New Zealand: A new system to address earthquake-prone buildings in New Zealand

BRIEF COUNSEL

On 1 July 2017, the new national system for identifying and managing earthquake-prone buildings came into force.

In a nutshell

  • Legislation creating a new system for identifying and managing earthquake-prone buildings came into force on 1 July 2017 by way of amendment to the Building Act 2004 (Building Act).
  • Previously, it was only the seismic strength of the building structure that was assessed and given an NBS rating.
  • Under the new system, the seismic strength of "building elements" must also be assessed and the overall New Building Standard (NBS) rating for a building must take the earthquake scores for individual building elements into account.
  • The new guidelines recommend that engineering assessments assume that building services do not comply with the standards until proven otherwise.

Background

On 1 July 2017, the new national system for identifying and managing earthquake-prone buildings came into force. It was created by way of amendment to the Building Act 2004 and includes regulations, a methodology to identify earthquake-prone buildings and engineering assessment guidelines. The creation of a new approach to identifying and managing earthquake-prone buildings followed extensive public and industry consultation by the Ministry of Business, Innovation and Employment (MBIE).

The new system aims to strike a balance between protecting people from harm in an earthquake, the costs of strengthening or removing buildings, and the impact on New Zealand's built heritage.

Key changes to the Building Act

The key changes include the following:

  • Under the previous legislation, a building was earthquake-prone if it would have its ultimate capacity exceeded in a moderate earthquake, or it would be likely to collapse causing death or injury or damage to any other property. Under the new legislation, part of a building can also be earthquake-prone.
  • The country is divided into high, medium and low seismic risk areas. The seismic risk of an area affects the timeframes within which a territorial authority must identify buildings or parts of buildings that are potentially earthquake-prone, and the timeframes within which seismic work must be completed. For example, territorial authorities must identify potentially earthquake-prone buildings in high seismic risk areas by 1 July 2020 and owners must remediate buildings assessed as being earthquake-prone within 15 years of receiving an earthquake-prone building notice.
  • A category of "priority buildings" has been established in high and medium seismic risk areas. Priority buildings are seen to be high risk because of their construction, type, use or location. The timeframes for remediating priority buildings are much shorter.
  • Despite the timeframes for remediation, any buildings that are earthquake-prone will need to be remediated when substantial alterations are undertaken.
  • Information about earthquake-prone buildings will be publically available through a newly created EPB register.

From a practical point of view, a building will still only be earthquake-prone if it is less than 34% NBS. However, many building owners and tenants will want the buildings they own and occupy to have a higher NBS rating than this as part of New Zealand's growing focus on corporate responsibility. We have already seen this in Wellington in terms of Government tenants often electing not to occupy buildings with an NBS of less than 80%, and corporate tenants being reluctant to lease buildings with an NBS of less than 67%.

Methodology and guidelines

Two of the key documents in the new system are:

  • the EPB methodology, which is set by MBIE, and
  • the engineering assessment guidelines, which are produced jointly by three technical engineering societies (New Zealand Society for Earthquake Engineering (NZSEE), the Structural Engineering Society and NZ Geotechnical Society Inc) in conjunction with MBIE and the Earthquake Commission.

The EPB methodology guides territorial authorities through the process of identifying earthquake-prone buildings, tells engineers how to undertake engineering assessments, and sets out how territorial authorities are to determine whether a building is earthquake-prone and, if so, to allocate an earthquake-rating.

The guidelines are incorporated by reference through the EPB methodology. They provide engineers with the framework and technical methods required to be used in carrying out assessments and giving each building an NBS rating.

These two key documents aim to provide consistency across the system.

We have previously seen that the quality of seismic engineering reports can vary widely. This applies to initial and detailed seismic assessments. One of the broad objectives of the guidelines is to reduce the variation between assessments. However, the guidelines note it should be appreciated that there will always be a degree of variation between assessments as the overall process of seismic assessment is a judgement-rich exercise.

New approach to building elements

In the Christchurch earthquakes, the biggest cause of death and injury (apart from the CCTV building collapse) was unrestrained "building elements". "Building elements" are widely defined as "any structural or non-structural component and assembly incorporated into or associated with a building" and specifically includes fixtures, services, drains, permanent mechanical installations for access, glazing, partitions, ceilings and temporary supports.

Under the previous guidelines (the 2006 NZSEE Guidelines), no guidance was provided on building elements that are not part of the primary structural system of a building. This meant that building elements were not previously included in the overall NBS rating of a building.

As a result of the Christchurch earthquakes, this gap, along with several others, has been plugged. The new guidelines require the seismic strength of building elements to be reviewed, as well as the building structure itself. They also require the overall NBS rating for a building to be the lowest earthquake score given to an individual building element. This means a building that would otherwise have an earthquake rating of 80% NBS will have a rating of 20% NBS if it contains a building element that scores 20% NBS.

Assumption of non-compliance

The new guidelines are primarily focussed on life safety issues. They require consideration of two general forms of life safety hazards – the first is when the ultimate capacity of the building, a part of the building or a primary structural element is exceeded to the extent that a significant life safety issue arises, and the second is when a falling secondary structural or non-structural (SSNS) building element poses a significant life safety hazard.

Current commentary in the market suggests that SSNS building elements have historically received less seismic consideration than the primary building structure. In addition, it is emerging that there has historically been a limited and variable degree of compliance with standards for building services. The new guidelines specifically state this and, as a result, go as far as recommending that engineering assessments should always assume non-compliance with the standards until proven otherwise.

Given this assumption, and the new approach to building elements, we recommend that building owners have their existing seismic assessment reports reviewed to check the level of compliance with the new guidelines. In our view, the majority of existing seismic assessments will not comply. In these circumstances we recommend building owners take a proactive approach and obtain detailed seismic assessments of their buildings (which will include assessment of the SSNS building elements) pursuant to the new guidelines. As well as confirming the NBS rating for the building in accordance with the new guidelines, this will confirm whether the SSNS elements comply with the standards.

Key areas of concern

  • The assumption that building services do not comply with the standards: this puts the onus on building owners to check that all building services comply, even if they hold all required sign-offs under the Building Act.
  • Capacity for carrying out seismic inspections: we are likely to see engineers at capacity with seismic assessment work.
  • Quality and consistency: ensuring seismic assessments are carried out consistently and to a high quality remains a key area of concern. This will require continuing professional development for engineers involved in carrying out assessments, and oversight by the relevant regulatory and professional bodies.
  • Cost implications: we are likely to see a rise in costs associated with assessment and remediation of earthquake-prone buildings, which may be passed on to tenants.

Next steps

If you would like further information on how the new system for identifying and managing earthquake-prone buildings is likely to affect your business, please contact the lawyers featured.

The information in this article is for informative purposes only and should not be relied on as legal advice. Please contact Chapman Tripp for advice tailored to your situation.

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