New Zealand’s earthquake prone building system is in the middle of the most significant change since it was established. All non lapsed remediation deadlines as at 2 April 2024 were extended by four years under the Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Act 2024, which came into force on 26 November 2024. Beyond that, the Government has announced a refocused system that would remove Auckland, Northland and the Chatham Islands from the earthquake prone building regime entirely.

For building owners, this creates a genuinely difficult position: obligations that currently exist may not exist in the same form by the time they fall due. This article sets out where things stand and how owners are approaching the decision.

The current framework

A building is earthquake prone if it is assessed at below 34 percent of the New Building Standard, expressed as 34 percent NBS. Territorial authorities identify potentially earthquake prone buildings, owners obtain engineering assessments, and buildings confirmed as earthquake prone must be remediated within a statutory timeframe or demolished.

The timeframes vary by seismic risk zone and by whether the building is a priority building, which includes buildings on strategic transport routes, and those with high occupancy or particular vulnerability such as unreinforced masonry.

What has changed

The four year deadline extension. The Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Act 2024 came into force on 26 November 2024 and extended all remediation deadlines that had not already lapsed as at 2 April 2024 by four years. This was an interim measure to give the Government time to complete its wider review without owners being forced to commit capital under rules that were about to change.

The refocused system. Following the earthquake prone building and seismic risk management review, the Government announced a substantially narrowed system. The announced changes include:

  • Removing Auckland, Northland and the Chatham Islands from the earthquake prone building system entirely, on the basis that seismic risk in those regions does not justify the cost of the regime
  • Introducing tiered requirements calibrated to actual risk rather than applying a single approach nationally
  • Removing the requirement to carry out concurrent fire safety and accessibility upgrades when undertaking seismic work

That last point is significant and often overlooked. Under the existing framework, substantial alteration work can trigger obligations to upgrade fire safety and accessibility “as nearly as is reasonably practicable” to current code. In many cases the cost of those associated upgrades exceeded the cost of the seismic strengthening itself, which deterred owners from doing the seismic work at all.

The Government has estimated the reform package will save more than $8.2 billion. Implementation is expected around mid 2027, through the Building (Earthquake-prone Building System Reform) Amendment Bill.

What this means for Auckland owners

If the announced reform is implemented as described, Auckland commercial buildings would fall outside the earthquake prone building regime. That does not make seismic performance irrelevant, and owners should be careful about treating it as a full release.

Seismic rating continues to matter for reasons independent of the statutory regime:

Insurance. Insurers price on seismic rating and some decline or restrict cover on low rated buildings. This is a commercial reality regardless of what the Building Act requires.

Lending. Banks and other lenders frequently impose seismic rating requirements as a condition of finance.

Tenant requirements. Many corporate and government tenants have internal minimum NBS thresholds, commonly 67 percent or higher, and will not occupy below them regardless of legal compliance. Government agencies in particular apply their own standards.

Valuation. A low NBS rating affects value, marketability and the pool of prospective purchasers.

Duty of care. Owners have obligations to occupants that are not exhausted by minimum statutory compliance.

In short, for Auckland owners the reform is likely to change the deadline pressure and the compliance mechanism, but not the commercial case for understanding and, where warranted, improving seismic performance.

How to approach the decision now

Get a current assessment. You cannot make a decision without knowing the building’s rating. A detailed seismic assessment by a suitably qualified engineer is the starting point, and an initial seismic assessment is not a substitute for it where a decision of consequence rests on the number.

Understand where your building sits against the market, not just the law. If the target tenant pool requires 67 percent NBS and the building sits at 40 percent, the statutory position is not the binding constraint. The leasing market is.

Coordinate seismic work with other capital works. Strengthening is disruptive and frequently requires vacant possession of affected areas. Where a building needs a services upgrade, a Cat A refresh or a repositioning, doing the seismic work at the same time is materially more efficient than doing them in separate campaigns. The removal of mandatory concurrent fire and accessibility upgrades, if implemented, makes this coordination easier rather than less relevant.

Watch the legislation rather than assuming the outcome. The reform is announced and expected around mid 2027, but bills change during passage. Decisions with long lead times should be made on a realistic assessment of the range of outcomes, not on the announcement alone.

Factor construction cost timing into the decision. RLB forecasts New Zealand construction cost escalation rising from around 1.6 percent at the end of 2026 toward and beyond 3 percent by 2029. Deferring strengthening work is not cost neutral.

Delivering strengthening work in an occupied building

Seismic strengthening is among the most disruptive work that can be carried out in an existing building. It involves structural intervention, which means noise, vibration, dust, and often temporary loss of use of affected areas.

It can still be delivered in stages around an operating building, and frequently is. The approach mirrors other live environment work: zone the building, isolate the works, restrict the most disruptive activities to after hours, maintain compliant egress at every stage, and coordinate closely with occupants. What is different about seismic work is that the structural intervention often dictates the zoning rather than the other way around, because you cannot stage structural work purely for the convenience of the occupier.

Where strengthening and fitout are combined, sequencing them together under a single delivery team avoids the common and expensive pattern of completing a fitout and then returning to open up ceilings and walls for the structural work.

Frequently asked questions

What is the NBS threshold for an earthquake prone building? A building is earthquake prone if assessed at below 34 percent of the New Building Standard. Many tenants, lenders and insurers apply higher thresholds of their own, commonly 67 percent NBS or above, which frequently matters more commercially than the statutory threshold.

Have earthquake prone building deadlines been extended? Yes. The Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Act 2024, in force from 26 November 2024, extended all remediation deadlines not already lapsed as at 2 April 2024 by four years.

Is Auckland being removed from the earthquake prone building system? The Government has announced that the refocused system will remove Auckland, Northland and the Chatham Islands from the earthquake prone building regime. Implementation is expected around mid 2027 via the Building (Earthquake-prone Building System Reform) Amendment Bill. Until that legislation passes, existing obligations continue to apply.

Will I still need to upgrade fire safety and accessibility when strengthening? Under the announced reform the requirement for concurrent fire safety and accessibility upgrades when undertaking seismic work would be removed. This was one of the largest cost barriers to strengthening under the existing framework. Confirm the position at the time of the works, as this depends on the legislation being enacted.

Does a low NBS rating still matter if my building is exempt? Yes, commercially. Insurers, lenders, tenants and purchasers all apply their own seismic requirements independently of the Building Act. A low rating affects insurability, financeability, the pool of prospective tenants and value.

Sources

  • Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Act 2024
  • Ministry of Business, Innovation and Employment, Earthquake-prone building and seismic risk management review and Proposed changes to the earthquake-prone building (EPB) system
  • Beehive.govt.nz, Earthquake-prone building system refocused
  • Building.govt.nz, How the earthquake-prone building system works
  • Building Act 2004
  • Rider Levett Bucknall, New Zealand Trends in Property and Construction Forecast, Report 114

Refresh schedule: this article covers legislation in progress and must be reviewed on introduction, amendment and passage of the Building (Earthquake-prone Building System Reform) Amendment Bill.

This article is general information and not legal or engineering advice. Seismic obligations depend on your specific building, its location and its use. Obtain advice from a suitably qualified structural engineer and legal adviser.