Earthquake Prone Buildings

A number of commercial buildings in the Wellington CBD suffered extensive damage in the recent earthquake. This seems like an appropriate time to explain the implications of new Earthquake legislation for commercial property.

In May this year Parliament passed the Building (Earthquake-Prone Buildings) Amendment Act due to come into force within the next two years. This Act which will have significant implications for owners of commercial property that could be classed as earthquake prone, as well as all territorial authorities.

The aftermath of the Canterbury Earthquakes highlighted problems in the systems for managing earthquake prone buildings under the Building Act 2004. The new legislation is designed to centralise information about earthquake-prone buildings across the country. It will also introduce a system for categorising buildings based on their seismic risk. A national register of earthquake-prone buildings will also be established.

Important features of the new legislation:

• The Act introduces special provisions for earthquake-prone buildings. The following buildings are excluded from these provisions (section 133AA):
  • A residential building – unless the building is a hostel, boarding house or other specialised accommodation with 2 or more storeys; or is a residential building with two or more storeys, and contains 3 or more household units.
  • A farm building
  • A stand-alone retaining wall
  • A fence
  • A monument
  • A wharf
  • A bridge
  • A tunnel
  • A storage tank
  • A dam

• An earthquake-prone building is defined in the act as a building that will have its ultimate capacity exceeded in a moderate earthquake, and if the building were to collapse, the collapse would be likely to cause injury or death to persons in or near the building or damage to any other property.

• The threshold for defining an earthquake-prone building remains at 34% NBS – unchanged by the Act. The Act does, however, clarify the meaning of earthquake rating, as determined by the appropriate territorial authority. An earthquake rating relates to how a building is likely to perform in an earthquake, and is usually expressed as a percentage or percentage range –
  • For example, if a territorial authority determines that a building meets 25% of the requirements of the building code, the earthquake rating of the building is 25% NBS.

• The process for identifying and fixing an earthquake-prone building will be based on the seismic risk. Seismic risk will be identified by the hazard factor of a particular area. The hazard factor or Z factor determines whether an area is high, medium or low seismic risk. Seismic risk will affect the time frame for identifying and reporting earthquake-prone buildings in an area, and the deadline for completing seismic work.
  • The Z factor of an area is the seismic hazard factor that would be used to design a new building on a site in that area in accordance with the following –
    a) the building code; and
    b) verification methods; and
    c) standard incorporated by reference into the building code or a verification method.
  • An area has a low seismic risk if the area has a Z factor that is less than 0.15. The deadline for completing seismic work in a low seismic area is 35 years.
  • An area has a medium seismic risk if the area has a Z factor that is greater than or equal to 0.15 and less than 0.3. The deadline for completing seismic work in a medium seismic area is 25 years.
  • An area has a high seismic risk if the area has a Z factor that is greater than or equal to 0.3. The deadline for completing seismic work in a high seismic area is 15 years.

• The Act has established a new regime for identifying priority buildings. Priority buildings in medium and high seismic risk areas will have shorter deadlines for completing seismic work. Deadlines will be half of the relevant timeframe. For example, if the building is in an area of high seismic risk, work will need to be completed in 7 years and 6 months, from the date that an earthquake prone building notice is issued. Priority buildings are buildings in areas of medium or high seismic risk and include:
  • hospitals, or other emergency service buildings;
  • a school or education facility that is regularly occupied by at least 20 people;
  • any part of an unreinforced masonry building that could fall from a building, or fall onto any public road, footpath or other thoroughfare; and
  • any building that has the potential to impede an important transport route if it were to collapse in an earthquake.

• The Act mostly imposes several burdens and requirements on territorial authorities. New timeframes have been introduced for identifying potential earthquake-prone buildings. Authorities will be required to report regularly on their progress. Earthquake-prone building notices will be issued for any building that is found to be earthquake-prone. These will outline the deadline for completing seismic work. Most existing earthquake-prone notices continue to apply, but territorial authorities will be required to issue a new earthquake-prone building or EPB notice after the Act officially comes into force.

• For owners of commercial property subject to these new provisions, if your building is identified as potentially earthquake-prone you will be sent a written request for an engineering assessment by your local territorial authority. Once an engineering assessment is carried out the territorial authority will determine whether the building is earthquake-prone and its earthquake rating. This information is then recorded in an earthquake-prone buildings or ‘EFB’ register.

• As the owner of an earthquake-prone building you would then be obliged to complete the work within the specified timeframe. If work is not completed within the deadline, or is not proceeding at a reasonable rate in light of this deadline, the territorial authority can apply for a court order to carry out the required seismic work. Costs would be recoverable from the owner of the building in this instance. It is clear that the legislation is designed to put the burden on owners of buildings in high risk areas to have their buildings assessed and upgraded.

• The Act is yet to come into force, and consultation on regulations to support the new legislation is still to be undertaken. This is the perfect opportunity for commercial property owners and territorial authorities to have some input into how this legislation will take shape. The impact of the recent earthquake in Wellington is evidence that new systems for identifying and remedying earthquake-prone buildings are desperately needed.