Section 74 notices are something we’ve been hearing more about in the news lately. That’s because they apply to properties affected by natural hazards, and these have been in the spotlight in the aftermath of severe storm events earlier this year.
So, what is a Section 74 notice and how might it affect your property? Read on for some answers to frequently asked questions that will help you better understand this important piece of Building Act legislation.
What is a Section 74 notice?
A Section 74 notice is something that might be applied during the building consent process to properties in New Zealand affected by natural hazards.
As set out under Section 72 of the Building Act 2004 (or its predecessors, s 641A of the Local Government Act 1974, and s36 of the Building Act 1991), territory authorities like Auckland Council must grant building consents on land which is subject or is likely to be subject to one or more natural hazards, so long as the building work that is proposed is protected from the effects of the natural hazard concerned. The land intimately connected with that building work must also be unlikely to be compromised by the natural hazard that in turn could compromise the building work.
The building work must also be unlikely to create a new hazard on any land, and must not make the existing natural hazard worse.
To be able to grant a building consent, the council may also have to consider applications for waivers or modifications of the building code the building work may not comply with.
In these circumstances, the consent can be granted but with the requirement that a section 74 notice is registered on the Record of Title (what used to be called a Certificate of Title). This process only applies when a building consent application is made for a new building or a major alteration to an existing building.
If the building or building work are exempt under Schedule 1 of the Building Act 2004, the section 74 notice will not apply.
What is the purpose of a Section 74 notice?
A section 74 notice allows property owners to build on land subject to natural hazards while also providing a level of protection to both the consenting authority and future prospective buyers. The two key purposes of the notice are to:
- Alert subsequent buyers to the presence of a natural hazard on the property
- Protect councils from legal action related to the exercise of the owner’s right to build on the land when it is affected by natural hazards.
How are Section 74 notices applied? Could I get one on my property?
Section 74 notices can only be applied as part of a building consent process. Before a building consent is granted that requires the registration of a section 74 notice, the council requires an owner to sign an Acknowledgement of Risk to confirm they have consulted with legal and technical experts and understand the nature of the condition and legal implications.
Once a section 74 notice has been registered, it stays permanently on the property’s Record of Title. The presence of a Section 74 Notice is something a lawyer or conveyancer should flag with any prospective buyer as part of the property purchasing process.
Records of Title for any property can also be downloaded for a small fee from the LINZ website.
What is considered a natural hazard?
The Building Act defines a natural hazard as land subjected to:
- erosion (including coastal erosion, bank erosion, and sheet erosion)
- falling debris (including soil, rock, snow, and ice)
- subsidence
- inundation (including flooding, overland flow, storm surge, tidal effects and ponding)
- slippage.
Not every possible natural hazard that might exist or have the potential to occur on your land, will be severe enough to be classified as a natural hazard under the Building Act, e.g. not all flooding is deep enough, fast enough, or long-lasting enough to meet that criteria.
Independent evidence that accompanies the building consent may support that position, and if the council agrees it can process and grant the building consent with none of the provisions for natural hazards applying, i.e. no notice need to be applied to your title.
Hazards such as tsunamis or earthquakes are not regarded as natural hazards under the Building Act.
How many properties in Auckland are affected by Section 74 notices?
In August 2023, LINZ estimated that there were 4089 property titles in the Auckland Council area with Section 74 notices applied. That’s less than 1 per cent of the total properties in the region.
Can I get a section 74 notice removed from my property?
It is possible to have a Section 74 notice removed only if the council is satisfied that the hazard has been eliminated or mitigated through property works or local infrastructure changes. By law, the notice cannot be removed for insurance purposes or any other similar reason.
Can I still get insurance or finance if I have a section 74 notice on my property?
How a Section 74 notice might affect your insurance policy or ability to secure finance is something you should discuss with your lawyer, finance provider and insurer.
There may also be consequences for your building policy related to any other conditions the council must apply to the building consent that relate to waivers or modifications of the building code.
The Earthquake Commission (ECQ) also provides information on their website about Section 74 notices and how these may impact EQC insurance claims.
Does a property’s category (from the risk categorisation process following the 2023 severe weather events) determine whether a Section 74 notice is issued?
No, a property’s category will not determine where a Section 74 notice is necessary. A Section 74 notice is only issued when undertaking building work and is determined by the location and nature of the natural hazard and the impact of the proposed building work on that natural hazard.
The categorisation process does not affect the council’s decision making under the Building Act (the Act under which Section 74 notices are issued).
Will the council flag if a property is likely to have a Section 74 notice issued so a homeowner knows in advance of considering undertaking consented works?
No, but your designer and/or your engineer should be able to give you early advice on the likely impact of your property’s natural hazards on the proposed building work.
Indicative information on certain natural hazards is visible on the Auckland Council GIS tool. You may also apply for a Project Information Memorandum (PIM) from the council.
The PIM would also identify potential natural hazards as well as other key considerations that the Council is aware of that might affect your project.
Any information that there might be a natural hazard on your property should be investigated by your own independent specialists and advisors before you apply for a building consent.
A Section 74 notice is determined by the location and nature of the natural hazard and the impact of the natural hazard on the proposed building work and on the land intimately connected with that, and vice versa, the possible effects of the building work on that natural hazard.
Find more information on building on land subject to natural hazards on our website. MBIE has published helpful guidance for homeowners following the 2023 severe weather events.
