In our April 2013 legal update, we summarised the proposals set out by the Ministry of Business, Employment and Innovation (MBIE) on building seismic performance in New Zealand. The Minister for Building and Construction, Hon Maurice Williamson, yesterday announced the Government's policy for dealing with earthquake-prone buildings.

The policy was prepared having taken into account the views of 535 submissions and feedback from public meetings.  The key features of the policy are:

  • Territorial authorities are to complete a seismic assessment of all non-residential and multi-unit,multi-storey buildings within five years of the legislation taking effect
  • The results of these assessments will be entered onto a publicly accessible register, maintained by MBIE
  • Building owners will then have another 15 years to strengthen or demolish the building
  • Certain buildings will be prioritised, such as buildings with a significant risk to public safety or buildings with strategic importance in an emergency
  • Other buildings may be exempted, such as rural churches and farm buildings.  Category One heritage buildings, together with those on the proposed National Historic Landmarks List, are eligible for a further extension (of up to 10 years) to complete strengthening work.

The current 'earthquake-prone' standard under the Building Act 2004 of 34% of the New Building Standard (NBS) will not change.  It is hoped however that building owners will want to target at least 67% NBS.

The policy is broadly in line with the MBIE consultation document, released late last year.  One notable difference is the extension of time provided for building owners to strengthen or demolish an earthquake-prone building - from the recommended 10 years to 15 years following the assessment (20 years in total).  This is a result of the majority of public submissions indicating the 10 year timeframe was too short and would impose too much of a burden on building owners.

One issue raised during the consultation process is the possibility of financial incentives for building owners.  The Government has agreed to look at this issue in the next few months.  We note however, that strengthened buildings will potentially enjoy higher property values, higher rents and lower insurance premiums.

MBIE is also in the process of preparing guidance on how requirements under the Building Act 2004 may overlap with requirements under the Health and Safety in Employment Act 1991.  This will be available in October.

Mr Williamson indicated that the legislation effecting these changes will be introduced later this year.