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Don’t leave RCAs to chance
R e-reading our white paper on the treatment of VAT when conducting a reinstatement cost assessment reminded me that property owners and managers rely heavily on the technical acumen of the reinstatement cost assessment (RCA) practitioner. As a RCA expert, I am thrilled to be relied upon and it is nice to be in a position to impart some of my technical knowledge to PMs through webinars or simply chatting through RCA matters on Zoom. In 2019, EK RCA was launched as a separate business from Earl Kendrick Building Surveyors. This gave me the opportunity to approach RCAs from a different perspective: a more hand-holding proposition while drawing on EK’s decade or so conducting RCAs for managing agents and landlords. Now that our business is a little over one year old, it’s a good time to reflect on how that difference has manifested itself.
Do the plan Central to getting on top of a portfolio of RCAs is to plan and consolidate. Gather the data (DVs and when the previous RCA was done) and hand that to a RCA surveyor. They will give you a competitive fee quote to assess your whole portfolio. Do this across ALL portfolios in your company and you’ll achieve even better economies of scale, consistency of approach, and, most importantly, you’ll be achieving peace of mind knowing there is an actionable plan. Actioning the plan The moment you have a comprehensive list of RCAs to be carried out, you have begun to mitigate the risks of under- insurance. Instruct the surveyor to visit your properties and make common parts access Property managers are busy and reinstatement cost assessments can fall to the bottom of their ‘to do’ list. Calling in an expert is the answer, states James Paul
arrangement easy for the surveyor… access to one or two of the flats would be ideal too. Once the RCAs are done So far, if we are selected, we will have helped you to compile a comprehensive list of your properties, assigned (discounted) fees and dates for surveys, and the surveys methodically and consistently conducted. If you are working with us portfolio- wide, you will benefit from your plan being turned into a tracker. This tracker will ensure every RCA carried out is recorded and the new declared value showing an increase or decrease, plus the percentage change. It will also show the date when the client and broker were informed of the new DV. As we are doing the RCAs, we will update the tracker so you don’t have to. There is a lot of data to track so why not delegate it to us? Delegation is the key Trust in your RCA provider and delegate to them. You remain in control yet you have an RCA practitioner dedicated to you to keep you compliant. Why deal with ad hoc RCAs when you can get a grip on the whole portfolio in one fell swoop?
Overcoming the obstacles Property managers are busy. As a consequence, they are constantly
prioritising and reprioritising. Too often, the essential periodic assessments don’t get done or at least they get done on an ad hoc basis. The reinstatement cost assessment is a classic example of an essential task put to one side. The importance of doing RCAs is rarely questioned once understood, not least as an under-insured building may have devastating consequences in the event of a claim. If a building is insured for a rebuild cost (declared value) of £5million but the real cost of rebuilding is £10million, any claim pay-out will only be 50 per cent, leaving the leaseholders to fund the shortfall. So assuming the importance of RCAs is not in question, why are they so often shoved to the bottom of the in-tray? Are PMs relying on buildings staying claim free or afraid of the extra admin or even broaching the subject with their clients? I understand PMs’ worries and reservations. Many – especially those new to the industry – are unaware of just how vital RCAs are, and they are left to discover that for themselves (through one of our webinars perhaps).
James Paul is a director at EK RCA
13 ISSUE 108
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