Earthquake rules to cost millions

A property investment group is warning that New Zealand building owners could face bills of hundreds of thousands, if not millions, of dollars to bring their buildings up to earthquake standards.

The strengthening will be necessary under the new Building Act, passed in 2004 and progressively coming into force, and will affect buildings throughout New Zealand.

Buildings built since 1965 should be unaffected. Commercial buildings and multi-storey residential properties built before then will need to be assessed.

Hybrid Group, a property investment company, yesterday warned there would be a hefty bill to bring the buildings up to the specifications.

"With estimated strengthening costs of up to $100,000 per storey, the overall costs to pre-1965 multi-storey building owners across New Zealand could be as high as $500 million or more," it said.

It also warned against buying a pre-1965 commercial property, or a residential property with two or more storeys and three or more house units. Banks might be unwilling to lend money on an affected building - even to complete strengthening work.

"We believe that there are 7360 buildings that will need to be assessed," Wellington Mayor Kerry Prendergast said.

Of those, some would be found to comply with the new rules but about 4500 would need further assessment by engineers. Ms Prendergast said Wellington City Council expected about half of those 4500 would need some strengthening.

"There may be some that are so bad they need to be demolished but building owners always have the option of doing what is a very expensive process and that is earthquake strengthening as part of refurbishment."

Ms Prendergast said the council assessment costs would have to be borne by ratepayers.

Under the Building Act, councils have until May to establish a policy on earthquake-prone buildings but building owners would get time to complete the necessary work.

Faultline bills
* Wellington, much of which sits squarely on a faultline, will need to spend $1 million assessing which of its buildings are earthquake risks.
* The results could see some buildings pulled down and more than 2000 requiring strengthening work.
* Building owners could face costs running into millions of dollars.

- NZPA