New Amendment Act brings in common sense changes to the Building Act regime

After an emergency such as an earthquake, it is critical that buildings are managed effectively to reduce the risk to people’s wellbeing and safety. Once the immediate danger has passed, the focus shifts to investigating what may have gone wrong in buildings that failed to perform. When managing buildings both during and after an emergency, a balance must be struck between protecting public safety and respecting the rights of building owners and occupiers.

These considerations are at the forefront of the recently enacted Building Amendment Act 2019 (the Act), which amends the Building Act 2004 and received Royal Assent on 17 June 2019. We discuss the two main changes introduced by the Act and the impact the new powers may have on building owners and occupiers.

Improving management of buildings after an emergency

The first change introduced by the Act is the inclusion of provisions aimed at improving the management of buildings after an emergency. These provisions:

a) allow the Minister for Building and Construction (or a local authority with the Minister’s approval) to designate areas for the emergency management of buildings if a state of emergency or transition period is in force;

b) introduce new powers for responsible persons (including local authorities or persons acting under the Minister’s guidance such as a police constable) to manage buildings during and after an emergency event, including entering the site for the purposes of:

1. directing an evacuation;

2. implementing a cordon;

3. putting up notices and signs prohibiting or restricting the use of a building; and

4. carrying out urgent and long-term works to remove or reduce risks;

c) clarify the timing and use of these powers to reflect the extended time-frames that are in reality needed to manage buildings;

d) introduce decision-making requirements where there are heritage buildings involved; and

e) clarify how to recognise personal and property rights.

The extensive powers are balanced against the need to protect the rights of individuals and owners. The Act creates criteria for consultation and includes constraints on officials entering buildings in an emergency to minimise the disruption to owners and occupiers. One of these constraints is the principle that actions should result in minimal restriction of the ability of an owner or occupier to continue to use and occupy property and any restriction of that ability should be for no longer than is reasonably necessary.

Creating new investigative powers

The second change is to create new investigative powers following an emergency event. The Act gives the Ministry of Business, Innovation and Employment (MBIE) powers to investigate significant building failures that either did or could have resulted in serious injury or death.

These powers include:

  1. entering the site;
  2. taking samples and evidence from the site;
  3. requiring information or documents from any person; and
  4. publishing a report detailing their findings.

The chief executive must give written notice of the investigation to the owners and occupiers of the investigation site as soon as reasonably practicable, but this notice does not have to be given before any powers of investigation are exercised.

These sections are aimed at learning from building failure, informing decisions about the performance of functions and duties and the exercise of powers under the Act, and informing decisions about any matters related to building to help prevent other building failures.

Unclear what will amount to a ‘failure’

In order to investigate a building, the chief executive or the Minister needs to reasonably consider that:

  1. any part of the building has failed in any way, in that it has not performed as expected having regard to the enactments of other legal requirements that applied to the design and construction of a building; and
  2. the failure resulted, or could have resulted, in a risk to any individual of serious injury or death.

In practice, it may be difficult to determine if a building has ‘failed’. A building may be apparently structurally sound after a large earthquake, but have potential hidden structural failures that will not be identified until an expert report is conducted. It remains to be seen if the suspicion of a failure is enough to ‘reasonably consider’ that it has failed, or if the chief executive will wait for an expert report determining that the structure has failed.

Relevance to building owners and occupiers

While the Building Amendment Bill was making its way through the House, several Members agreed that these are common-sense amendments. However, owners and occupiers need to be aware that both responsible persons and MBIE have powers immediately after and beyond an emergency event.

If an area has been designated for emergency management, this decision must be publicly notified, meaning owners and occupiers can check to see if the building management powers can be used in their area. Those exercising the powers will be aiming to restrict the use of the buildings as little as possible while also taking actions necessary for safety.

If a building is being investigated for a failure, written notice will be given to owners and occupiers as soon as reasonably practicable. Since the legislation is now in force, it will be interesting to see if MBIE begin to investigate buildings in Wellington and Christchurch to see what went wrong. If the legislation is used in this way, these investigations may be in respect of buildings that are no longer safe to occupy, and potentially may also extend to buildings that have since been repaired.

If you are considering purchasing or leasing a property, the location and type of property may make it important for purchaser due diligence enquiries to extend to ascertaining from the current owners whether they have been notified of an investigation under the new legislation.

Our construction and property teams will be able to assist with any questions about the new legislation, whether you are a current owner or looking to purchase.

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