In our December edition of Carbon Copy, we reported on Auckland Council's adoption of its Earthquake-Prone, Dangerous and Insanitary Buildings Policy 2011-2016.  We highlighted the potential difficulties associated with managing earthquake risk information and the prospect of a large number of pre-1976 buildings requiring significant and costly upgrades to comply with 34 percent of the current New Building Standard ("NBS") required for protection from earthquakes in the Building Code.

Auckland Council has now commenced "stage 2" of its three-staged approach for identifying, evaluating and recording earthquake-prone buildings. It has completed initial seismic performance assessments on many pre-1976 buildings in the Auckland Region and issued copies of the assessments and notice of the findings to building owners.   

The NZ Society of Engineering Initial Evaluation Procedure was used for the assessment which was based on external inspections (and internal inspections where possible) along with information from the Council's property files.  The assessment will tell building owners whether their building is:

  1. potentially an earthquake prone (34% NBS and under); and/or
  2. potentially an earthquake risk (67% NBS and under).

The reports will also give buildings a grading for seismic risk based on the Initial Evaluation Procedure.  The Council is currently only requiring work to be done on buildings identified as being potentially earthquake "prone" (not those identified as an earthquake "risk").  However building owners may find that buildings which are identified as an earthquake "risk" could be difficult to tenant and may be subject to high insurance premiums. 

Owners of buildings identified as earthquake prone are being given three months to respond to the Council, and to provide any addition information.  We would encourage building owners who have received initial seismic performance assessment reports to engage their own engineers to provide a more detailed engineering assessment.  Some building owners are finding that more detailed assessment can lead to a change in the rating for the building.  The next step would be to engage with Auckland Council and present a proposal for strengthening within realistic timeframes, if necessary.

This is unlikely to be the last we hear of the Earthquake Policy.  The magnitude of the cost associated with the building upgrades needing to occur over the next 20 or so years is still not fully known.  Earthquake risk proofing has the potential to be a "sleeping giant" for commercial property owners both in Auckland and in other parts of the country.