Schedules of Condition - A picture paints a thousand words

The initial cost of a schedule of condition will often be significantly lower than the savings that are likely to be made at the end of a lease term, which actually makes a schedule of condition extremely good value for money!

The value of a schedule of condition is often underestimated and regularly seen by tenants as an additional extra that they can afford to do without.   A recent survey of landlords confirmed this (click on the link below for the full article):

"Clear documentary evidence on the condition of the property is critical in order to overcome, for example, differing expectations of what constitutes clean... 

 Many landlords in the LetYourProperty.tv poll said they were worried about professional inventories (Schedules of Condition) being too costly, even though this may not be the case"                                                                                          

                                                                       Source: Stride Independent Insurance Specialists

It is interesting that the article refers to 'inventories', because this is what a schedule of condition actually is and not the detailed description and analysis of defects which many assume to be the case. This is not helped by the many consultants who incorrectly define the purpose of a schedule of condition on their websites and other marketing literature.  For the purposes of clarity, a schedule of condition is a photographic and textual record of a building/structure/piece of land at a defined moment in time, a snapshot if you like.  It's main purpose is to provide a record of historical evidence that can be used to limit liability in the event that a landlord may be claiming that a tenant has damaged a building.  Through the schedule of condition the tenant then may be able to prove that the damage already existed and therefore limit their dilapidation's liability.  In these situations the initial cost of a schedule of condition will often be significantly lower than the savings that are likely to be made at the end of a lease term, which actually makes them extremely good value for money!

If a more intrusive survey is required to consider and advise on the condition of a building then a building survey or a structural survey may be necessary.  These types of surveys will provide much more that a description and photographs, and will actually give a detailed analysis of the defects within a building together with an explanation of the probable cause, recommended remedial advice and if required a budget cost estimate for the remedial works.  There  are many different types of surveys that can be undertaken and it is important that professional advisers clarify the brief with their clients to ensure that they are providing the right type of survey.  

Although schedules of condition are commonly associated with commercial leases, there are other situations in which they will be used.  For example, where any proposed work may have a detrimental effect on adjacent structures or land.  A common example of this is works that fall under the scope of the Party Wall etc. Act 1996.  Any work to a party wall or an adjacent excavation within three (or six) metres and below the level of the existing buildings foundations has the potential to cause significant damage.  If a schedule of condition is prepared, before works commence, then adjoining owners cannot make exaggerated claims for damage if the schedule of condition shows that the damage was there before the works commenced.  Even if it is established that works do not fall under the scope of the Party Wall Act, it still may be advisable to prepare a schedule of condition if adjacent buildings are in a particularly poor state of repair, where there are 'sensitive neighbours' or where works are of a particularly risky nature.  

Compared to other types of inspections/surveys schedules of conditions were relatively easy to prepare, because all I was really doing was describing what I saw.  There was no requirement to provide detailed analysis or advice and this sometimes gave welcome relief from the more intense types of inspection that I would carry out.  To be effective a schedule of condition must be prepared professionally (accurate descriptions and good quality photographs), and at the right time.  Therefore, the schedule would be prepared and attached to the lease and signed by both the landlord and the tenant or their representatives.

If you are a tenant who thinks that a schedule of condition is something you can do without then think again and consider the long term value that this will provide.  This advice is not exclusive to commercial tenants, but also to residential tenants including short term tenancies such as student lets.  It would be much more difficult for a landlord to withhold a deposit if you can prove that the damage being claimed existed prior to your occupation!

Information/opinions posted on this site are the personal views of the author and should not be relied upon by any person or any third party without first seeking further professional advice. Also, please scroll down and read the copyright notice at the end of the blog.

Take VAT - UK Government Jeopardise the future of Listed Buildings

It appears that our government are prepared to role the dice and jeopardise our heritage on something that is likely to make an insignificant contribution to our national debt (additional VAT income), but significantly increase deterioration and disrepair of our listed buildings.

Source: Google Images

Sometimes policies/decisions are made which make you wonder whether those who make them have really thought through the implications and potential benefits of what they are proposing.  One such policy is the proposed removal of VAT exemption for alteration and restoration works to listed buildings.

'On 1 October 2012, the government is lifting the exemption on VAT to listed buildings, which it terms an ‘anomaly’, and imposing VAT at 20 per cent to all alterations and restorations in a move which will cost owners of listed buildings thousands of pounds just to ensure their property does not fall into disrepair' (RICS 2012)

Anyone who has had the pleasure of living in or working on a listed building will know that any works demand a higher level of consideration in terms of detailing, materials, workmanship and liaising with the local authority planning department, in comparison to a building that is not listed.  This ultimately impacts on cost, which can increase significantly to meet the requirements of a listed building consent. It is no surprise therefore that custodians of listed buildings sometimes struggle to keep listed building in a reasonable state of repair and sadly, these buildings fall into disrepair, become neglected and sometimes even derelict.

Local authorities have the power to issue statutory repair notices to enforce custodians to undertake emergency and other essential works to a listed building, however as stated above, these works are likely to be costly and the custodian may struggle to find the funds to comply with the requirements of the notice.  This problem is likely to be exacerbated by an increase in costs of 20% when the VAT exemption is removed later this year, resulting in the possibility of essential works not being undertaken and continued deterioration of the very buildings that legislation is there to protect.  It seems to be a contradiction that the government can pass legislation where they aspire to protect the heritage of this country, such as Planning (Listed Buildings and Conservation Areas) Act 1990, by placing significant restrictions on what can and cannot be done to a listed building. Then on the other hand make it difficult from a financial point of view to fulfil the requirements of the listing, by not offering VAT relief on the works.  Can the government expect to have it both ways?

In their publication 'Stopping the rot' English Heritage define the importance of protecting our past very well:

'This nation’s historic buildings are a shared legacy; once lost they are lost forever. So saving England’s neglected heritage is a challenge for us all. It will only be overcome so long as government, private owners and the voluntary sector work together to breathe new life into these irreplaceable but sometimes neglected places.'

The interesting thing about the above statement is the co-ordinated approach required of private owners, the voluntary sector and the government!  It appears that our government are prepared to role the dice and jeopardise our heritage on something that is likely to make an insignificant contribution to our national debt (additional VAT income), but significantly increase deterioration and disrepair of our listed buildings, when works become even more expensive.  This is a typical example of a blinkered approach by the government where they have failed to think through the implications of their policies, and one which is likely to result in a very uncertain future for many of our listed buildings.

When debating the removal of VAT exemption in parliament there was talk of discretionary grants for certain types of buildings.  Anyone who has ever applied for government grants before will know of the endless form filling and vast amount of information that is normally required, with a limited likelihood of obtaining the grant in question.  If the government were serious about protecting our heritage, surely it would make sense to incentivise works to listed buildings rather that de-centivise, which is what will actually happen!  At what point will the government realise that this is something they should have left alone?  As English Heritage point out, 'once lost they (listed buildings) are lost forever'.

Information/opinions posted on this site are the personal views of the author and should not be relied upon by any person or any third party without first seeking further professional advice. Also, please scroll down and read the copyright notice at the end of the blog.

Party Wall etc. Act 1996 - It's my party and I'll comply if I want too (or so some think!)

The main purpose of the Party Wall etc. Act 1996 is to prevent and resolve disputes, however, it seems a little strange that most of my appointments under the Act were usually made when a dispute had already occurred!

Source: http:/www.curchodandco.com

Anyone who deals with law will know that reading legislation can often be cumbersome, time consuming and often difficult to understand and interpret.  This is not the case however with the Party Wall etc. Act 1996  which is one of the most simple and prescriptive pieces of legislation that you could hope to read.   The guidance (link above) from the Department of Communities and Local Government, describes the purpose of the Act as  'providing a framework for preventing and resolving disputes in relation to party walls, boundary walls and excavations near neighbouring buildings'

The amount of Building Owners (a term used under the Act to describe the party who is undertaking the work), who choose to ignore the Act, whether through ignorance (which is no defence in law!) or a genuine desire to cut corners to save on time and expense, never ceases to amaze me. If the main purpose of the Act is to prevent and resolve disputes it seems a contradiction in terms that many of my appointments under the Party Wall etc. Act were usually made when a dispute had already occurred! (at this stage the dispute was in general terms and not a Party Wall dispute). The scenario below is a recent post on the Building Magazine Forum  and is typical of situations that I have been appointed to deal with on numerous occasions:

Have lived in current house for 4 years, it's a semi and the other half changed hands last year. New neighbour promptly guts house, relocates bathroom from side of property to rear. Digs deep holes in garden for sewerage but doesn't fill holes in. Moves into home in November.

January applies for planning for two storey side extension, single back extension and front porch. This would take it from 3 beds to 5 beds! Planners refuse but give permission on second application on scaled down side extension with only an a increase to 4 beds. He started 'official' work in April just after receiving permission however had dug front porch foundations before Christmas along with making the 'sewer' holes out the back into bigger foundation shaped holes!

Now my problem. His rear foundations are several feet below my land and right against my fence which is approx a foot from my conservatory. Yesterday I noticed that in fence is leaning and on inspecting it I discover it's floating! as the land my side has started to fall into his excavations. This is happening along about ten foot of the fence starting at the house. He has tied rope to the fence to try to hold it up right but it's not working.

Looking down from an above window I can see gaps appearing in the lead flashing of my conservatory on that side so am worried that his deep excavations, which have been open for some nine months, are damaging my property. First step will be to speak with him but what should I be asking he do? Do I need a Surveyor to check there is no damage?

Also the front porch he's built was supposed to be a lean to roof but he's built it as a ridge roof and water is now pouring onto my house and land. I've spoken to him about this and he plans to put guttering up 'sometime'.

Can he just change his plans like this?

Anyone who is affected by a 'Building Owner's' work as described above, where Party Wall Notices should have been issued but have not, cannot claim any benefits under the Act, because the provisions within the Act cannot be utilised until correct notification has been issued (the Act is then initialised).  Below is the response I posted to the above scenario:

I agree that the Party Wall etc. Act should apply, and your neighbour obviously has not notified you. Seek the advice of a Surveyor immediately. If you're property is being significantly affected in the way you suggest then the work next door needs to be stop immediately and possibly temporary support of your property needs to be undertaken.

If your neighbour refuses to stop work, then you can apply for a County Court injunction to enforce this. Once works are stopped your neighbour should then issue Party Wall notification, for which you will have a number of options. One such option will be that you dissent (do not agree) with the works and in which case you have the option to appoint your own surveyor, who's 'reasonable fees' must be met by your neighbour.

Your surveyor will then work with your neighbour's surveyor and agree a Party Wall Award which will include details about how the works should be completed and what should be done to rectify any damage. The award will be agreed before works re-commence and will give you the comfort of knowing that the works will be completed appropriately and if any damage is caused it will be dealt with.

There is an option for you to select an 'Agreed' surveyor, who will act impartially for you and your neighbour, however when I have been called in, in situation like this I often found that relationships between neighbours had become soured and they wanted to appoint separate surveyors.

I would advise you to contact a surveyor immediately who deals with Party Wall issues, who will go through the procedure with you and hopefully explain the above in more detail.

My response focused on the Party Wall issues, however there is also a possible breach of Planning Permission in respect of the porch roof that would need to be investigated.

In conclusion there appears to be a general lack of awareness of the Party Wall etc. Act and it's requirements by members of the public (and their advisers) which through lack of publicity, poor advice or genuine ignorance is not acceptable.  Legislation does not provide a choice, it must be complied with and those who fail to do this must be prepared to face the consequences, so be warned!

Information/opinions posted on this site are the personal views of the author and should not be relied upon by any person or any third party without first seeking further professional advice. Also, please scroll down and read the copyright notice at the end of the blog.

Quality Assurance - How accurate is your documentation?

Robust supervision and training of staff will help them to understand the significance of accurate documentation. Organisations should not lose sight of this, particularly in the current economic climate.

Source: http://www.pm-primer.com

In a recent article I discussed the importance of drawings and the consequences that are likely to occur in a construction project if they contain inaccuracies or omissions.  Drawings are one of the main components of tender documents, however, as important as they are, they are only a single component of the documentation. 

Drawings must reflect precisely the detail contained in the specification, and vice versa.  Any conflict between the two will lead to confusion from Contractors during the tender period, (assuming that the Contractors have read the documentation fully, which does not always happen!), and possibly disputes on site when the selected Contractor realises any inconsistency.  This can then lead to an embarrassing explanation to the Client, particularly if the Contractor tries to claim that his tender price did not include for the inconsistency and ultimately results in a dispute for which the Consultant is likely to be held accountable.

Consequently, the process of preparing tender documentation and in fact any documentation that is to leave the office, should be undertaken with care and attention, with organisations having robust quality assurance processes to ensure that the documentation is checked at various stages. Junior and new members of staff need to be trained and supervised throughout the whole process so that they understand the significance of preparing tender documentation and that each component cannot and should not be prepared in isolation.  Experienced and senior members of staff should not be excluded from the quality assurance process as they too are likely to make errors or omissions.  The point is that through the supervision and quality assurance processes, any errors or omissions are identified before the documentation leaves the office.

In today's challenging environment where profit margins are tight and staffing levels have been squeezed, it would be very easy to allow documentation to be issued as a result of sometimes poor or non existing supervision and quality assurance procedures. One of my former organisation's quality assurance procedures was that no documentation could leave the office until it has been signed off by a senior manager. I can remember many days when members of staff would pile drawings, specifications and all sorts of other documentation onto my desk for checking.  Now considering I still had my own workload, reading through and checking all of this documentation was challenging, however because I was signing the information off I had to take the time too look at it properly, which often meant working long hours, or taking work home. I am sure many reading this article will understand, having been in similar situations themselves. Although it was sometimes tempting to skim read documentation and drawings I was always aware of the implications, to my organisation and personally, if inaccurate documentation was issued.   Inevitably, errors in signed off documentation would sometimes be identified, however by adopting robust procedures we kept this to a minimum, and after all we are only human and we will sometimes miss something.

Those who prepare the documentation often do not appreciate the time that is necessary to read through and check what they have produced.  In some circumstances members of staff would bring documentation to me for checking and expect me to look at it, there and then and sign it off immediately, because of an imminent deadline (often down to their own poor time management!).  This is where mistakes can be made, and any organisation that works in this way or allows this to happen, even in isolated cases, are likely to keep their solicitors very busy! Organisations must have clear policies in place so that everyone understands and complies with quality assurance procedures and also has respect for the time of those who will be checking it.

As stated previously robust supervision and training of staff will help everyone (not just technical members of staff), to understand the significance of accurate documentation. Organisations should not lose sight of this, particularly in the current economic climate.  Client's are much more likely to cultivate relationships with those who they feel confident will deliver a project effectively and in a professionally manner.  Allowing inaccurate documentation to leave your office is not professional and gives a very negative impression.  There is a lot of competition out there and it will not take long to sour a relationship,  'youre only as good as your last project', comes to mind, so ignore this at your peril.

Above, I have used the example of tender documentation, as from experience I know the problems that can result from in inconsistencies in documentation. Tender documentation is a topic I will cover in more detail in a future article.


Information/opinions posted on this site are the personal views of the author and should not be relied upon by any person or any third party without first seeking further professional advice. Also, please scroll down and read the copyright notice at the end of the blog.