases to see if there are restrictions or if tenants can cancel leases or claim compensation due to disruption. This issue will need to be carefully considered in the context of any new leasing arrangements being entered into.
  • Capacity: this is likely to be an issue in the current market, both in terms of engineering assessments and remediation works.
  • Quality and consistency: ensuring seismic assessments are carried out consistently and to a high quality remains a key area of concern. This will require continuing professional development for engineers and oversight by the relevant regulatory and professional bodies.
  • Cost implications: these are yet to be seen but the cost escalation in the current market will be of concern to many.

Next steps

If you would like further information on how the new system for identifying and managing earthquake-prone buildings is likely to affect your business, please contact us.

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