Commercial real estate guidance
Commercial real estate, including letting and leasing, are specialised fields, and it’s important to understand the pitfalls and challenges.
Topics covered on this page
Change of use buildings
A change of use is where the compliance requirements relating to the new use of a building would be in addition to what is required under the Building Act 2004(external link).
There are many examples of changes of use in the commercial and industrial sector. For example, if a building that was designed as a warehouse is converted for use as a restaurant, this is a change of use.
The areas of major concern in cases of change of use are:
- the structural performance of the building
- ensuring means of escape from fire and the fire rating performance
- protection of other property
- access and facilities for people with disabilities, if these are not already provided
- earthquake strengthening.
Building warrant of fitness (BWOF) and services
Building services include, but are not limited to:
- elevators, escalators and moving walkways
- heating, ventilation and air conditioning
- automatic door systems
- wet or dry riser mains for use by fire services
- automatic fire sprinkler systems
- emergency warning systems for fire or other dangers
- emergency lighting systems and signage
- building maintenance units that provide access to the interior or exterior walls of buildings.
These components are listed on a compliance schedule for the building. Each component on the compliance schedule is subject to an annual building warrant of fitness (BWOF), which must be completed by the building owner or their authorised agent. BWOFs must be publicly displayed on the site.
Before listing a property, you should check that the BWOF is current and obtain a copy for your files. If the BWOF is not current, you must alert any prospective purchasers and recommend that they take appropriate advice before proceeding.
Local authority licensing issues
Many types of business are subject to local authority (or other) licensing issues. These can relate to:
- premises for food preparation, handling and service
- personal services, for example, hair salons, tattoo parlours and massage therapists
- recreation services, for example, public swimming pools, saunas and camping grounds.
You must check whether the premises have the necessary licences and the duration of any existing licences. It’s also important to check the conditions under which such licences may be transferred to a purchaser and any restrictions that may apply.
What you need to know about seismic factors
Owners of commercial and industrial property and multi-storey multi-unit buildings throughout the country are often required by lenders and insurers to demonstrate that the building is not earthquake-prone.
Buildings constructed before 1976 that are for commercial use, publicly accessible, multi-storey, or multi-unit residential complexes, may be assessed under the relevant council’s earthquake-prone buildings policy. You will need to check with the relevant local council for these requirements.
Buildings that are identified as earthquake-prone, will be recorded on the local council’s record of that property and will be included in any land information memorandum (LIM) or project information memorandum (PIM).
Owners who have a detailed engineering evaluation (DEE) or detailed seismic assessment (DSA) should be able to provide this documentation for you, and prospective purchasers and tenants to review. The DEE or DSA should include the percentage of the new building standard (NBS) that the building meets and a basic understanding of any specific issues. You should recommend that your prospective purchasers and tenants seek expert or legal advice to understand these documents.