Non-compliant mezzanine

[jcmk]

We signed up a new tenant for a warehouse 2.5 years ago. There was a non-compliant mezzanine in the warehouse. The leasing agent stated that the tenant did not require the mezzanine as they wanted to remove offices in the warehouse and in so doing removed 2/3 of the mezzanine. The mezzanine should have been written out of the lease in the 1st Schedule as we have since discovered.

The tenant submitted a plan with very little information on what they actually intended to do in the warehouse, and in particular we were not aware that they intended to relocate the stairs and continue to use the remaining 1/3 of mezzanine.

At the time of the first rent review the tenant is refusing to look at new rent - stating the fact that the mezzanine is not compliant. They informed the council and we have been issued with a Notice to Fix. Our lawyer is concerned about the Notice to Fix and trying to have any discussion with the tenant regarding rent abatement doesn't work.

However as we inform the lawyer, the plan submitted by the tenant does not reflect what structural work they actually undertook in the warehouse. Can we demand that the tenant return the warehouse to how shown in the plan, in which case access to the remaining mezzanine would not be possible, as no stairs were shown.

[John the builder]

what does the NTF allege

if unconsented building work under s40 did you build the mezzanine?

[Davo36]

Yeah I would think you can do that. But what does your lawyer say about it?

[jcmk]

The NTF - states either make compliant or remove.

The previous owner/tenant put the "mezzanine" in place. We inherited the building - and am slowly learning the hurdles of commercial building ownership.

The main problem is that as the tenant supposedly stated that they didn't require the mezzanine, and we assumed that they knew that they mezzanine was not compliant. The tenant is a company in the building industry and states on their website that they are conversant with the NZ Building Code.

As stated above - we were not aware that the tenant that the tenant intended to relocate the stairs to give them continued use of the remaining mezzanine area. If they had clearly indicated this on the plan that they submitted during the agreement discussions -we would have then made sure that they were aware that the mezzanine was not compliant.

I was wanting thoughts/opinions on asking the tenant to remove the stairs from their present location, as this had not been specified on the plans and description of the works that they intended to undertake.

[jcmk]

Yes - you think that we can ask that the stairs be removed from their current position?

Our tenant is very difficult to work with. Since they have informed us that the mezzanine was not compliant, we have asked repeatedly that they block access to the area and they flatly refuse.

In May - our lawyer advised the tenants lawyer that we needed access to the building to reinstate the warehouse area as shown in the plans that the tenant submitted. A date was set and the tenant stated that they were happy as long as we paid for all of the costs involved - as some of the work that would have needed to be done was due to the poor workmanship of the tenant - only to have the contractor told to leave the building when they asked the tenant to remove their goods from the area. So we were basically back to square one.

The plan that the tenant submitted does not show the mezzanine area or the stairs -ie plans from when the building was originally constructed. To me the tenant did not do "due diligence" in either asking for updated plans or request a LIM report

[John the builder]

The previous owner/tenant put the "mezzanine" in place. We inherited the building - and am slowly learning the hurdles of commercial building ownership.

https://www.building.govt.nz/assets/Uploads/resolving-problems/determinations/2014/2014-035.pdf

the important bit is at 5.3

a current owner cannot be responsible for work done by a previous owner because they are not carrying out work!

there are other decisions that also say they cant make you remove it unless dangerous or insanitary

what area are you in?

[jcmk]

Hi - thanks for the link and have read the determination.

Slightly different as in that case the new house owner was going to do alterations that presumably rectify the non-consented areas.

Our tenant is "irrational" as our lawyer states. At the time that they first complained about the mezzanine, they were fully aware that they had built a non-consented conservatory on the property. The council issued them a NTF at the same time as ours was issued.

How do you/they decide if its dangerous? The manner in which the tenant is using it is dangerous, as they have product and equipment strewn all over the floor. eg. have had contactors on site to get estimates on making the area compliant and they state that they can't give accurate quotes as they can't see the floor and walls properly.

Building in ChCH.

[John the builder]

JCMK


Regards the det;
no not different

the new owners intentions were irrelevant the fact is that non consented works do not need to be made compliant unless dangerous or insanitary.

its true that the new owner were plannning to design it out anyway but that doesnt change councils power to act, they dont have one!

Your tenant is gold digging and looking for refund of rent die to unlawful tenancy. This makes pushing back on council all the more important.

Dangerous is defined in the building act and should mean imminent collapse or likelihood of injury not just risk in normal use.

Get your lawyer to send the determination to council and ask them why the circumstances are different and get them justify their position, Usually council will sidestep the issue which is a sure sign they are on poor grounds.

[jcmk]

Have read section 121 of building act - area is not insanitary, but is it dangerous????

Another thought - the current tenant when viewing the building would have seen the stairs giving access to the mezzanine area over offices that extended out into the warehouse. The tenant required permission for one of these offices to be demolished, for the building to "work" for them. The leasing agent provided the tenant with a plan of the area of warehouse on which they indicated which office they were going to demolish. Both the leasing agent and the tenant would have been aware that the plan provided was not correct - as it did not show the stairs giving access to the mezzanine.

Could it be compared to me/you viewing a house to buy, which has a upstairs. While viewing the upstairs you note that some of the finishing is suspect and ask the real estate agent to view plans of the house. The plans provided do not show the 2nd level. You as the potential buyer would definitely apply for a LIM report to ensure that you are purchasing a house which has consented alterations.

As I stated above the tenant is involved in the building industry and would have been well aware that the plans that they were provided did not depict the area as viewed i.e. the plan showed the area in the warehouse as it was when constructed and compliant, without stairs and mezzanine.

Can we state that the leasing agent and tenant did not do "due diligence" - or is this scenario different in commercial leasing?

[geoffm]

Mezzanines can have fire issues. Typically need to be fire rated underneath 30 min and same with supporting structure.

Was a consent required for the demolition? It would need a consent if there were fire alarm system alterations.

[John the builder]

your problem is the NTF

if this stands then the allegations presumably make the work uinlawful
under current interpretation of RTA(anderson decision https://forms.justice.govt.nz/search...b8a07a2218.pdf

this NTF makes he tenancy unlawful and tenant gets a refund

http://www.mbie.govt.nz/info-services/housing-property/tenancy/residential-tenancies-amendment-bill/unlawful-residential-premises-questions

the NTF should be rescinded as it was issued unlawfully as there is no continuing offence. That stopped when the building work stopped. THe building work may be unapproved but it is not unlawful to remain.

Can any lawyers out there explain the difference between unlawful and unapproved please?

Dangerous is an assessment of current condition and is independednt of compliance.It should be self evident instability or imminent collapse, it can also be fire hazard which is tricky for a mezzanine which should have a fre rated ceiling but it is arguable whether the lack of compliance is dangerous because this in itself doesn't cause death or injury it only increase risk and affect fire behavior.

what you describe sounds like a storage system and part of the same space (especially if there are no stairs) perhaps you should stop referring to it as a mezzanine?

Again I say it is not unlawful just unapproved at worse and the NTF needs to be challenged to clarify this but does anyone else support this view?
it seems to be a fundamental shift in the law that should be freaking out most landlords?

[jcmk]

[QUOTE=John the builder;422234]your problem is the NTF
what you describe sounds like a storage system and part of the same space (especially if there are no stairs) perhaps you should stop referring to it as a mezzanine?

John there are stairs - leading up to the mezzanine above offices located in a warehouse area. You are right the NTF is our problem, which we can either make the mezzanine/stairs compliant or remove. Making compliant is expensive for the area involved and if we remove, the tenant is requesting a container covering 5 carparks be placed on site for make amends for lost storage on the mezzanine.

Perhaps someone can clarify for me with regards to law on leasing commercial buildings. Am I right in thinking that it falls under the same law that applies to selling a residential dwelling/property, and therefore covers the same obligations on the part of the leasing agent and prospective tenant, in that they could not ignore the fact that when viewing the mezzanine area, what they would have seen was "flooring is overlapped and not fixed down in areas and missing in areas." This is from a building inspection firm that we commissioned to produce a report on the area. The mezzanine area 73sqm was virtually empty when viewed - there was not attempt to cover up the flaws in construction.

When the leasing agent and tenant were provided with a plan of the area, the plan did not show the stairs or mezzanine, which were clearly visible in the warehouse. Should the leasing agent and tenant as part of doing "due diligence" asked if there was a building permit for the area etc?