December 2024

In New Zealand, we deal with natural hazards like earthquakes, floods, and landslides regularly. With climate change ramping up these risks, it’s becoming increasingly important to understand how they can impact our homes and insurance.

If you’ve recently applied for a building consent, your local Council may have flagged your property as being at risk of one or more natural hazards. In this case, they might require a section 72 of the Building Act 2004 ‘Natural Hazard Notice’ to be registered on your title as a condition of issuing building consent.

What is a section 72 notice?

This is a heads-up to anyone interested in your property such as future buyers, lenders, and insurers letting them know that the land is at risk of a natural hazard. It also protects the Council from liability for granting building consent in these circumstances.

How does this affect you?

From 1 July 2024, the new Natural Hazards Insurance Act 2023 has replaced the old Earthquake Commission Act 1993. Here’s what that means for you:

• If your property has a section 72 notice and the hazard identified in that notice causes damage to your property, the Natural Hazards Commission can decline your compensation claim, either fully or partially.
• This could mean missing out on up to $300,000 plus GST to repair, rebuild or reinstate your dwelling.
• Your private insurer will now have to decide how to cover (or not cover) claims related to these known risks.
• Future buyers may think twice about buying your home.

Can you get the notice removed?

Good news! If you have made or will make ‘adequate provision’ to protect the land and building work from any identified natural hazard, section 72 should not apply to your building consent. If this notice has already been registered, you might be eligible to have this removed.

What should you do next?

If you’ve got a section 72 notice on your title or your Council is insisting on one and you think this shouldn’t apply, it’s time to reach out to your lawyer. They can help you understand your options and what steps to take next.