Contact the council about damaged building

Each week, national law firm Simpson Grierson answers commercial property questions which can be emailed and headed "commercial property problems". This week's question is answered by associate Warren Bangma and law graduate James Varcoe who can be contacted at warren.bangma@simpsongrierson.com and james.varcoe@simpsongrierson.com

Q. My company owns a number of investment properties and one of them is across the street from an industrial unit that was severely damaged by fire about two years ago. This fire-damaged property has been standing empty all this time and has rotten timber from weather damage, as well as broken glass lying around. I would like to sell my property in the near future but I think that its value will be affected by the state of this unit. My question is: Can anything be done to compel the owner to take action?

A. Your local council has powers under the Building Act 2004 and the Resource Management Act 1991 (RMA) to require the owner to undertake remedial works or even demolish the building within a specified time-frame.

The unit across the street from your rental property may be a dangerous or insanitary building under the Building Act. This would apply if the building, in the ordinary course of events, is likely to either cause injury or death to any person in it, or to any person on another property, or damage other property. We understand no one is using the building and that it has been severely damaged, however, further investigation would be required to determine whether it could cause injury, death, or damage on any adjoining properties.

Case law has held that a building can be found to be an insanitary building under the Building Act if the building is in such a state of disrepair that it materially diminishes the comfort of people in the neighbourhood.

In particular, it will be necessary to show that the building is more than just an "eyesore", and has some actual effect on people in the neighbourhood such as yourself. However, depending on how badly damaged the building across the street from you is, it may meet this test. You can complain to your local council about this building and ask that it take action.

But before you do, you should look for the council's policy on insanitary buildings on their website. They must have a policy on dangerous, earthquake-prone, and insanitary buildings under the Building Act. The council's policy will state the approach the council will take on insanitary buildings.

If your local council agrees that the building is insanitary, it may give notice to the owner requiring work to be done to either make the building sanitary or demolish it. The notice must state a timeframe for completion of the work. If the owner of the building does not complete the specified work within that time-frame, then the owner commits an offence under the Building Act carrying a maximum fine of $200,000.

If the owner of a building does not complete the work within the specified time, the council can apply to the District Court for orders enabling the council to undertake the work itself. If the council does undertake the work itself, the owner of the building is liable for the costs.

The council could also issue an abatement notice, or apply to the Environment Court for an enforcement order. An abatement notice or enforcement order can require a person to do anything that is necessary to avoid, remedy, or mitigate any adverse effect on the environment. This can include requiring the owner to take steps to avoid, remedy, or mitigate adverse effects on amenity values caused by a house being in a state of disrepair.

If the council does not want to take action under the Building Act or RMA, you can apply yourself for an enforcement order. Whether an abatement notice or enforcement order will be successful will depend on the terms of the order/notice and the facts of your case.

We suggest that you raise this issue with the council first.

The information contained in Commercial Property is intended to provide general information in summary form current at the time of printing. The contents do not constitute legal advice and should not be relied on as such. Specialist advice should be sought in particular matters.