The Westland District Council is proposing tough new limits on building development in Franz Josef - a plan that business owners say would penalise them unfairly.
Franz Josef sits astride the South Island's Alpine Fault line and affected business are planning on asking the government for compensation after the exact location of the fault - running under homes, a motel and a petrol station - was mapped.
Richard Simpson from the Westland District Council said: "There is a big risk of the Alpine Fault moving and any building within that fault area will break, will get destroyed and will fall down."
GNS scientists predict there is a 20% chance of the alpine fault rupturing within the next 30 years. If that happens, the ground could shift horizontally by up to nine metres and vertically but up to two metres.
The council is now seeking a ban on future development in areas which are close to the fault.
Simpson said the council was prepared to allow those people who are there already to stay. "But please no more, enough is enough already," he said.
It wants 38 buildings to comply with strict new guidelines, but business owners argue those rules would leave many out of pocket.
Marcel Fekkes from the Franz Josef Development Society said "if you can't do anything to your business then it wont have much value".
Government real estate is also at risk - including the police station and Department of Conservation houses.
Waynne Costello from DOC said they would like to see residents "move away from the zone completely" - a wish shared by affected business owners who want the government to help.
"The community would like to talk to the government to see if we can find a way similar to Christchurch landowners to find compensation for people in the zone," Fekkes said.
But the Ministry for the Environment says there are no compensation provisions under the Resource Management Act.
The town is now considering legal action.