How to raise your apartment's earthquake rating?
The earthquake rating is based around an IEP assessment by the council which are done off the plans, not looking at the actual building. This means they are often not accurate.
As a Body Corporate you can potentially change your rating which will therefore raise the value of your property.
This can be done by employing a private party to conduct an IEP. This does come at a cost of around $2000 but it means the engineer comes and physically looks at the building and makes a far more accurate assessment. In some cases, it does come out higher, this works in your favour in terms of values of the property.
The final step you can take, does come at a considerable cost but it is where an engineer takes a further look and looks at the materials of the building by drilling and a number of other procedures to see how strong the building is. This is not usually necessary but may be in certain situations.
Good day! Andrew Murray from the Apartment Specialists, on raising your earthquake rating. Now you've probably seen in the papers, quite a bit of publicity around character apartments and how the earthquake ratings are affecting their values, and a lot of owners are scared around this.
There's a number of buildings around the CBD - I don't really want to mention them - that are going below that 33 per cent threshold, where they have to be restrengthened. That's a very expensive exercise. One example is obviously St James. It is at 28 percent. It is a stunning building, and to get those earthquake ratings up means a knock to the values. Currently, they're being sold below their value because of this. So I wanted to talk to you today about what I did in my own building, and how I raised the earthquake rating in my own building.
Now I'm a chairman of the Regency Apartments. Obviously, I work with the owners' committee here, and I meet with the Body Corporate secretary here, so that's Paula Beaton from BCA, so I can't take the credit myself.
But basically what we did is, earthquake ratings are based around what's called an IEP, which is a Initial Evaluation Procedure, and that's a brushstroke approach done by the council, where they don't actually inspect the buildings individually. They look at the original plans. And these are often incorrect.
So what they do is they look at these plans and give a bit of an idea. And they put a rating on it. These ratings are done in a longitude and latitude way. So they'll have a rating, let's say we got the Regency for example. It was around about 66 percent longitude. So if there's an earthquake, going up and down, it had a 66 per cent strength, which is great.
But then the latitude, because it's old, and it's where these character apartments often fall - so as in not fall, but fall down. So the earthquake rating was only 35 per cent. Now so that means the IEP rating, or earthquake rating, falls on the lower of two. So it came out as 35.
Now yes, that just scraped through past that 34 per cent mark, which is, you know, the pass mark. But that's still quite close so it does affect a purchaser's opinions on what they'll pay for the apartment .So what we did, is we looked at getting another IEP rating. That's when you get an engineer in. It will costs you a couple of thousand dollars. They'll come in and actually assess your building, and actually find out what the IEP rating really is.
So what we did is, we got another engineer in, an independent engineer, to do an inspection of the building. An inspection of how it was constructed, and actually really really look into closely the strength of that building. And we had a very positive report that came out, showing that the plans that were in the council did not actually reflect how strong the building was. And that came out at 55 per cent, which is fantastic, because that lifts the ratings. And it lifts the value of the building. Being an owner, it was fantastic.
So when you're dealing with a building, and if you are looking at purchasing a building or you own in a building which has an IEP rating or earthquake rating which is low, talk to your body corporate. Talk to your owner's committee. Talk to your body corporate secretary and have a chat about getting another IEP opinion.
So get another engineer, to do an independent report, and yes it could come back at the same amount, but it also could come back a lot higher. So before you start thinking, Oh I'm stuck with an apartment with a bad earthquake rating, make sure you go down that avenue.
Now, if that fails, then you can go into-- and you still believe that it could be stronger, you then go into a DEE, which's is a detailed evaluation. That is done by an engineer and that's very expensive. So that's when they actually go into, they actually drill holes and look at what kind of steel was involved and all that kind of thing.
A recent one was done in the Wiltshire, which it came in where the earthquake rating was very very low, so, I think by memory, don't quote me on this, about 23 per cent, and then they got a DEE, so a detailed evaluation, and that came in, by memory, at around 83 per cent. So it shows you that these earthquake ratings aren't set in stone, and the initial ones that are given by the council are just a brushstroke approach. There are options here to see if you can lift that, and just lift the values of your apartments, with the apartment you own, and the value of the whole building, basically.
So feel free to give me a ring on 021 424892. 021 424892, or [email protected], if this concerns you and you'd like to have a conversation about it, because yeah, it's all not lost and there's some hope out there.
So anyway, hope that helps.
Cheers, thank you.