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Home / Business

Property Report: Character comes at a cost

NZ Herald
8 Dec, 2015 10:30 PM6 mins to read

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Regions have been categorised according to their earthquake risk.

Regions have been categorised according to their earthquake risk.

Vintage-lovers in the market for older buildings should know that strengthening requirements could mean big expenses ahead, writes Sandra Goodwin. FREE PROPERTY REPORT IN TODAY’S NZ HERALD: VALUATIONS FOR 420 SUBURBS

Fans of vintage apartments need to recognise 1976 has significance beyond being a good year for Olympic gold-medal gymnast Nadia Comaneci and Bay City Rollers' record sales.

It is a pivotal date because apartments built before 1976's adoption of earthquake resistant building standards are facing tougher earthquake-strengthening rules.

Management of these Auckland apartments' risk falls under existing Auckland Council policy but the Earthquake Prone Buildings Amendment Bill will bring new national rules and regulations.

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The bill, which is well on its way towards becoming law, initially proposed affected buildings nationwide would have to be assessed within five years and strengthened within 15 years. Owners of early apartments and commercial buildings pushed back, feeling they were facing excessive uncertainty and huge bills.

Building and Housing Minister Nick Smith subsequently announced the country would be split into zones according to the risk of a big earthquake, and the timeframes for assessment and strengthening varied accordingly. Low-risk regions such as Auckland and Northland will now have 15 years for assessments and another 35 years for strengthening work to be done.

High-risk regions still face the five- and 15-year deadlines while areas of medium risk will have 10 years for assessment and a further 15 years for work to be done. Heritage buildings can still get a 10-year extension -- meaning some buildings may not need strengthening for 60 years.

If you own or are eyeing up buying a pre-1976 apartment, it is important to keep abreast of this earthquake strengthening issue as it may herald large bills or raise uncertainty over saleability down the track.

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Auckland has the benefit of being in a low seismicity area, so buildings that might be more of a concern elsewhere in the country pose less of a risk here.

The challenge for those wanting to buy an older apartment is that the situation is a bit of a moving feast given the pending new law.

However, Smith has confirmed the new law will continue to draw the line defining when a building needs to be upgraded as those falling below 34 per cent of new building standards. This is the same point at which existing Auckland Council assessments classify them as earthquake prone.

This means existing council assessments provide important information for those wanting to understand what upgrading might be required.

The Building Act 2004 required all councils to develop and implement a specific earthquake-prone, dangerous and insanitary building policy. As well as covering hundreds of Auckland's historic commercial buildings, it covers residential properties two or more storeys high with three or more household units. That is exactly what our city's heritage apartment blocks are unless they've already been upgraded and strengthened.

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The 2011 Christchurch earthquakes provided grim evidence of lives lost directly as a result of the instability of unstrengthened heritage buildings. The Canterbury Earthquakes Royal Commission and a review by the Ministry of Business, Innovation and Employment recommended new rules address earthquake prone buildings.

In 2012, the Government introduced legislation to change the system for managing them.

Smith's office says it is hoped the Building (Earthquake-prone Buildings) Amendment Bill will become law this year. The bill has already passed through several stages towards becoming an Act of Parliament; its Select Committee having issued its final report in early September.

After the bill becomes law, detailed regulations will be developed to effect it.

Ian McCormick, general manager of Auckland Council's building control department, says the council was previously working towards a target date of having an Initial Seismic Assessment of all pre-1976 large residential and commercial buildings by December 2015. Because the bill's introduction foretold law changes to seismic assessment and strengthening requirements, Auckland Council suspended proactive prior assessment of earthquake prone buildings several months ago.

However, more than 7600 Auckland buildings have already been assessed, with about 1000 of those having been classified as being earthquake prone.

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So what information can guide you if you're exploring buying a vintage Auckland apartment? Existing Auckland Council assessments of seismic performance take the form of a grading scale based on what percentage of National Building Standards (NBS) it meets. These percentages are categorised into scaled grades ranging from A+ down to E.

McCormick says "most old buildings in Auckland tend to get either a seismic rating of C (not earthquake-prone) or D (potentially earthquake-prone) unless they have been substantially strengthened.

You do need to do your due diligence about this as it concerns something which is a major investment.

To obtain these assessments, McCormick recommends "in the first instance that buyers or individual owners always speak to the body corporate to see if they hold the appropriate information".

"If any assessment has been carried out and finalised then the report should be on the property file for the structure and the rating displayed on any LIM report obtained for the site.

"Customers can also call our seismic team to confirm whether the building has been assessed and what the seismic rating is," says McCormick. "Buildings that score at less than 34 per cent NBS (Grades D or E) are considered potentially earthquake prone."

To help owners and potential buyers understand what different grades of risk mean, there's some useful background information on the council's website.

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Under existing council policy, assessments are finalised after owners have had the opportunity to respond to a building's provisional report and a final in-house review is conducted.

Building owners are able to commission their own engineering assessment of their building to provide to council. Engineers engaged by owners often have more ability than council to undertake invasive investigations into the building structure and therefore can provide a more accurate calculation of a building's seismic strength.

Council will review owners' reports based on the new information provided and are able to change seismic ratings.

The seismic rating calculations used to achieve these grades are reasonably complex but take into account factors such as ground conditions, age of construction, construction materials and construction methodology.

"In the unlikely event we ever do get a significant earthquake, the buildings that are expected to exhibit more damage (and therefore have been the priority for our assessments) are unreinforced brick masonry buildings and early reinforced concrete frame buildings with brick infill. Timber buildings by and large are not a concern, and situations in which they fail are more often linked to brick elements in the buildings, geotechnical problems, or poor maintenance," McCormick says.

"Auckland has the benefit of being in a low-seismicity area, so buildings that might be more of a concern elsewhere in the country pose less of a risk here."

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The scale and cost of future strengthening of apartments will vary hugely on a case-by-case basis.

McCormick expects "a large number may require only the likes of wall or parapet anchors to strengthen them, while others may require floor diaphragms, in-situ shear walls or even supplemental steel frame bracing."

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