inresidence
The Recipe for the Perfect
B efore we attempt to give away the works projects are alike and that is because every block of flats has unique requirements, then there’s the tenure of the building to consider (RMC/freeholder/RTM), the ability of the managing agent and how ‘on board’ the service charge payers are. In theory, all stakeholders want the same thing: a safe and well-restored building achieved at a reasonable price. In practice, there are competing objectives, so it’s important to prepare for and mitigate against the risks of something going awry. This is a blog aimed principally at the residential (block) property manager (PM), as they tend to be at the sharp end of any major works project. Who are the stakeholders? The RMC/RTM/head-leaseholder/freeholder (your client) has an obligation under the terms of the leases to maintain the building and usually to repair/redecorate on a cyclical basis. The managing agent serves the ‘section 20’ notices, they’ll select a building surveyor to become contract administrator and principal designer, they’ll raise funds for the project and do the accounting for the project through to the end of the defects liability period. Then there’s the contractor. Keeping all these stakeholders happy and on track needs a recipe. 1. Earl Kendrick Major Works Wheel Time is one thing you can’t retrospectively recover, so start early, even one year in advance. Our ‘major works wheel’ (available on request) shows PMs/their clients just how far ahead you ought to prepare. perfect recipe for a major works project, a word of warning: No two major 2. Check the lease A good PMwill know when each of their properties are due for cyclical major works, as they will have checked the lease. The lease will also tell you what your client’s obligations are (e.g. – the landlord has responsibility for painting the external surfaces but the leaseholders are responsible for repairs to their own window frames). Don’t assume, check. The lease will also inform if you can request each leaseholder’s contribution to the major works whenever you wish or if you need to wait until, say, the next quarter day. This is important.
3. Funding and capital expenditure planning Expenditure Planning Look at your reserve fund. How much is in the account? Is this going to be enough? Is there a capital expenditure plan that will show you what is scheduled to be done and how much it’s going to cost? If there isn’t such a plan in place, perhaps this is a good time to commission one. a frequency for the cyclical works. If it doesn’t, then the necessity for the works may drive the agenda. So ascertain from a building surveyor what needs to be done by commissioning a survey, resulting in a ‘scoping document’ to show to your client. This will summary the works recommended and provide an estimated cost range to compare against the funds you hold. All too frequently, major works projects are specified/tendered, the results of which shock the client and the leaseholders. A scoping document helps to manage expectations, tailor the scope of the works to the budget available or phase the works. If there are areas of the building which are difficult to survey from the ground or from a neighbouring building, then a drone survey is a good idea. 5. Communicate By starting the process early, you’ll have plenty of time to communicate effectively with your client and the leaseholders. If they are given the relevant facts about the lease, funding, the works needed etc, they are far more likely to be on side. And they’ll have more time to raise the necessary funds to pay their contribution when the demand arrives. Keep the surveyor up-to-date with how well funds are coming in, so they in turn can manage the expectations of the chosen contractor. When there are updates for the leaseholders – particularly when they may be inconvenienced access wise or privacy wise – let them know via the building’s online portal or email. Don’t forget tenanted flats still contain residents who need to know what’s happening so consider the methods of communication that reach all owners and occupiers. 4. Scoping document The lease may or may not expressly specify
Be good neighbours. If there is a block of flats or a private house adjacent, let them know well in advance of your project. 6. Section 20 Get the section 20 notice of intention drafted with care. A notice that doesn’t comply with the legislation may mean starting the consultation process again! Draft the section 20 notices with the surveyor. The surveyor may have some useful input. The second stage section 20 notices will then list the tendered prices, including the continency. Explain each role, so leaseholders are clear who to contact (surveyor or managing agent) and when. The earlier in the process you can involve a building surveyor, the better it’ll be for the project’s smooth running. If the client is neutral, select one you trust or set up a beauty parade of say two surveyors for your client to meet/interview. Remember that a major works project can make or break a managing agent so the more in sync you are with the surveyor, the more you can demonstrate to the landlord a collaborative, thoughtful and organised approach. 7. Your key partner – the Building Surveyor • a. Involve the surveyor early! • b. Planned maintenance programme A good surveyor will recommend they produce a PMP. It could be that with an investment in such a long-term maintenance plan, the next cycle of major works can be postponed or phased (if the lease allows). • c. Spec Assuming the works are needed and the lease is quite clear that they need to be done, then the surveyor will produce a specification of works. This is where the plan becomes a project. A clear spec avoids ambiguity, ensures tenders are robust and provides a good control
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