Earthquake prone buildings

Tuesday October 16, 2012


As required by the Building Act 2004, the Tauranga City Council adopted a policy on earthquake-prone buildings within its District and started investigating earthquake prone buildings beginning with the CBD.  

A number of buildings have already been identified as earthquake prone and in some cases the owners have been issued with notices to fix.

If a commercial building is deemed earthquake prone, a number of issues arise for the property and business owners alike.

  1. What if the owner disagrees with the Council's assessment?
  2. What time limits apply and what happens if the owner fails to meet these?
  3. If the building is leased, what are the owner's obligations to its tenants? 
  4. Are there different obligations if the Council has notified the owner that the building may be earthquake prone but has not yet issued a notice to fix?
  5. Are the remediation costs deductible as an expense?
  6. How does the lease deal with the issue of remediation with respect to:

    (a) Business interruption?

    (b) The basic annual rent and other ongoing obligations?

    (c) Improvements rental adjustment?

    (d) Access to carry out the repairs?

    (e) Possible cancellation of the lease?
  7. Do business owners owe any obligations to employees and, if so, are the obligations different depending on whether the building is considered earthquake prone or if a notice to fix has been issued?
  8.  What the implications for a temporary close down of business and what are you obligations to staff if this occurs?
  9. How will insurance cover be effected and will any damage caused by an earthquake be covered by the insurer if the owner was aware that the building was considered earthquake prone?
  10. Is the owner exposed to other claims, for example to members of the public, if the owner is aware that the building is earthquake prone?
  11. What are the owner's obligations to adjoining building owners?

The answers to these questions are not clear cut and differ depending on the factual circumstances.  However, they are issues that owners of commercial buildings should be turning their minds to with urgency.

Holland Beckett has highly experienced lawyers in all aspects of various areas of law necessary to deal with the complex issues that arise out of owning an earthquake prone building.

Contact Michelle Paddison direct on (07) 9272756