Croyland Building Surveyors are pleased to provide these introductory guides to specific surveying topics. We find that they give our clients a good understanding of the potential issues that may arise in properties of all descriptions. These guides also serve as an introduction to the work which we are able to undertake.
Do I Need One?
If you’re buying a building, or taking the lease of a building, you are taking on a significant liability.
What Are My Options?
Everyone, even hard-bitten surveyors, can be carried away by the excitement of getting a new place. Its easy to fall in love and to overlook the odd detail that probably won’t matter and, well, we’ll sort it out somehow.
No-one should EVER buy or rent a property without getting someone else to look at it with them. Even if it’s just a friend’s, listen to another point of view. It could be the best pint you ever bought.
Someone Else’s Valuation?
If you’re borrowing money on a loan or mortgage, the lender will want to know that their money is secure. They will usually want a valuation report and expect you to pay for it, one way or another. You are entitled to see what it says, but the report is for your lender and not for you. The lender’s interests are probably not the same as yours. They will care about being able to sell easily and to get their money out. They won’t care whether it suits your business or your family, how much it will cost to run, whether you can alter it, or whether it needs repairs. The principal purpose is valuation and this is tricky at the best of times, so fees are significant.
A Proper Survey?
The valuation surveyor might offer an upgraded service to include a Home Buyer’s Report or a full Building Survey Report. A full Building Survey Report ought to be just that – a complete and thorough inspection and report on the building. It is a bespoke service and it can cover whatever you want. It should obviously cover chimney pots to drains but it can be tailored to include advice on alterations, conservation, outbuildings, communications, swimming pools, and any other areas of interest. Some features might be beyond the expertise of the surveyor and might have to be referred to a specialist.
A Home Buyer’s Report is an abbreviated “off the peg” report designed by the RICS to suit the majority of home buyers. The report requires a full inspection but with standard exclusions, and the report format is kept short and simple. This saves time and therefore money. It is not intended to be used on older properties, larger properties, or anything out of the ordinary. It is not suitable for commercial property.
What About My Business?
Surveys on commercial properties are geared to different customer priorities. The obligations imposed by leases are particularly important. A tenant will usually be required to keep the building in repair, but might also have to reinstate improvements or alterations. This is a field known as “dilapidations” and it is not where you should venture without professional advice. The property might look smartly fitted out, but if you have to remove all the partitions, reconfigure all the lights and air-conditioning, and replace all the carpets at the end of the lease, that could amount to a hefty bill – especially with the landlord’s costs on top.
Commercial occupiers also have responsibilities under employment and H&S legislation so your surveyor needs to be up to date.
Aren’t Survey Reports Just Full of Disclaimers?
This is true up to a point. Anything you buy these days comes with pages of warnings, exclusion clauses, and statements of the blindingly obvious. This is generally because the suppliers don’t know who you are or what you intend to do with the product. The suppliers (or probably their insurers) try to plug as many loopholes as they can think of.
On top of this, any service sold as a commodity will be driven by costs. The cheapest staff will be pushed to do as much as possible. This will get a basic service with a standardised approach but, to provide this, the supplier has to exclude all the things that are not being done.
It has been said that any surveyor can only see 7% of any building. The rest is concealed, buried, or out of reach. Such statistics are usually made up, but the point is that there is much beneath the surface. It takes skill, training and experience to recognise symptoms, to know what to look for in different circumstances, and to follow these to a useful conclusion.
How Can I Get My Money’s Worth?
Firstly, talk to your surveyor and establish a sensible and clear brief.
Secondly, get your surveyor to include a detailed list of defects with estimated costs. This will support any negotiations that might be necessary, and allow you to budget properly.
Thirdly, whether residential or commercial, it is rare for occupiers to move into a building without needing to make some modifications. If your surveyor knows what you have in mind, the report can include useful advice on feasibility and cost.
Don’t overlook the advantages of having the surveyor as project manager for subsequent building works or fitting out. A firm that does both areas of work will have learnt from both, and will give better value as a result.
A Project Manager generally takes on the lead executive role of the project. The skills required will depend on the nature of the project. The client might have these in-house, or might recognize the need to bring in expertise from outside. The project management services that are usually offered include:
- Helping to define the project brief, budgeting and cost planning.
- Assisting in the selection and appointment of the project team.
- Preparing a building contract and advising on suitable provisions for reporting progress, dealing with changes, stage payments, damages for late completion, retention monies, etc.
- Providing recommendations for a shortlist of suitable contractors.
- Arranging for financial checks on those contractors.
- Establishing that each shortlisted contractor has adequate insurance cover, including professional indemnity insurance for design work.
- Advising on the provision of suitable warranties, underwritten by reputable insurance companies, against defective materials and workmanship
- Tendering or negotiating the contract to the shortlisted contractors to obtain best value
- Analysing the submitted tenders and comparing the contractor’s prices on an adjusted / uniform like-for-like basis and advising which tenders offer the best value for money
- Completing the contract formalities.
- Ensuring that appropriate Construction Design and Management (“CDM”) Regulations measures are in place to protect health and safety.
- Dealing with the applications for statutory consents. These might include building control, planning and listed building consents. Ensuring that the necessary inspections are made and that the consents are obtained without delay.
- Dealing with landlord’s or other regulatory consents.
- Undertaking regular site inspections to monitor progress, and also to check that the works are being carried out in accordance with the agreed specifications.
- Contract administration – chairing regular site meetings, checking stage payments to be made to the contractor, reporting regularly to the client on the progress of the fitting out works programme
- Managing any changes that the client may later wish to incorporate into the fitting out works specification, following commencement of the works, and representing the client’s interests in agreeing the extent of any associated additional costs
- Inspecting the completed works to ensure satisfactory completion in accordance with the specification and issuing the certificate of practical completion
- Overseeing the making good of any “snagging” items of disrepair that may have developed following practical completion of the fitting out works and authorising the release of the contract retention monies to the fitting out contractor following completion of the snagging works.
Successful project management depends on a range of skills. Those listed above are mostly technical but they need to be underpinned by personal or managerial abilities. The right balance needs both harmony and tension, and varies from project to project. Getting that right takes experience.
Party Walls and Neighbours
Stout fences make good neighbours, so the saying goes. Every so often, a horror story appears in the media about ordinary sane reasonable people who have been at loggerheads over some worthless bit of boundary. It starts with some almost forgotten infringement, and ends up in court with a bill of thousands.
Perhaps they should have seen the Laurel & Hardy film where they start pulling little bits off each other’s car, tit for tat, until they are both surrounded by a pile of scrap.
In our crowded island, it is worth keeping good neighbours and this means observing the proper courtesies while showing a degree of tolerance. The occasional party should not be difficult to manage. Lengthy building works, on the other hand, can try anyone’s patience. Because of this, there has been “Party Wall” legislation in London since 1939. This was repealed and extended in the “Party Wall etc Act 1996” to cover the whole country (more or less) so it’s fairly recent to most of us.
There is helpful guidance available at http://www.communities.gov.uk/publications/planningandbuilding/partywall
but, put simply, if someone wants to do work to a party structure, or excavate within certain distances of a neighbour, they have to serve a notice in advance, giving details. Failure to serve a notice is a breach of the Act and could result in an injunction to halt the work while things are sorted out. Once the neighbours (or “adjoining owners”) have a valid notice they can consent within 14 days to the work going ahead. If they do not consent, a dispute is deemed to have arisen. Disputes have to be resolved by the appointment of surveyors. The surveyor can be anyone other than the owners, but we think Building Surveyors are best suited. Both owners may appoint a single “Agreed Surveyor” but it is more usual for each to appoint their own.
It is worth stressing that appointments of surveyors are statutory. The surveyors should act impartially under the terms of the Act, and it is not a client-agent relationship.
A Third Surveyor is agreed between the first two, to be called upon to arbitrate should the other surveyors disagree. Once appointed, the surveyors agree a document, known as an Award, to settle the dispute, agree methods of working, protection, insurance, access, and any other matters within the scope of the Act. The surveyors will monitor the project as it proceeds and agree any supplementary awards if needed. They will then check for damage after completion and agree how it should be made good.
All this is clearly helpful to a neighbour faced with the threat of damage or disturbance. It is also helpful to the people doing the work. It establishes working arrangements, a formal and impartial means of communication, and settles technical details. Under certain circumstances, it can provide rights of access onto the neighbour’s land. It is much more efficient than using lawyers, and considerably cheaper. At the end of the day, there will be a better chance that everyone will still be on speaking terms.
Dilapidations at the end of the Lease
“Dilapidations” is a legal term referring to breaches of obligations under a lease to repair, reinstate or redecorate a property. The law is complicated and stems from the lease (which is a contract) and also from various statutes, legal cases, and formal protocols.
A landlord will be concerned to see that the property is not devalued by a tenant’s neglect. Clauses in the lease will stipulate regular cleaning, redecoration, repair, prevention of alterations, and so on. If the tenant fails to comply with these, the landlord could take action to enforce the lease covenants. However, such action is unlikely to succeed unless there is clear risk of damage to the landlord’s “reversionary” interest – being the value at the end of the lease. The tenant is generally protected from a dilapidations claim until towards the end of the lease, unless the place is about to fall down.
Towards the end of a lease several factors often come into play. The tenant might want to renew the lease but on more favourable terms, or might be looking at a more attractive alternative. The landlord will not want the property empty and might want to push the tenant towards renewing. The threat of a large dilapidations claim might seem a useful lever. Or the landlord might see an opportunity to retain the tenant’s deposit and update the property at the same time as doing the repairs.
In nearly all cases, the end of a lease needs a technical understanding of repairs and what ought to be done to put the building into reasonable condition. However, this must be tempered with a clear understanding of the parties’ legal situation. This occasionally contradicts what might seem like common sense, and lead to a situation that you were not expecting.
Early advice can save a lot of time and money. We prefer to meet clients early on, and to provide initial high-level advice on liabilities and likely costs. This usually requires no more than a copy of the lease and a walk around the building for us to provide a report. If this is done a year or so in advance of the lease end, it will give useful advice for budgeting and programming.
Preparing (or responding to) a full “terminal schedule of dilapidations” is more time consuming. It requires appraisal of a full set of lease documents, side agreements, licences etc. It will also require a thorough survey of the building and testing of plant installations. The cost of doing this can be substantial so it’s best to get fee quotes, and to make sure that all the documents are in order. The lease will probably allow the landlord to recover fees for preparation of a schedule. However, unreasonable fees, and unreasonable schedules, can be successfully resisted. There are pit-falls for both landlords and tenants, so you need a good surveyor.
Appointing a Contractor
The appointments made early in any project are critical to its eventual outcome. Large clients such as Government Departments and major institutions often have their own experts dealing with procurement. Most commercial clients are used to dealing with suppliers of all sorts and are highly skilled at negotiating a contract. It is crucial to their business and is an essential part of the day job. We all enjoy meeting new people and learning new skills. But how much time can you justify learning the ropes in the construction industry if you’re not procuring building work on a regular basis?
The obvious answer is to employ a good building surveyor who will have the advantage of years of experience. However, if you really think you’ve got time to do it yourself, then some basic pointers might include:
- Pre-qualification: sieve out a shortlist using basic criteria: location; market sector; relevant technical qualifications; insurances; H&S standards; compliance with your own policies.
- Track record: how long have they been in business and what have they done?
- References: go and see past jobs and speak to past clients.
- Resilience: check that they have adequate resources to meet your demands, and that their finances are strong enough to see you to completion and beyond.
- Match: are they on your wavelength and do they sympathise with your objectives?
- Analyse: avoid holding a beauty parade. Instead, set down measureable criteria for selection.
When it comes to agreeing a contract you really do need to get professional advice. Every job is different and involves thousands of inter-connected tasks across numerous trades. There is too much scope for misunderstanding and miscommunication, even without deliberate corner-cutting and skulduggery. Whatever care you take over selection, the contractor is working for profit and you are on his ground. You need a proper contract backed up with proper contract documents.
There are several types on contract in common use. The main difference between them is in the degree of design being carried out by either party. “Traditional” building contracts had an architect/ surveyor/ engineer producing fully detailed designs that were agreed with the client and then passed to the contractor to build. The client, through the designer, takes responsibility for the design and has full control over what gets built. In many cases, however, there are advantages in using a contractor’s experience or specialist knowledge in the design process. If the client has only functional requirements, there might be advantages in letting the contractors build it their way. The contractor is responsible for meeting the stated requirements but the client passes over some of the control. This is known as “Design and Build” and is most commonly used in the commercial fitting-out industry.
There are text books on all this, and much more besides. This is only the sketchiest of introductions and must not be relied on!