Facts about the IEP Report every apartment buyer should know
An IEP report and an earthquake rating are basically the same thing.
Something that’s very prominent regarding character buildings and because of what happened down in Christchurch. An IEP rating which is an Initial Evaluation Procedure and is what comes out as a figure or gives you a percentage of what is called a New Building Standard.
An IEP rating comes out with a percentage which is compared against what the standard of a new building that is built today. For example, if it comes out at 75%, that means it is as strong as a new building that was built today.
At the moment, the law is at 33% which is the cut off for being a safe building that will be covered by insurance. If you come in at 33% or lower, you are going to have to strengthen your apartment within 15 years. If it is a character apartment you have 25 years. That means you have to be 34% or higher to pass.
From very good sources within the council that it is not going to be changing in Auckland. We can’t promise that, but every single percent it goes up costs the country at least 700 million dollars.
What is an IEP report, and what is an earthquake rating?
Basically, they are the same thing. Good day, it is Andrew Murray here from Apartment Specialists, talking about earthquake ratings. Something that's very prominent at the moment regarding character buildings, and because of what happened down in Christchurch. An IEP rating, which is called as you can see here, I've got one in front of us, which is an Initial Evaluation Procedure. Hence IEP, which is what comes out as a figure, gives you a percentage of what iscalled a New Building Standard.
An IEP rating comes out with a percentage, which is compared against what the standard of a new building that is built today, in regards to earthquakes. For example, if it comes out at 75%, let us say in a building that was built 50 years ago, there is 75%, but it's 75% as strong as a new building that was built today.
I said I would show you one. This one was done by Fraser Thomas Engineers. It was done for a heritage building built in 1917 - The Regency. Obviously done here, which is the Initial Evaluation Procedure, IEP, and they go through and they actually come in and look at how the building was built.
The first IEPs or earthquake ratings are just done off the plans, which are done by the council, which is my brush stroke approach. If you feel that your building has got a higher structural rating than what a council thinks, you can get an external IEP rating by an engineer. That is when they look in more closely, and then often what happens is, that'll often increase - it could decrease, depending what has been done to the building. In this case increase, so they look at the buildings and they give you a history of the building. What it was built out of, when it was done, for what.
In this case, because it was built in 1917, it had various things done to it. It went from a warehouse office space, then an extension on the top, then it was turned into apartments in 1994. When it comes to an IEP rating, Initial Evaluation Procedure that comes out with an earthquake rating, it is really talking about two things: What they call longitude, which is what happens with the movement up and down, and what they call traverse, which is the movement side to side.
What is the rating? What will happen in an earthquake, if the earthquake movement was up and down, what is that rating? Against if the building was built today. What is the rating if the earthquake's moving from side to side? Then each one will have a percentage, and then what happens is, they'll take the lower of the two. And that will be the IEP rating, which is Initial Evaluation Procedure, or what we call the earthquake rating.
If you look down here, so it goes through a lot of stuff, that really you have got to be an engineer to really get into. I can explain some of it, but a lot of it is sort of probably beyond my expertise. Then it comes down to, we have actually come down to the IEP rating. What they have done here, is I think it might be a bit of a typo, but you can see here, you have got the longitude. Which is the up and down, coming at 54, and then the traverse, which is the side to side strength, is 72%. Now take the lower of the two, and it is 55 - I think it is supposed to be 54 there, because generally that's what they take there. But anyway, you get my drift. That is what they come and look at. They look at the IEP, and they got the lower of the two of movements - this way and that way, and that gives you your IEP rating or earthquake procedure rating.
At the moment, the law is at 33% is the cut off. If you come in at 33 or lower, you are going to have to strengthen your apartment within 15 years. If it is a character apartment, you can have 25. That means you have to be 34% or higher to pass. In different parts of the country, that is higher - Wellington and Christchurch, etc. I have got, from very good sources within the council, that it is not going to be changing in Auckland.
I cannot promise that 100%, but to give you an idea, every single percent that goes up - that's 33%. If it goes to 34%, on average, they estimate it to be about $700 million dollars that it's going to cost the country. I've spoken to structural engineers, and they are basically telling me they are 100% sure it is not going to change. Obviously, I cannot say that, because I'm not a structural engineer. But that's what I've heard from the industry, which is great news because I actually own character apartments myself.
Anyway, I hope this helps you understand a little bit more about IEP and earthquake ratings. Obviously flick me an email, [email protected], or off the website, and I'll talk to you soon.