‘Landlords should pay for strengthening’
May 22, 2014Tenants believe landlords should be footing the bill for shoring-up buildings, writes LIZ McDONALD. The Press
Business tenants are becoming less worried about the earthquake safety of their premises, but most still think landlords should pay for any strengthening needed.
A survey of tenants by real estate firm Colliers has found that while more than half had reported concerns about their buildings in a quake last year, that had lessened this year.
“Seismic strength remains a concern for just under half of our survey respondents. However, the level of concern has slowly subsided since we started the survey,” the Colliers’ report said.
The researchers attributed the change to four factors – time elapsing since the Canterbury quakes, better understanding of the issues, more information from government on strengthening requirements, and landlords starting to strengthen buildings.
Under the Building (Earthquake-prone Buildings Amendment) Act before parliament, local councils would have five years to assess the quake-strength of buildings, then give building owners 15 years to get them up to standard.
In Canterbury, in addition to local councils’ current seismic strengthening rules, the Canterbury Earthquake Recovery Authority has special powers to make owners either upgrade or demolish at-risk buildings.
Wellingtonians were the most concerned at 60 per cent, followed by Cantabrians at 48 per cent and Aucklanders at 43 per cent.
Across the country, most tenants believed that requiring all buildings to meet 33 per cent of new building code was not tough enough. Almost half said between a third and two-thirds of code was sufficient, while slightly fewer wanted two-thirds to 100 per cent.
While 40 per cent thought all New Zealand’s buildings should have to meet minimum seismic standards, most said it should vary by region.
Wellington, Canterbury and Hawkes Bay, in that order, were considered those most in need of laws requiring quake-prone buildings to be upgraded to at least 33 per cent of the new code.
Fewer than 20 per cent thought buildings in the rest of the country needed strengthening, with Auckland given lowest priority.
Most respondants to the survey, 62 per cent, thought owners should meet the cost of strengthening their buildings. Just under 20 per cent thought the landlord and owner should share the cost, while about the same number thought central or local government should pitch in.
“This could have serious cost implications for owners,” the report said.
It attributed the regional focus on both the differing risk of major earthquakes and recent media attention on strengthening costs.
The Property Council has estimated that 15,000 to 25,000 buildings in New Zealand are suspected to be below 33 per cent of their local building code.
The council has urged the Government to “seriously consider” the costs and affordability issues of earthquake strengthening. The effects could contribute to the economic decline of businesses and the weakening of entire local communities, the council has said.
Meanwhile, BusinessNZ, a national body which represents business owners internationally, says requiring upgrades would be unfair and unaffordable in some places.
BusinessNZ economist John Pask said upgrade-or-demolish policies were “not necessary” because normal market pressures were already leading to action.
“Earthquake-vulnerable buildings are already attracting higher insurance premiums, and this will automatically lead to building owners strengthening them accordingly or demolishing them,” Pask said.
“Putting a regulatory requirement on top of this situation, where building owners have to upgrade or demolish within 20 years, is unnecessary.”
He said the policy’s “one-size- fits-all requirement” did not take account of local conditions.