Wellington, September 19, 2018
When buying a home, it is easy to focus on the renovated kitchen or the north-facing deck, but it is important to consider how the property might stand up to a natural disaster.
For many New Zealanders, the first thing that comes to mind is an earthquake.
As Kiwis, we know all too well how much damage a shake can do to our homes. However, there are plenty of other hazards mother nature may throw at us, including tsunamis, volcanic eruptions and hydrothermal activity such as hydrothermal eruptions, ground subsidence and gas emissions.
Other calamities include a fire, flood, storm damage or even a tornado.
When working to identify natural hazards that might affect a home, the best place to start is to get the property inspected by an appropriately qualified professional.
This will give buyers an idea of any damage from past natural events.
Check that they will consider how chimneys, foundations and retaining walls might perform or be affected by natural hazards. Ask them to comment on the maintenance of the house.
The Right to question
If the home is being sold by a licensed real estate salesperson, buyers can ask them anything they want to know about the property.
The agent cannot withhold any information they know.
The local Council is another great resource, as they should have information about any hazards present at the address.
Some of this information may be available free of charge, but it can be a good idea to pay for a land information memorandum (LIM) report, which will provide buyers with a fuller picture of that property.
Know property history
It is also important to find out about the history of the home, including whether it has been the subject of an EQC [Earthquake Commission] claim and whether that claim has been resolved.
Natural disasters do happen, so to be protected against damage or loss, it is important to insure a property.
Buyers should call around different insurers to get quotes for the house they’re considering.
Banks and other lenders usually require the place to be insured from settlement date, so an ‘uninsurable’ house can cause trouble.
Buyers should also understand how the risks that affect a home might change over time.
For example, insurance companies are reassessing how they cover coastal or clifftop properties due to the growing risk of environmental damage. This means that the cost of premiums may increase, exclusions may be added, or insurance cover may be withdrawn for some properties as the risk changes.
When drawing up a pros and cons list for a property, consider features that make a home safer or more at risk during a natural event.
For example, a roof that is lightweight and well secured will stand up better in a storm.
A tall, unbraced chimney made from brick or concrete may suffer damage or collapse in a quake.
Identifying potential risks should be part of the due diligence process before making an offer, and house hunters can find a list of natural hazards to look out for on the Real Estate Authority’s independent website for buyers and sellers, settled.govt.nz.
Of course, this does not cover everything that may be relevant to a particular buyer or property, which is why it’s important to get advice from a lawyer or conveyancer, or other registered professionals, before signing on the dotted line.
Kevin Lampen-Smith is Chief Executive of the Wellington-based Real Estate Authority.