Earthquake-prone buildings reform: Government unveils a proposed new risk-based system

The proposals will be contained in amendments to the Building Act 2004. If enacted the proposals will significantly reduce the number of buildings that are categorised as being EPBs and will also change the obligations that apply where a building is categorised as being an EPB. The proposed changes are expected to remove approximately 55% of buildings (around 2,900) from the EPB register, materially reduce the scale of remediation for many others, and focus interventions on buildings that pose a genuine risk to life in medium and high seismic zones.

As outlined in our June 2024 article here, a review of the EPB system was launched in 2024 to ensure that the system was workable, proportionate, and effective in safeguarding people while recognising the realities faced by property owners. In response to the findings of the 2024 review, the Government has announced a suite of reforms that represent a fundamental shift in approach to the categorisation and management of EPBs. 

Categorisation of EPBs – removal of the NBS

A key feature of the new system is the removal of the New Building Standard (NBS) percentage metric, which was described by Minister Penk as “well-intentioned” but leading to an “overwhelming financial burden on building owners”.  

Under the current legislative regime, buildings assessed as less than 34% NBS are categorised as EPB. The proposals remove the NBS rating system and instead focus on specific building types and locations:

• unreinforced masonry buildings with unsecured façades or walls facing public areas or above neighbouring properties will be automatically deemed to be EPBs, without the need for further assessment; and
  
  
• buildings of heavy construction (generally concrete) of 3+ storeys will be assessed for EPB status using a new targeted retrofit methodology. Details of the targeted retrofit methodology have not yet been announced, but will address only critical vulnerabilities that could lead to building collapse. 

No EPBs in some parts of New Zealand - Auckland, Northland, and the Chatham Islands

In addition to changing the way in which EPBs will be determined, the proposals will also introduce significant changes based on seismic zones. All EPBs in low seismic zones - Auckland, Northland, and the Chatham Islands - will have that status removed and no buildings in these areas will be able to be designated as EPBs. This is expected to remove approximately 25% of the buildings from the EPB register.

The identification timeframes and remediation timeframes for other seismic zones (medium and high risk) will not change, although coastal Otago, including Dunedin and Stewart Island, will shift from a low to a medium risk seismic zone. Despite this, the remediation deadlines for EPBs in this area are not proposed to change, and the deadline for identifying EPBs in this area will not change.

Obligations for addressing EPBs

Under the proposals, if a building is determined to be an EPB, the obligations for addressing this will depend on the building type and location, with building owners able to choose whether to meet the required mitigation or demolish the building:

• for EPBs categorised as the lowest risk – 1 to 2 storey unreinforced masonry buildings in rural or small towns - they will be recorded on the risk register only, with the Minister explaining that “the risk of a façade falling on a pedestrian is simply lower in communities with fewer than 10,000 residents than it is in larger urban centres, because there are fewer people on the streets”. While not required to remediate, an owner of an EPB with a “risk register” requirement will need to undertake at least façade securing to have their EPB status removed;
  
  
• unreinforced masonry buildings will otherwise require façade securing except in the case of 3+ storey buildings in urban centres which will require full retrofits. This is intended to be at a level comparable to the current mandatory minimum although the detail has not yet been provided; and
  
  
• 3+ storey or higher buildings of heavy construction (e.g. concrete) will require a targeted retrofit that addresses the worst vulnerabilities. The specific requirements of this targeted retrofit requirement have not yet been provided.

These categories are outlined in the table below.

 
A building that does not meet one of the requirements set out above will not be required to display an EPB notice. However, this information will continue to be stored and made publicly available on the EPB Register.

Priority buildings redefined

Under the current system, priority buildings are a special category of EPBs that present a higher risk to public safety or to an essential community service, which must be identified and remediated twice as quickly as other EPBs in the same seismic risk zone.

Under the proposed changes, the definition of priority buildings will be narrowed so that the only EPBs that are to be treated as having priority status will be:

• unreinforced masonry buildings (e.g. unsecured façades) that could fall onto high-traffic footpaths or roads in an earthquake; and
  
  
• buildings that could block emergency services routes if they collapsed in an earthquake. 

Buildings such as hospitals, schools, police and fire stations will no longer be categorised as priority buildings under the proposals. The Minister has stated that this is on the basis that Government agencies should prioritise, fund and implement their own seismic risk mitigation as good stewards of their buildings, without the need for an additional requirement in the Building Act. 

Engagement with councils and regulatory relief

Under the proposed changes, owners of EPBs will be able to apply to the relevant territorial authority for seismic work deadline extensions of up to a cumulative total of 15 years, with conditions able to be set. In deciding whether to agree to an extension, Councils will be able to consider matters such as the building ownership structure, mitigation requirements, the extent of remediation required, any steps taken to plan or carry out seismic work, whether the building is a priority building, and the building’s remediation deadline.

This proposed amendment will have retrospective effect, with EPB owners with seismic work deadlines that expired on or after the date of commencement of the Amendment Act also able to apply for an extension of up to 15 years from the point of approval.

A further change in relation to Councils will be to remove the ability to identify a building as an EPB at any time as is currently the case under the Building Act. Instead, a building will only be able to be identified as an EPB if:

• it was completed before commencement of the Amendment Act;
  
  
• it is a high risk post 1976 3+ storey building of heavy construction in a medium or high seismic zone; and
  
  
• the Ministry for Business Innovation and Employment (MBIE) Chief Executive authorises the territorial authority’s designation.

The reforms will also remove the automatic requirement to upgrade fire safety and disability access when undertaking seismic strengthening works. The Government considers that this change will significantly reduce costs and encourage essential seismic safety work, while leaving owners free to make those upgrades if they wish. Further regulatory relief, including potential changes to resource management and heritage rules, is also under consideration.

Relationship with health and safety

The Government has indicated that, in addition to the proposed amendments to the Building Act, part of the proposed reform of the Health and Safety at Work Act is intended to address the fact that if building owners comply with relevant requirements under other legislation to manage a health and safety risk, the Health and Safety at Work Act does not require a higher standard. This is consistent with the existing guidance from WorkSafe on health and safety and earthquake risks.¹  

What next?

The legislative vehicle for these changes is the Building (Earthquake-prone Building System Reform) Amendment Bill. If the process proceeds as planned, the Amendment Act is expected to be enacted before the 2026 general election. 

The Government expects the impact of these proposed changes to be substantial and has indicated a view that only around 80 buildings across the country will require a full retrofit due to their risk profile, with potential savings of $8.2 billion across remediation, demolition and compliance costs. 

It is clear that in proposing these changes, there is an intention to have a simpler model for determining which buildings warrant intervention in order to address “genuine risk to human life”. As with many proposals relating to significant legislative change, the “devil will be in the detail”, particularly in relation to what is required in relation to remediation. However, it is the case that the NBS methodology has not been particularly easy to apply, especially when it comes to determining issues such as whether it is appropriate for EPBs to continue to be occupied. Clarity in this area is likely to be welcomed by building owners and managers. 

For landlords and tenants, it will be important to check how any seismic provisions in their leases respond once the changes are enacted, particularly with reference to the targeted retrofit methodology (once that is made available).   

Bell Gully will continue to track the progress of this proposed legislative reform.

If you have any questions about these issues, please get in touch with the contacts listed or your usual Bell Gully adviser.

[1] WorkSafe policy clarification: Dealing with earthquake-related health and safety risks, June 2018.

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Disclaimer: This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.