New Zealand: Young Kiwi's life cut short: obligations of a building owner

Last Updated: 11 February 2015
Article by David Fitchett

In January 2013 Jacob Marx, a young Kiwi lawyer enjoying his O.E. over in London, was walking home when he was hit and killed by a falling shop sign that had been dislodged by high winds. A subsequent inquest discovered that the sign had neither been properly secured or regularly maintained. This was an accident just waiting to happen and could just have easily have occurred on the streets of Christchurch.

The circumstances of Mr Marx's tragic death serve as a sombre reminder that a building owner is responsible for ensuring their building is safe. Closer to home dangerous buildings are firmly in the spotlight as the Government embarks on a flurry of reforms to health and safety legislation in the wake of the lives lost in the Pike River disaster and Christchurch earthquakes.

We briefly discuss the latest developments below:

Obligations of a building owner under the Building Act 2004

One of the key purposes of the Building Act 2004 is to ensure that buildings are built, maintained and used in such a way that they do not pose a risk to people or property.

Building standards

The Building Act, together with the Building Code (as part of the Building Regulations), sets out the minimum standard to which new buildings must be built. These standards are known as the "new building standard" or "NBS". Existing buildings are not exempt either – they must meet at least 34% of the standard to which a new building must be built.

Compliance schedules and building warrants of fitness

The Building Act also requires the owner of a building with specified systems (which include, but aren't limited to, sprinklers, lifts, and fire alarms) to keep a compliance schedule which lists how often the systems have been inspected and maintained. The owner must also provide their local council with an annual building warrant of fitness (WOF) to confirm the building's specified systems are being kept in good working condition. The compliance schedule and WOF must be publically displayed. If a building owner fails to maintain a compliance schedule or WOF they could be liable for a fine of up to $20,000, together with a continuing fine of $2,000 for every day the offence continues.

Council inspections and notices to fix

The Building Act requires a local council to immediately carry out an inspection if they become aware that a building may be unsafe. If the inspection raises further red flags a council may issue the building's owner with a "notice to fix" which states that the building must be made safe within a certain timeframe.

In extraordinary circumstances a council is able to step in without notice and carry out any work necessary to remedy an immediate danger. The building may have to be evacuated in the meantime and hoarding may be erected to prevent people approaching the building.

A council may also impose a fine of up to $200,000, together with additional fines of $20,000 for each day the notice to fix is not complied with. It is also an offence, punishable by a fine of up to $100,000 (with continuing fines of $10,000 per day) to allow a building to be used which is unsafe or without an adequate means of escape from fire.

Earthquake prone buildings

The Government intends to amend the Building Act with the passage of the Building (Earthquake-prone Buildings) Amendment Bill which is currently making its way through Parliament. The Bill would require every commercial building owner to have their building(s) assessed by a qualified engineer within 5 years of the Bill coming into force. Building owners will then be given 15 years to bring any earthquake prone buildings up to at least 34%NBS (25 years if the building is a heritage building).

Buildings which pose an immediate hazard (e.g. contain unreinforced masonry or falling hazards) will have to be strengthened within a shorter timeframe. Please refer to our earlier article here for further information on the Building (Earthquake-prone Buildings) Amendment Bill.

Obligations of a building owner under health and safety legislation

The Health and Safety in Employment Act 1992 (HSE Act) requires a person who controls a place of work (which includes a building's owner) to take all practicable steps to keep a building they own or occupy from causing harm.

Arguably a building owner will not be excused from liability under the HSE Act even if their building satisfies the Building Act's requirement of 34%NBS. The HSE Act does not concern itself with minimum standards. A building owner will need to consider the specific circumstances of their building to ascertain whether they should be safeguarding their building to a higher standard in a shorter timeframe.

Changing obligations under the Health and Safety Reform Bill

The Government proposed to replace the HSE Act with a new piece of legislation known as the Health and Safety Reform Bill. This Bill is currently before a select committee and the effect of the new legislation on a building owner is still unclear. It is currently proposed however that the new law would appoint building owners as a PCBU (being a "person conducting a business or undertaking").

As a PCBU a building owner would be required to actively consult with the people using their buildings to ensure they are safe to occupy. If the building is tenanted, the building owner may be able to delegate some of their obligations to the tenant's manager (who will also take the role of a PCBU). However the building owner will still be required to exercise due diligence to ensure that the tenant is complying with its health and safety duties.

If the building is owned by a company, the Bill proposes to make the company's directors personally responsible for ensuring the building is being occupied safely.

The penalties are proposed to significantly increase under the new legislation. An individual PCBU or a director may be liable for a penalty of up to $600,000 or 5 year's imprisonment (or both) if they are reckless in exposing an individual to a risk of death or serious injury. A company would be liable for a fine of up to $3 million.

We will keep an eye on the Bill's passage through Parliament, and report on its final form in a future newsletter update.

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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David Fitchett
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