The bill is part of the New Zealand Government’s broader work programme to review the country’s system for managing seismic risk in existing buildings, and aims to provide certainty to building owners and territorial authorities while the review takes place. This is occurring at a time when many building owners are coming up against current deadlines for remediation.
Background
The risk of earthquakes is a key factor for many owners, purchasers and occupiers of buildings in New Zealand.
The country’s current system for managing seismic risk in existing buildings (introduced following the Royal Commission of Inquiry into the 2011 Canterbury earthquakes) requires territorial authorities to identify buildings which may be “earthquake-prone”. Once a building is identified as earthquake prone, the territorial authority will notify the owner and request an engineering assessment to confirm whether the building is in fact earthquake-prone.
A building is determined to be earthquake-prone if the seismic strength rating assigned to it in the engineering assessment is less than 34% of the standard required for new buildings under the Building Act 2004 – known as the “New Building Standard” or “NBS”.
The owners of buildings assessed as earthquake-prone must, within a specified period, either remediate the building to a standard such that it is no longer earthquake-prone, or demolish the building.
The timeframes for this are determined by reference to a number of risk factors, including the location of the building, the construction methods for the building and the current use of the building. In general, the current timeframes are as follows:
|
Seismic Risk Area |
Territorial authorities must identify potentially earthquake-prone buildings by: |
Owners of earthquake-prone buildings must complete remediation work within (time from issue of EPB notice):
|
||
|
Priority buildings
|
Other buildings
|
Priority buildings |
Other buildings |
|
|
High
|
1 January 2020
|
1 July 2022 |
7.5 years |
15 years |
|
Medium |
1 July 2022
|
1 July 2027 |
12.5 years |
25 years |
|
Low |
1 July 2032
|
35 years |
||
Once a building is determined as earthquake-prone, the relevant territorial authority issues to the building owner a notice (EPB Notice) which includes the deadline for completion of the remediation work, and must be displayed in a prominent place in the building. EPB Notices are usually included in a Land Information Memorandum (LIM) issued by the relevant authority. MBIE also maintains a public register of earthquake-prone buildings (EPB Register).1
The Bill
On 8 August 2024, the Government introduced the Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Bill (Bill).
The key purpose of the Bill is to extend the remediation deadlines for buildings assessed as earthquake-prone. The Bill also makes a number of other technical and miscellaneous changes to the Building Act 2004.
In introducing the Bill, Building and Construction Minister Chris Penk noted that “there are over five thousand earthquake-prone buildings up and down the country and in many instances these buildings are not being remediated because complying with the regulations is proving too complex and too costly”.2
Extension for remediation deadlines
Under the Bill, owners of earthquake-prone buildings who received an EPB Notice before the passage of the Bill and are yet to remediate their buildings will receive:
- a four-year extension to their current remediation deadline, if the building’s remediation deadline had not expired as at 2 April 2024; and
- a further extension of up to two years, if the Governor-General issues an Order in Council to grant this further extension (which it may do on the recommendation of the Building and Construction Minister), and provided the building’s remediation deadline has not expired as at the date of the Order in Council.
If an EPB Notice is issued on or after the passage of the Bill, the affected building owner will not receive the benefit of the extension of time. They will be subject to the existing statutory deadlines for remediation (although the deadline may be extended by a period of up to two years if the Governor-General issues an Order in Council as noted above).
If the Bill is passed, territorial authorities must automatically reissue EPB Notices for all affected buildings to record the new remediation deadline, and again reissue EPB Notices if the remediation deadlines are extended by a further period of up to two years. The EPB Register must also be updated in line with all reissued EPB Notices.
Broader regulatory reform affecting earthquake-prone buildings
The extension of the remediation deadlines under the Bill ties in with broader regulatory reform work that is underway.
The legislative regime for managing seismic risk in existing buildings is being reviewed by the Government. While originally scheduled for 2027, the review has been brought forward to 2024 due to concerns that the current system is not as effective as it could be.
One key criticism of the current system is that the regulatory burden and costs imposed on building owners is, in some circumstances, disproportionate to the life safety risks presented by the earthquake-prone buildings.
The terms of reference for the review were released in May 2024. The review will consider the regulatory responses to balancing life safety risks from the perspective of a building occupier or user, against the costs of regulation (including the costs of any required remediation work) and impact on private property owners.
The review will also look at how the seismic risk regime interacts with other legislation, such as the Health and Safety at Work Act 2015 and the powers that a territorial authority has under the Building Act 2004 to declare a building as “dangerous” in other respects.
The review process will occur in three stages, with an opportunity for the public to provide feedback included in the process. The final report is due in the second quarter of 2025. You can read more about the review in this Bell Gully publication.
The extension of the remediation deadlines will provide relief to many owners of earthquake-prone building owners while the review is underway, and will avoid a potentially substantial enforcement burden on territorial authorities during this period.
Public consultation in relation to the Bill is open until 11:59pm on 26 August 2024.
If you have any queries, would like to discuss how the Bill, or the review on the seismic risk regime, affects you, or would like assistance with submissions on the Bill, then please get in touch with the contacts listed or your usual Bell Gully adviser.
[1] https://epbr.building.govt.nz/[2] https://www.beehive.govt.nz/release/more-certainty-around-earthquake-prone-buildings>