Changes for commercial property owners of older buildings

July 8, 2015

in Property

Property: HousingWe wrote last year about the impact on Commercial Property Owners of the proposals for Earthquake Prone Buildings under the Building (Earthquake-Prone Buildings) Amendment Bill.  Recently the Government has now sensibly announced changes to the proposed legislation.  There will now be a more targeted approach for Earthquake Prone Buildings instead of a one size fits all approach.

There are four significant changes proposed:

  1. Varying the time frame for strengthening relative to earthquake risk.  Instead of a one size fits all approach around the country there will now be three different seismic zones recognised as low, medium and high.  This is good news for Commercial Property Owners of older buildings in regions such as Auckland and Dunedin as these regions have been recognised as low seismic risk.  Instead of a 5 year assessment time frame and a 15 year strengthening time frame there will now be 15 year assessment and 35 year strengthening time frames.  This represents a significant breathing space for owners of older commercial properties in these regions.
  2. Prioritising education and emergency buildings for strengthening in high risk seismic areas.
  3. Reducing the scope and, as a consequence, the number of buildings requiring assessment to those that pose the greater risk.  For example existing farm buildings, retaining walls and fences will be exempt from requiring assessment.  The Government estimates that the number of buildings requiring assessment will be reduced significantly from 500,000 buildings down to 30,000.
  4. Introducing new measures to encourage earlier upgrades.  For example, there will be a new requirement to strengthen earthquake prone buildings when undertaking substantial alterations.

The Government estimates that this more targeted approach will reduce the estimated overall cost of buildings requiring strengthening from $1,360 million down to $777 million while retaining the intended safety gains.  Sensibly the Government has recognised that buildings in low risk seismic areas should not be treated as the same as buildings in higher risk seismic areas throughout the country.

We will keep you advised of further developments as this legislation progresses.  At this stage this new legislation looks like it will be passed into law later this year.

Note that there are additional obligations for Commercial Property Owners under the Health & Safety in Employment Act 1992. Generally, an obligation to take practical steps to identify and manage any parts of buildings which could cause serious harm to occupants in case of an earthquake and . We will also keep you advised of any further developments in this area.

We are very experienced in all aspects of Commercial Property advising both vendors and purchasers of commercial property and landlords and tenants.

If you require any advice or further information on the matters dealt with in this publication please contact the lawyer at Farry and Co. who normally advises you, or alternatively contact:

Simon Milne
09 379 0055 or 03 477 8870


The information contained in this publication is intended as a guide only.  It does not constitute legal advice and should not be relied upon as such.  Professional advice should be sought before applying any of the information to particular circumstances.  While every reasonable care has been taken in the preparation of this publication, Farry and Co. does not accept liability for any errors it may contain. 

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