Potential new Earthquake “Code Compliance”
The Ministry of Business, Innovation and Employment has recently completed consulting on proposed changes to the system for dealing with earthquake-prone buildings. These have been
reviewed as a consequence of the Christchurch disaster. The proposals set out a consistent national approach to dealing with these building.
Essentially the proposals would require all non-residential and multi-unit, multi-storey
residential buildings to have a seismic capacity assessment done within five years. Owners of buildings identified as earthquake-prone would then have up to 10 years to strengthen or demolish these buildings.
Our assessment is that this issue will be bigger that the leaky homes saga, as properties
that have been converted to residential apartments, and many buildings that predate the Napier Earthquake of 1931, will struggle to meet any such requirements. Various assessments have been made of the costs of any required upgrades.
An estimate of NZ$2.1 billion has been described as
“only scratching the surface” (Interest.co.nz 10 Feb 2012).
This has serious implications for landlords of commercial buildings (primarily liable), their
tenants (who may have some liability, dependant on the terms of the lease), Unit Title owners (whether directly liable or via Body Corporate levies) and their tenants (who are more likely to be on limited term leases and thus liable simply to walk away – but will face increased rental rates across the board).
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