Earthquake-prone buildings and leases

Under the Building (Earthquake-prone Buildings) Amendment Bill 2013, farm buildings are to be exempt from the requirements for assessments for hay, shearing, milk and implement sheds.

It was recognized that assessments were not justifiable in light of their low occupation rates, backed by there being no recorded fatalities from collapsing farm buildings in the Canterbury earthquake.

For all other buildings an assessment is required within 5 years; those falling under the 34% earthquake-prone building standard will need to be upgraded within 15 years, with an additional 10 years available to heritage buildings.  At present the Bill excludes residential buildings except those that are multi-storied and contain more than two homes.

Changes to the ADLS commercial lease terms have been made following the Canterbury earthquake, which now provides relief for tenants who are prevented from gaining access to their property by an exclusion zone despite the building itself being in good operating condition (e.g. the red zone in Christchurch’s CBD). It allows termination of the lease when:

  1. The premises are untenantable; or
  2. The damage to the premises requires demolition or reconstruction; or
  3. Necessary permits or consents are unobtainable or insurance monies are inadequate.

 It is now important for Tenants to know the condition of the building for insurance purposes, as some buildings may be uninsurable. If you are entering into a lease of commercial premises, contact our property team to assist with a due diligence review of the lease and the premises.