Treading Water: The legal minefield of house-buying in a hazard-filled world
Saturday, 23 May 2026
With New Zealand experiencing a storm on average every eight days, thousands of properties in coastal inundation and flood zones could become uninsurable. Our series, Treading Water, explores the impacts of relentless weather events on families and communities. Here, Nikki Macdonald looks at how to avoid the legal pitfalls of buying a house in a potential hazard zone.
When Jono Tweedie and Elle Gray checked out the 2680m² property at the base of Mt Manaia at Whangārei Heads, they looked with the excited eyes of first home buyers.
They figured the 53m² house would do for their first baby, and they could extend when they wanted a second.
“We love this section, we love the site, we love the area, it’s an incredible place,” Tweedie says.
But the couple in their 30s also did their homework before buying. So when a title search turned up an unfamiliar red flag - what’s known as a Section 72 (s72) notice identifying a natural hazard risk - they queried it with their conveyancer.
Tweedie says they were advised the notice applied to the house on the original block their property was subdivided off, so shouldn’t affect their mortgage or insurance.
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But when Cyclone Gabrielle caused slippage on the property just two years later, it wasn’t just the ground under the house that shifted. The couple discovered that the s72 notice meant their insurers and the Natural Hazards Commission (formerly EQC) wouldn’t cover the slip damage, which included a cracked driveway, skewed floor, wonky deck poles and pipe damage.
“We pay our insurance monthly, which includes your EQC levy by default … and when you do need the help, everyone puts their hands up in the air.”
So the couple has spent the past three years living in an off-kilter house, juggling a new baby and the stress of trying to find a way to cover the $300,000-450,000 it might cost to shore up the land.
Two recent wins have finally provided a path forward. Firstly, they got the legal red flag on their title removed, after a Ministry of Business, Innovation & Employment determination found the s72 notice should not have been carried across to all the subdivided lots.
Secondly, they received compensation from their conveyancers for their bad advice.
But baby number two will still have to wait, as they’ve spent all their savings on lawyers.
“I think there was a few comedies of error along the way … and then we were sort of left holding the baby … We’ve just been pulled through the ringer.”
With new figures showing 25,614 properties now come with natural hazard notices under the Building Act and its predecessors, a property law expert says the legal red flag is just one of the many potential pitfalls for buyers and seller.
Legal tricks and traps
Kristine King is super keen to talk about natural hazards. The Law Society property law chair has been writing guides to help fellow lawyers navigate “a really changing space”.
The good news for home buyers is that it’s never been easier to find information about the risks facing any given house. The bad news is that the shifting sands of climate change and science means that information is ever-changing.
“We are getting a lot of very upset vendors at the moment, because they go to sell, to find that the information now available in the LIMs and the hazard mapping is significantly different to what was available previously.”
The 2025 changes to the Local Government Official Information and Meetings Act standardised the way local councils communicate hazard information. They have to pass on anything relevant and, as long as they do so in good faith, they’re not liable for that information.
The first go-to, says King, is Land Information Memorandums, which often also link to council hazard portals, where you can plug in an address to bring up risk maps.
She also advises buyers to check the NHC site recording previous claims, and the hazard they relate to. The fish-hook there is that no claim history doesn’t necessarily mean no previous problems, as a homeowner might pay for repairs themselves rather than claim on insurance.
As well as drilling into any hazard disclosures supplied by the real estate agent, King asks the seller directly if there have been any previous disaster events or claims.
And with the government signalling it can’t afford to keep funding buyouts after disasters, she advises buyers to think about the potential impacts on insurance and mortgages not just now, but well into the future.
“We’re saying to clients, hey, you might be able to get lending now, you might be able to insure it now, but could you in five years’ time, 10 years, 20 years, 30 years? And that’s really hard for people to digest, when they love a house, because it’s got a beautiful kitchen.”
Where things can get legally tricky, is who tells whom what if a red flag emerges. King tells buyers they have to let their lender and insurer know. But if they choose not to, she has to tell them.
“You have this really awkward situation if there is something bad, and the person's like, ‘I don't care, I'm living life in the moment, and it's never gonna happen’, and then the bank comes to us and says, ‘Is there anything material about this property?’.”
Some buyers get around that by swapping lawyers, and telling them not to get a LIM or do any investigative work, King says.
While she has seen sellers successfully challenge hazard information, such as an overland flow path mapped over their property, that usually requires expensive geotech reports.
And even with the best due diligence in the world, hazards can appear from seemingly nowhere, like the Christchurch earthquakes on a previously unknown faultline.
“They can still buy something, and then an expert report for three doors down the road identifies something, and then that’s added after you buy.
“For purchasers it is really important that they use a lawyer that’s very familiar with these things, because obviously a mistake in this area could be life-ruining.”
What’s a Section 72 notice anyway?
A s72 notice is effectively a conditional building consent. It’s a way for councils to say - there’s a known risk here, so if you build and later suffer damage from that hazard, don’t come running back to us.
That might be building a house in a flood-prone area, or consent to fix up a home damaged by a landslide.
The notice, and the type of hazard it relates to (flood, slip, coastal erosion etc), goes on the property title, flagging the problem to anyone considering buying. It also gives the council granting the building consent immunity from liability.
But as Tweedie and Gray found out, it can have a much more immediate impact for home owners - it can void your insurance cover.
Despite dutifully paying their premiums and NHC levy every month, with no stated slip exclusion (or discount), the couple’s damage claims were declined by both insurers.
“Where's the fairness in paying your insurance levy and EQC [NHC] levy, if you're not going to get covered when something does happen?” asks Tweedie. “Cut 25% off your premium, if you're not going to cover us. You can't have your cake and eat it.”
King thinks s72 notices are increasing, as hazard modelling gets more precise and a warming world amplifies weather impacts.
“Council will always be taking a cautious approach, especially because we’ve had so many properties and people impacted by these events, where they say ‘I’ve never had any water in my house for 50 years’.
“These things are happening. It’s a huge change for my industry, acting for vendors and purchasers.”
The statistics bear that out. Section 72 notices have to be registered with Land Information NZ, whose data shows new registrations have spiked in the past five years, to 800-1000 a year.
In total, 25,614 properties have hazard notices on their titles, relating to the current or previous building acts.
And it’s likely to be a growing issue, as old houses in risky areas reach the end of their lives, King says.
Her parents were slapped with a s72 notice when they applied to upgrade their old Whangārei bach, which the council then deemed at risk of wave damage. While her parents were grumpy at the time, the new house, which had to be built with tougher design specs, was one of the only baches undamaged by a subsequent storm, King says.
Like most things insurance, the impact of hazard notices is not clear-cut.
The Insurance Council says insurers deciding whether to insure a property are more interested in the nature and severity of the hazard - and any measures to protect against it - than the legal tool used to record it.
But it also says that if NHC refuses a hazard claim because that risk was flagged in a s72 notice, private insurers will likely follow suit.
“So effectively you are uninsured for [that] natural disaster.”
But NHC chief executive Tina Mitchell says a s72 notice does not automatically mean a hazard claim will be rejected. The commission could decline the whole claim, part of the claim, or still pay out.
“This type of situation is assessed on a case-by-case basis, taking into account the relevant facts.”
In the past five years, NHC has rejected four claims because of s72 notices.
As long as you have private house insurance that includes fire cover, you are still covered for damage from hazards other than the type specified on the s72 notice.
Whether you can still get a mortgage is also not black and white.
TSB Bank doesn’t require buyers to get a LIM, and has no specific s72 policy. But its lending criteria generally exclude properties deemed at risk of hazards.
ANZ says it may still lend on properties with a s72 notice, but only if the buyer can get insurance, and depending on the lone-to-value ratio.
Westpac doesn’t factor in s72 notices, and doesn’t require borrowers to get a LIM. But it does advise buyers to consider natural hazards, and offers up to $50,000 interest-free for five years for work protecting against climate risk.
Kiwibank says it can still lend on properties with a s72 notice, as long as the borrower can get insurance.
ASB and BNZ did not respond.
The opposite problem
While Tweedie and Gray went to MBIE to get their s72 notice removed, Gary and Kimberlee Whitehead have the opposite problem.
They wanted a determination that their flood-prone Northland property should have had a hazard flag before they bought it in 2013. Then they’d have likely looked elsewhere, assuming they’d be refused flood insurance.
Instead, every time the rain starts, they wonder if this will be the 1-in-100 year deluge sending floodwater 3m deep raging across their exit route, and surging 1.89m inside their raised-pile house, creating an “intolerable“ risk to life.
In the latest March storm, their piles slumped again. Get your insurer to fix them, the inspector said. But after a 2018 flood breached their 1m raised floor, their insurers warned they’d withdraw cover if they make another major claim.
“It’s just a ticking time bomb, of when it’s going to happen again,” Kimberlee says. “It’s constantly on your mind, it never goes away …The minute you see the weather starts to change, you’re constantly thinking, what are we going to get today?”
The Far North District Council argued it didn’t have good enough flood modelling to put a hazard notice on the title when previous owners applied for building consent to move a house onto the section in 1994. The MBIE adjudicator disagreed.
But winning that fight has changed nothing for the Whiteheads, so now they’ve applied for legal aid for a judicial review of the council’s decision not to offer them a buyout under the Cyclone Gabrielle and Auckland anniversary floods programme.
After a decade of losing cars, chickens and vege gardens to the rising swamp, they just want out, before they lose their own lives.
Meanwhile Tweedie and Gray figure they will have to repair and then move, as they won’t be able to afford to fix the property and extend the house.
“It’s beautiful, but we just feel like we might have to do the work and sell. It sucks,” Tweedie says.
Asked what his advice would be to anyone considering buying a property with a s72 notice, Tweedie is unequivocal.
“Don’t buy it.“
Tips for hazard‑free buying
The LIM is the go-to for hazard information. (Get your own, even if one is provided, as that creates a contractual relationship with the council).
Check the property file.
Check council hazard mapping.
Enter property address into NHC portal to find any previous hazard claims.
Check the property title for any hazard red flags, such as a s72 notice.
Talk to your insurer.