A building is earthquake-prone under the Building Act where it is assessed at less than 34 percent of New Building Standard and would be likely to collapse in a moderate earthquake causing injury, death or damage to other property.
Territorial authorities identify potentially earthquake-prone buildings, issue notices, and set deadlines for remediation. Those deadlines run to fixed dates.
How the timeframes work
Remediation deadlines depend on the seismic risk area the building is in — high, medium or low — and on whether it is a priority building.
Priority buildings include those on strategic transport routes, and buildings with particular occupancy characteristics where failure would have wider consequences. They carry shorter deadlines.
Notices must be displayed on the building, which has its own commercial effect on tenant and customer perception.
The 34 and 67 percent distinction
This confuses owners constantly.
34 percent is the statutory threshold. Below it, the earthquake-prone regime applies with notices and deadlines.
67 percent has no statutory status whatsoever. It became a market threshold because engineering guidance treated it as the point below which risk to occupants is materially elevated relative to a new building, and the market adopted it.
The commercial consequences of sitting below 67 percent are substantial and entirely disconnected from the legal position:
- Institutional and government tenants commonly require 67 percent or better as a leasing condition.
- Insurers price differently, and cover can become harder to place.
- Lenders apply it in valuation and lending criteria.
- Purchasers discount for it.
So a building at 40 percent NBS can be entirely legal, outside the earthquake-prone regime, and still difficult to lease, insure and finance.
Get the right assessment before deciding
An Initial Seismic Assessment is relatively coarse screening based on limited investigation. A Detailed Seismic Assessment involves site investigation, structural analysis and modelling of the actual building.
The difference is significant and moves in both directions — buildings screened as poor performers have been reassessed considerably higher, and buildings assumed adequate have come in lower.
Before committing to strengthening on the basis of an initial assessment, get a detailed one. Strengthening is expensive and the scope should be driven by real analysis.
The regional economics problem
This is where the regime bites hardest and is least discussed.
Strengthening cost is broadly similar wherever the building is. Rents and values are not.
In Auckland or Wellington, strengthening cost may be recoverable through rent or capital value. In a provincial centre where rents are materially lower, strengthening frequently costs more than the resulting value uplift — which is how buildings end up economically stranded despite being structurally repairable.
Owners in that position face a genuinely difficult decision between strengthening at a loss, demolition, or a change of use that alters the requirement.
Practical steps for owners
- Know your actual number, the assessment type, the date and the standard applied.
- Check for a council notice and its deadline. These do not pause.
- Get a detailed assessment before deciding to strengthen where only an initial one exists.
- Read your lease. Who pays for strengthening, what happens if a rating changes during the term, and whether a tenant can terminate if the building is deemed earthquake-prone should all be addressed expressly rather than left to general damage and destruction provisions.
- Factor in disruption. Strengthening frequently requires vacant possession, and lost rental is often the larger cost.
- Bundle the work. If a building must be vacated for strengthening, that is the moment to do services and energy upgrades — the disruption cost is already being incurred.
For tenants
Seismic provisions have become a standard negotiation point. Ask for the rating and the assessment type before signing, and address who bears strengthening cost, what happens if the rating falls during the term, and whether you can terminate if the building is deemed earthquake-prone.
Consider business continuity too. If your principal asset is your people, where do they work if the building is closed for strengthening?
MBIE administers the earthquake-prone building system and publishes the methodology, guidance and national register free at building.govt.nz. Territorial authorities publish their own registers and deadlines.
General information only, not engineering or legal advice. For any specific building, engage a chartered professional engineer.
