TelferYoung (Taranaki) Limited

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Taranaki Newsletter - July 2010

20 July 2010

Recent publicity that detailed the concerns of a number of South Taranaki property owners in respect of costs associated with strengthening older earthquake-prone buildings highlights an issue that could face many building owners in the next few years.

Earthquake-Prone Buildings

Section 131 of the Building Act 2004 required territorial authorities to adopt a policy on earthquake-prone, dangerous and unsanitary buildings by 31 May 2006.  The definition of an earthquake-prone building is set out in Section 122 of that Act.

Commercial and industrial buildings within Taranaki comprise a range of types and ages, reflecting steady development over the last 100 years from un-reinforced masonry to modern multi storey steel and concrete buildings.  Add to this building mix the changes to building standards, materials and engineering design and then one begins to understand the size of the task faced by territorial authorities.  Their role is to not only identify "potentially at risk" buildings but also work with the building owners to put in place agreed remedies, to be undertaken within a reasonable timeframe. 

Because of the size of the task most territorial authorities seem to have concentrated their efforts to date on key properties that have post-disaster functions (i.e. hospitals, police stations, etc); buildings that as a whole may contain people in crowds or contents of high value to the community, or pose risks to people in crowds; and buildings with heritage values.  Other properties may have already come to the territorial authority's attention through alterations undertaken by the owners or a change of use (Section 112 and Section 115). 

However, the key words of Section 131 is that territorial authorities are required to adopt a policy.  Property owners should be aware of what their territorial authority's policy contains and also recognise that all policies come up for review.  It is only a matter of time before territorial authorities turn their attention from "key properties" to the balance of their locality's building stock (if they have not already).  When this happens, if you own an "older property" - say pre 1980 - and it fits a certain building profile, then it is likely that you will be contacted and asked to obtain an independent structural assessment of your building.  Where such assessments identify the need for strengthening then, depending upon the level of risk, the territorial authority is likely to attempt to reach agreement with the building owner on the nature and level of work and timeframe. 

To date this pending requirement does not seem to have had a noticeable effect on the value of most properties.  As time moves on investors could become more aware of the potential for future upgrading costs and we are likely to see some discounting of value for "at risk properties".  Obtaining appropriate advice early removes any uncertainty.

Opinions expressed in this newsletter are of a general nature and should be used as a guide only.  TelferYoung should be consulted before acting on this information.

The Impact of GST Changes on Commerical/Residential Developments

If you have recently completed a commercial/residential development with the intention of sale, but are waiting for the market to improve before listing the property, give some thought to the impact of the pending GST increase on your sale price.

With residential property for instance, an increase in GST will not necessarily reflect in an increase in sale price.  Most purchasers are acquiring for their own use and are unable to recover GST.  The price they pay is market related; and unlikely to be influenced by changes in the level of GST the purchaser incurs.  If you have a completed development, but have not yet sold, it may pay to discuss this matter with your financial advisor. 

Changes at TelferYoung

After 36 years in the business, John Larmer has decided to ease back this year, in his words, opting for a mix of work/life balance and time for grandchildren rather than a move into semi retirement. To provide succession and ensure ongoing service to our valued client base, John's lead role in rural valuations will transfer to Fintan McGlinchey.  John will continue to consult to the firm as required, while pursuing his own specialist interest in dispute resolution and litigation support on a national basis.  He will also continue with his local advisory and trustee commitments.  Fintan is now first point of contact for our client's rural valuation requirements. 

Fintan McGlinchey

John commenced practice on his own account at the end of 1973 and then, with his leadership and the assistance of others, expanded and grew the services provided across the whole rural/urban spectrum.  Those who have been clients over this period may remember the transformation to Larmer Coradine & Co; Larmer and Associates; then Larmers, before becoming part of the TelferYoung Group in 2000.  During this period John also developed nationwide recognition as an expert witness, arbitrator, mediator and review valuer.  Positions held have included being President of the New Zealand Institute of Valuers and President of the Arbitrators and Mediators Institute of New Zealand as well as membership of the Valuers Registration Board.

John Larmer

Because of John's standing and expertise, we won't let him retire; however we may consider letting him ease back - a bit!

Back issues of the newsletter can be obtained from TelferYoung (Taranaki) Ltd
143 Powderham Street,
P O Box 713,
New Plymouth,
New Zealand.
email: taranaki@telferyoung.com

+ Mike Myers + Ian Baker + Adam Boon + Fintan McGlinchey + Monique Burr + John Larmer