Questions and answers - Green TC2 (yellow)
When looking to buy land in a new subdivision it is a good idea to consider seeking a written geotechnical report from the developers. Your local council will be able to advise on the need, or not, for a geotechnical report prior to applying for a building consent.
The specialist skills required to compile a geotechnical report can be provided by engineering consultants.
Many geotechnical engineers can be found in the Yellow Pages, but make sure that you check that the engineer preparing the report is a registered Chartered Professional Engineer.
You can check the register at http://www.ipenz.org.nz/ipenz/finding/cpeng/search/search.cfm
You need to seek professional advice on what, if any, extra work needs to be carried out to ensure the land is suitable for building and the house foundations are in compliance with the requirements of the Building Code. This may incur extra costs and you need to make sure that you are aware of the full amount of these costs, and discuss and agree where those costs fall, before entering into a contract.
Before signing up to buy land or a building you could discuss and agree that the contract is subject to a satisfactory geotechnical report / investigation.
Costs will vary depending on the land and the type of engineering investigations required. We recommend that you seek quotations before deciding which engineer to use.
We recommend it. We suggest you also check whether you can get any insurance without a geotechnical report. The requirement for a geotechnical report for a building site is international best practice. There are many areas in New Zealand where, because of the nature of the land, councils require home builders seek a geotechnical report before they build a house.
CERA has been working with the Department of Building and Housing to identify land that is likely to become available in the next three to five years. That information is being analysed and we will be making information available in the months ahead.
Property developers also seem to be advertising in local papers regularly, so we would encourage you to also review that information. You are, however, advised not to enter into any contract to buy land without discussing it with your lawyer or other adviser.
Properties in the green zone will have to be rebuilt to the Department of Building and Housing guidelines, which are currently being revised. If there is some land damage or liquefaction on your property, this can be dealt with through the usual EQC processes and on an individual basis. There will be some isolated exceptions in the green zone where further geotechnical assessment may be required. This will be dealt with by EQC and your private insurance company under normal insurance processes.
What do I need to do to ensure my repairs meet Building Code requirements?
Homeowners whose land is in TC2 can get on with rebuilding their homes with confidence. The only further site-specific geotechnical investigation required is the simple shallow soil strength testing which is standard for all homes.
If your home is in TC2 and you are rebuilding foundations the Department of Building and Housing recommends that you use:
- Standard (NZS3604) piled foundations for houses that:
- Are built of lightweight materials (not masonry or brick veneer). For example tin, not tiled, roofs and lightweight cladding such as weatherboards; and
- Have timber floors instead of concrete floors
- Or enhanced slabs (more robust foundations) such as those outlined in the Department of Building and Housing’s December 2010 Guidance on house repairs and reconstruction following the Canterbury earthquake.
Repairs to foundations
If you are carrying out repairs to foundations or other areas of you home these should be carried out in accordance with the Department of Building and Housing’s 2010 Guidance on house repairs and reconstruction following the Canterbury earthquake
The Guidance on house repairs and reconstruction following the Canterbury earthquake document is being updated. A summary of the update, the 2010 guidance and other documents are available on the MBIE, Building and Housing Group website.
Talk to your builder or project management office about the requirements of this guidance and the Building Code.
How much are repairs to foundations likely to cost?
The average additional cost for homeowners in Technical Category 2 with foundations that need to be repaired or rebuilt due to earthquake damage is expected to be around $5,000. However, depending on site circumstances costs may range from no additional cost to around $10,000.
What if my house wasn’t damaged in the earthquakes and is in TC2?
The technical categories only apply to houses that require their foundations to be repaired or rebuilt due to damage from the earthquakes. If your house was not damaged by the earthquakes then you will not need to upgrade your foundations.
Where can I find more information?
More information is available on the MBIE, Building and Housing Group website.
The categories, and the areas they apply to, are based on ground conditions, including the susceptibility to future liquefaction, not just the extent of land and building damage caused by the recent earthquakes.
Not all properties in TC3 will require complex engineered foundation design. Site specific geotechnical investigation will help your designer identify the best foundation solution for the property.
Insurers will generally only pay for a new foundation if the old foundation was damaged.
Insurance policies vary between different insurers and in many cases with the same insurer. Generally where foundations have been damaged or where the damage is so bad the insurer is liable to replace a house, the insurer will have to work with the standards that apply at the time the repair or rebuild is done. The insurance industry, EQC, Councils and Government are working closely together to give greater clarity to affected homeowners.
In deciding what needs to be done for foundations, insurers will also work with EQC to understand the condition of your land and what, if any, work EQC will do to repair any damage to that land.
EQC covers damage to a building up to the limit of $100,000 + GST per event, to bring it back to the state it was in before the damage occurred. For most Canterbury houses, this is prior to 4 September 2010. EQC also covers damage to the land under and within eight meters of the building up to the value of the minimum lot size before the event in the relevant area.
To avoid confusion, we need to be clear that TC categories apply only to foundation systems, not land remediation.
EQC is responsible for remediating the land under a house and within eight metres of the buildings. Land within 60 metres of the house which forms the main accessway is also covered.
EQC advises it only looks to return the land to the condition it was in before the earthquake.
In general, EQC will either pay for the repairs to any land damage caused by the Canterbury earthquakes, or if repair is not possible or not economic, EQC will pay the landowner the maximum insured value of the land which is calculated by reference to the value of the minimum lot size prior to the earthquake in the area you live in.
For example if you have:
- Minor land damage – EQC may settle your claim directly with you.
- House damage and minor land damage – if your house repair is being managed by EQC through Fletcher Construction then land repairs will be managed as part of the whole property rebuild.
- Opted out of Fletcher repair process – EQC will work with you to determine who manages the repairs to your land.
This will depend on your individual insurance policy. You should talk to your insurer about what your policy will cover.
Properties in TC1 and TC2 areas can build according to the recently released Department of Building and Housing guidelines, while properties classified TC3 will require site-specific geotechnical investigations and specific engineering foundation designs.
EQC covers damage to a building up to the limit of $100,000 + GST per event, to bring it back to the state it was in prior to the event.
If new or repaired foundations are required EQC has advised it will cover this cost under its dwelling cover but only up to its $100,000 + GST per event limit for dwelling claims.
In such cases EQC will pay out this maximum amount to the homeowner and mortgagee. It is then up to the owner to work with their insurer to resolve the claim.
For repairs being managed through EQC’s Fletcher EQR programme, land repairs will be managed as part of the overall repair programme on each property, and the timeframe for land repairs is essentially the same as for other repairs. EQC and Fletcher EQR hope to make an announcement on specific timeframes soon, but this is a project on a very large scale, and it could be several years before all work is completed.
EQC advises that it is highly unlikely that land zoned green will be in such a state that it cannot be restored to pre-earthquake condition economically, however this will depend on the nature and extent of damage to the land.
If EQC has paid out its maximum land payment (generally referred to as the value of the minimum lot size in the relevant area) repairs to the house will be a matter for the homeowner and insurer to decide.
If your property is in a TC3 area, site specific geotechnical investigation and specific engineering design will identify the best foundation solution for your property.
Whether the land has to be raised may depend on the flood risk in your area as the Building Code requires that the floor level of the house be sufficiently high so that surface water from a one in 50 year event does not enter the building. If there is a flood risk and it is a result of the earthquake, EQC will consider this when determining its liability for land damage.
The land in the residential red zone is unlikely to be suitable for continued residential occupation for a considerable period of time. It generally suffers from thin crust issues and/or lateral spreading which makes the land too weak or unstable to support residential dwellings, without major area wide land remediation which would take years to design and implement and involve massive costs and disruption. This means permanent repairs to the infrastructure in these areas can also not proceed at this time.
While there is a risk of liquefaction-related land damage for properties in TC3 from any future earthquakes, homes in this category can be rebuilt and repaired on an individual basis providing the foundations are specifically designed to meet the land conditions.
While there is a risk of liquefaction-related land damage for properties in TC3 from any future earthquakes, homes in this category can be rebuilt and repaired on an individual basis providing the foundations are specifically designed to meet the land conditions. If rebuild or repair to the foundations is not required, the technical category will only apply if work involving foundations is done on those homes for other reasons (such as renovations).
If your insurer deems that your house is a rebuild they will generally pay for its demolition. This will depend on your specific insurance policy.
EQC hopes to make an announcement on timeframes by the end of 2012, once the last assessments are complete.
Insurance companies are working hard to ensure that they are also able to give customers certainty going forward.
With the release of the technical land categories for flat, green zoned land, insurers can now have more certainty of the standards required so they can advance their assessment process. Councils also have a good basis on which to approve building consents.
No. Properties have been zoned green because the best advice is that there are options available for these properties to be repaired or rebuilt.
The EQC and insurance process is intended, where possible, to return properties to the condition they were in before the earthquakes. There is no other compensation available to account for loss of property value as a result of the earthquake.
Since the first earthquake on 4 September 2010 there has been extensive scientific and geotechnical investigation and research undertaken by a range of experts to identify land issues and ways to reduce the risk of injury to people and damage to homes in any future earthquakes. Each significant aftershock has provided new information.
The technical categories, and the areas they apply to, are based on ground conditions, including the susceptibility to future liquefaction, and the extent of land and building damage caused by the recent earthquakes. The classification of areas has been undertaken on an area-wide basis.
Geotechnical engineers may recommend that a TC2 type foundation is able to be used for many of the properties in TC3 areas. The appropriateness of this will only be able to be identified once the individual geotechnical assessment is undertaken. It has not been possible in the time since 13 June and finalisation of the foundation guidelines to complete individual land assessments, and given the area-wide nature of the decision made by the Government it would be incorrect to assume that individual geotech assessment would have altered those decisions.
The DBH report is just one component of the information required to begin repairs in the TC3 areas.
EQC advises that if it has not yet assessed your land and determined how the damage to your land can be repaired, it is recommended you wait until that happens. EQC is on track to complete land assessments before Christmas. This land assessment is undertaken by a geotech engineer for land claims settlement purposes.
Your insurer or the Fletcher repair team are responsible for repair/rebuilding of your damaged house. If geotechnical design work is necessary for this work then this is undertaken by your insurer or Fletchers. They will organise for another geotech engineer to assess your property to make recommendations and provide a report that will be used by structural engineers for designing foundations.
DBH's foundation report will provide information on possible foundations to meet the TC3 category. However, homeowners can proceed with foundation repairs now if their insurance company agrees.
This will depend on the level of earthquake damage your property sustained in the earthquakes.
EQC provides cover for the first $100,000 + GST per event of damage to your home ('the EQC cap').
If the damage to your house is less than the EQC cap you'll be referred to the Fletcher EQR repair programme.
If the damage to your house exceeds the EQC cap you'll work with your private insurer and EQC in relation to the house, plus EQC relative to land damage.
EQC and/or your insurer will be in touch about which option applies to your property.
Land repairs are EQC's responsibility up to the terms provided under the EQC legislation. They are likely to be done as part of the total programme of repair to your property. If your house repair is being managed by your insurer then the land repair may be managed by EQC or your insurer on behalf of EQC.
If your land damage is minor, you may have the option of managing the repairs yourself.
If the necessary repairs to your land exceed EQC's maximum liability for land damage EQC will cash settle your land claim with you, for the amount of EQC's maximum liability. You will still own the land and you will then work with your insurer to decide what course of action to take with respect to the repair or rebuilding of your house.
Just because the cost of repairing the land exceeds the amount of EQC's cover, does not necessarily mean the land cannot be built on.
Most insurance policies only apply to the damaged parts. How your foundation needs to be repaired or replaced will be determined by a structural engineer on a case-by-case basis. Insurers are working with the Councils to agree on the details around this aspect of repair work.
If the cost to repair damage to your home is over the EQC cap, you will work with your insurance company and in many cases the company will meet any additional costs of compliance. If the cost to repair damage is under the EQC cap, EQC will cover the costs of compliance.
There are many factors that influence value, including foundation requirements that reflect what is now known about some land in Christchurch. If there are material changes in value not offset by new building solutions those changes will be captured as part of the regular updating of rating valuations which councils use to set rates.
Who pays for consents is up to the individual, EQC and the private insurer.
At this stage most insurance companies advise that as long as the property was compliant with the Building Code at the time it was built, cover will continue to be available to the homeowner. However, it is not possible to predict the terms on which insurance will be available in the future.
At this stage no, however there are risk assessments carried out annually on everything an insurance company insures so there is a possibility that this may be the case in the future. Insurance companies advise that they are still reviewing the full implications of the technical categories.
This has been done elsewhere in New Zealand especially in relation to landslips. CERA is considering if there are any other things government can do to help this process.
In some cases, for example, neighbours working together may be able to pool their resources to achieve a better remediation solution than working individually, though this would depend on the particular circumstances.
Both of these answers are correct. The site specific geotech investigation will help your designer/engineer identify the right foundation solution for your individual property.
DBH is currently testing other innovative foundation systems that have the potential to offer cost effective solutions for TC3. The results of these tests will not change the requirement for site specific geotechnical investigation and specific engineering foundation design in TC3.
If your section or those of your immediate neighbours have suffered obvious land damage, it is recommended you wait for the outcome of the EQC land assessments before progressing your site specific geotech investigation.
If you are on TC3 land with undamaged foundations, you do not need a geotech report to continue the repair process.
Land in the green zone has been divided into three technical categories. These categories describe how the land is expected to perform in future earthquakes.
Technical category 1 (TC1) - grey
Future land damage from liquefaction is unlikely. You can use standard foundations for concrete slabs or timber floors. Foundation requirements changed in 2011 and information is available on the MBIE, Building and Housing Group website.
Technical category 2 (TC2) - yellow
Minor to moderate land damage from liquefaction is possible in future significant earthquakes.
You can use standard timber piled foundations for houses with lightweight cladding and roofing and suspended timber floors or enhanced concrete foundations – i.e. more robust floor slabs that better tie the structure together as outlined in the Department of Building and Housing 2010 Guidance on house repairs and reconstruction following the Canterbury earthquake. More information is available on the on the MBIE, Building and Housing Group website.
Technical category 3 (TC3) - blue
Moderate to significant land damage from liquefaction is possible in future significant earthquakes. Site-specific geotechnical investigation and specific engineering foundation design is required.