TC3 is probably the least understood technical category
for green zoned land in Christchurch. Richard Lang and Janine
Ballinger, of Duncan Cotterill Lawyers, shed some
A TC1, TC2, or TC3 land zoning means that the land is zoned
green, however, the technical category describes how the land is
likely to move and react if there was another large earthquake. TC3
land may suffer moderate to significant land damage from
liquefaction. But the real relevance of the TC3 zoning is the
standard required to repair damage to foundations or building
foundations for new buildings.
So what does it really mean for you? Should you purchase a house
in TC3? What impact will it have on you going forward? What will
your bank say? What will your insurance company say?
It's true that you have to be more diligent when buying a
TC3 property. But, as with most things, there are varying degrees
of TC3 properties. Some properties have fared extremely well during
the earthquakes, suffering only cosmetic damage and the land itself
is relatively unscathed. Not all TC3 properties will require
complex foundation design.
If you want to buy a TC3 property that is relatively undamaged,
you will still need to complete your normal property due diligence.
This includes an investigation on the EQC claims and private
insurer claims. TC3 zoning on a property appears to slow the EQC
and insurance claim process, so don't expect that the damage
you see will be repaired soon. This will impact on your ability to
make the home your own as any improvements or redecoration work you
might like to undertake will upset the claims process.
Some TC3 properties were deemed rebuilds by the relevant insurer
early on in the process. Some rebuilds have already begun and some
are even completed. If you encounter a property that has already
been rebuilt, at least you have the assurance that they have been
constructed in accordance with the current requirements.
At the other end of the scale, there are TC3 properties that
have suffered significant damage to the house as well as land
damage. If you are looking at such a property, your ability to
finance and insure it is compromised.
It's important to keep perspective on TC3 properties. In
general, in order to build on TC3 land post-earthquake, you must
supply the Council with a professional geotechnical report. This is
part of the building consent process. The geotehnical engineer must
be trained or qualified in assessment of foundations and
liquefaction. Essentially, that geotechnical report must show that
the foundation designed for the new house meets the ground
requirements of the land. Even when you applied for a building
consent pre-earthquake, you had to supply an engineering report on
the foundation for many properties to ensure it was appropriate for
the ground bearing capacity of the land. The perception that there
are hefty new requirements for building is only partially true. The
requirements are more thorough. But it is an expansion of what was
While building new or replacement buildings on TC3 land may
require more than other properties in terms of engineering advice,
foundation design, and cost, buyers may be content with the
existing building on the property (provided any damage is
repaired). So, the TC3 zoning is not such an issue for the buyer.
Of course, the TC3 zoning may have an impact on re-sale value.
If you are looking at a TC3 property, one of the first things
you should do is talk to your financier and understand their
lending policy on TC3 properties and any conditions. They may also
want specific reports so they can assess your credit application.
Make sure you have these reports covered in your purchase
agreement. You also need to ask your insurance company if they will
provide replacement cover. If so, what conditions do you need to
satisfy?. Without insurance cover, you won't be able to
complete your financing requirements.
While TC3 seems to have a bit of a stigma attached to it,
depending on the property, buying in this category can be as
straightforward as any other in Christchurch. The bottomline, as
always, is buyer beware. Complete your due diligence. Ask a lot of
questions on the home, the land, the EQC and insurance claims as
well as identifying and satisfying insurer and financier
requirements. Fully understand what you are buying and any
associated risks. Dig depper if you have unanswered questions
during your purchase. Use experts to complete specialist reports so
you can gain a better understanding of the property. As always,
seek professional advice to guide you through this process.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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