Barlow and Associates Blog

How much to rebuild your building?

September 30th, 2011

Catastrophe can strike at any time

If your premises burnt down or were flooded where would your business be?

Could you move out and continue elsewhere as if nothing had happened?

Would you have to stay and put it right?

If you own the premises could you afford to fix them or would your business be destroyed? Even worse, would you still have to pay-off a loan on them?

Whether we like it or not, buildings insurance is a necessary evil. We cough-up each year for something that might never happen.

It’s tempting to skimp on the premium to save a few pounds but to under insure could be a nightmare. When disaster strikes the Loss Adjuster (note the word ‘Adjuster’) will be out to limit the insurer’s liability. If you’re 20% under insured they will pay out 20% less than you need; then where do you fund the shortfall from?

If you’re over insured you will be paying too much. That’s safer than being under insured but you’ll be paying too much year-on-year.

Who knows what the right sum to insure for is anyway? Don’t trust your broker to get it right. What does he know about rebuild costs anyway?

Don’t be misled by the price you paid for the property. Commercial value is measured by the use to which it can be put, its location and possibly the condition it’s in. And the price will include the land.

The cost to re-build is completely different. That will depend on the size, design and materials used. The rebuild cost is often hugely disproportional to the market value, a common problem where historic or iconic buildings are used for normal commercial uses.

Chartered Quantity Surveyors are experts in building costs. They can help you get it right so you don’t pay too much or too little. And, when the Loss Adjuster comes trying to reduce the pay-out, a QS is well placed to fight your corner to make sure you don’t lose out.

Posted in Building Surveying, Construction, Property Management, Quantity Surveying, Uncategorized | 1 Comment »

PV, or not PV, that is the question

July 13th, 2011

The door-bell rang. I opened the door to a cowering salesman “I’m not selling anything” he whimpered “I just want to save you some money on your electricity bill”.

This guy wasn’t from Scottish Energy or any of the other Gannets trying to woo me away from my current provider. He was offering to install photovoltaic panels (PV) on my roof – for free!

The contract was for 25 years. The deal was that I use the energy they create to save on my bills and they collect the feed-in tariff. After 25 years the PV panels were mine, at no extra cost.

He took-out his I-phone, tapped his way to the compass app and checked my roof orientation (I know it faces East/West) and confirmed that my roof was ideal. His colleague would be visiting a neighbour tomorrow, could he call in to talk it through?

PV can look neat when it's designed-in

I know South-facing is the optimum direction. And, not being one for ‘appendages’ on the outside of my house (I won’t even have a TV aerial or upvc windows) I said I would think about it. And I did.

So, I use the energy they create. But we’re out all day and, as PV doesn’t work in the dark most of the energy will be fed back into the grid; they gain from that, not me. Wonderful!

I looked on the ‘net’ for alternatives; there are loads out there. I could buy the PV and collect the feed-in tariff myself . But the pay-back is estimated at 10 years, and that’s for optimum orientation. So it would be longer for me.

I’m nearly 60 and looking to down-size in the next few years. So considering the options:

If I take their offer I might save a few pounds in the short term, but the house would be lumbered with ‘their deal’ when we moved. New owners would be prevented from installing their own system and collecting the feed-in tariff. PV panels don’t look pretty. How do I repair my roof if I need to? The technology will go out-of-date. And the house owner will have to pay to remove them after 25 years when they break down. What affect would this have on the value of my house?

If I installed my own I’ll have moved before they’re paid for. The technology will be ageing. They could devalue the house. And who can rely on any government’s promise to last 25 years?

Retro-fitting anything is never as good as designing it to fit in the first place. A development in Derby has incorporated PV within the construction and, I have to admit, it looks neat.

So, I don’t think PV’s for me, but it might be for you. There is much to think about. And don’t be swayed by the door-step salesman. Do your homework.

Posted in Building Surveying, Construction, Project Management, Property Management, Quantity Surveying, Transition | 1 Comment »

Why a surveyor should appraise your draft lease

June 1st, 2011

A property lawyer challenged me recently to explain how a surveyor could add to his legal advice for a tenant taking a new lease.

I explained that it’s not until you try to apply some of the clauses to practical situations that you realise just how unreasonable, unworkable and inadequate some lease are. It’s the experience of using them that a surveyor can bring to the pre-lease negotiations.

All too often leases are drafted and negotiated between lawyers with little regard for the intentions of the parties. And inexperienced tenants expect their lawyer (if they have one) to protect them and the lease to include the promises made by the letting agent when he was closing the deal.

But all too frequently historic precedent documents or ‘standard leases’ are regurgitated regardless of the nature, age, location and condition of the building or the lease term. I believe it’s not enough to insert the ‘agreed’ Heads of Terms and leave it at that. They need to be put in context of both parties’ intentions, the whole lease and the particular building.

Dilapidation claims relate mainly to: Standard of repair, cleaning and redecoration, reinstatement of alterations, landlord’s fixtures and fittings and loss of rent.

I’ve seen covenants fit for a property in Mayfair applied to a run-down tin shed

Repairing covenants vary greatly. I’ve seen covenants fit for a property in Mayfair applied to a run-down tin shed on an industrial estate.

I’ve heard it said “The rent is low to reflect its condition” and then torrentially worded repairing clauses applied far exceeding the reasonable intentions of the parties.

A short lease on a nearly new office building required the Tenant to clean all the brickwork and concrete at the end of the term. How can that be reasonable? How often are building facades normally cleaned? What would be the loss if it wasn’t? A specific requirement to remove any graffiti, paint, oil or grease, or such like would have been more appropriate.

On the other hand cladding manufacturers specify cleaning and repainting regimes for maintenance of their cladding. This should be covered specifically, but never is.

Decoration clauses are frequently inappropriate. I’ve yet to see the wallpaper, graining and French polishing referred-to in the lease for an engineering workshop.

I’m not just suggesting ways to protect the tenant.

How can the Landlord’s surveyor know whether the Tenant has made alterations or removed Fixtures and Fittings without a record attached to the lease.

And why would a landlord want to relieve his tenant from the obligation to redecorate internally at the end of his lease because he’s done it in 12 months previously? The Landlord is going to expect the place clean and freshly painted.

An experienced surveyor understands the financial implications to both parties of these ‘throw-away’ clauses included in leases and can bring some common sense to the drafting

Posted in Building Surveying, Dilapidations, Lease advice, Property Management, Quantity Surveying, Uncategorized | No Comments »

Business Advice for the Third Sector – ProHelp

May 1st, 2011

Last year community groups in the East Midlands benefitted by £338,000 worth of top quality professional advice in support of their organisations.

Derbyshire groups alone received over £60,000.

The Landlord was prompted to refurbish all three floors for Derbyshire Carers

The services are provided free by local professionals through ProHelp, an organisation under the Business in the Community banner, and are available to any Community Group or Charity with a qualifying requirement.

Applying is dead simple. An initial phone call, a meeting to chat about your organisation and a short application form is usually all it takes. There’s no mountain of paperwork to wade through, no deadlines to meet, and a decision is usually made within days rather than months.

Property advice is always in demand. From surveys and lease advice at one end of the spectrum to feasibility studies for construction projects and lottery bids at the other; Surveyors, Architects and Engineers are always kept busy.

Not only that, Derby ProHelp has recently recruited an Environmental specialist.

Lawyers and Accountants advise on the likes of Charitable Status, Incorporation, Employment and Business Plans, indeed almost anything, except disputes.

As the cuts bite and charities become pressed for funds, more are becoming ‘business savvy’; they’re into Marketing and everything that goes with it.

Derby ProHelp members can provide Marketing and PR advice as well as Graphic Designers, IT Consultants and Web experts.

Not only does ProHelp provide charities with a valuable resource ProHelp also provides the professionals with a valuable networking environment in which they can demonstrate their skills and expertise to their peers and build relationships that transfer to their business life.

The commitment is not great; you decide how much time you can afford. Meetings are quarterly and are short and to the point. Projects vary and are rewarding and are worth far more to the organisations than the cost in time to the professionals.

So if you work with an organisation that could use some free advice or if you would like to find out more about joining as a professional checkout the ProHelp web site at www.prohelp.org.uk or Facebook East Midlands ProHelp.

Posted in Building Surveying, Dilapidations, Lease advice | 1 Comment »

Dilapidation Claims – A Tenant’s Nightmare and How to Reduce Them

April 6th, 2011

Tenants of commercial property are in for huge unexpected bills when their lease ends.

Recent figures published by The Royal Institution of Chartered Surveyors’ Building Cost Information Service showed lease-end Dilapidation Claims of more than a year’s rent are common.

The BCIS survey revealed average settlement figures of £9.54/ft² for Offices, £7.27/ft² for Industrial Units and £21.54/ft²for Retail premises.

That equates to £19k on a 2,000ft² Office building, £36k on a 5,000ft² Industrial Unit and £16k on a 750ft² Retail Shop. And those are settlement figures!

Worryingly, initial claims were, on average, 100% higher than the settlement figures!

Dilapidation Claims are, in effect, Damages Claims against the Tenant for not complying with the repairing obligations in the lease.

Dilapidations is a complex and contentious subject

But it doesn’t stop there. Claims can include the cost of cleaning and redecoration, stripping-out alterations, reinstatement works and the rent lost whilst the work is being done.

To add insult to injury, the Landlord can usually claim his surveyors fees and lawyer’s fees in making the claim too.

If the claims were fair and the money was spent on the buildings there could be little complaint. But Landlords frequently pocket the money and leave the mess for the next Tenant to sort out. Make sure that next Tenant isn’t you.

Dilapidations is a complex and contentious subject. The RICS has published a lengthy Dilapidations Guidance Note for surveyors and the Property Litigation Association has produced a Dilapidation Protocol for managing disputes. They both aim to engender an atmosphere of ‘fairness’, ‘professionalism’ and ‘cooperation’ in the preparation and management of claims.

Sadly, Landlords’ claims continue to be massively overstated. Recently we negotiated a £42,000 claim down to £15,000. The ‘tin shed’ unit was only 3,000ft²on a three-year term; it had hardly been used and had been left decorated, clean and tidy.

So how can you avoid such claims?

Ideally take action before you sign-up. Use a lawyer, but not without an experienced dilapidations surveyor too.

The surveyor will check out the building and the proposed lease terms to make sure you’re not walking in to a claim at ‘Day One’.

The premises should be in the condition the lease says you should leave it. If it’s not there are ways round that.

If it’s an old industrial unit on a 3-year term avoid a lease that would suit a 50-year term on a retail store in Knightsbridge.

The terms should be appropriate. Don’t be fobbed-off by ‘this is our Standard lease’. There is no such thing. Just like there’s no such thing as a ‘Standard Building’ or a ‘Standard Landlord’ or a ‘Standard Tenant’. Everything is negotiable.

If all that’s too late, your lease is at an end and you have a claim, use a specialist dilapidations surveyor. They’re usually Chartered Quantity Surveyors or Building Surveyors with additional training and experience in dilapidations. They will save you £OOOs.

Posted in Building Surveying, Dilapidations, Lease advice, Quantity Surveying | No Comments »

Get Pre-Lease advice to avoid the Dilapidations Trap

March 8th, 2011

Having been caught-out by a dilapidations claim on a previous short let a client turned to me for Pre-Lease Advice on his latest property deal.

A rather run-down unit was the subject of his attention; the previous tenant had ‘gone bust’ leaving it full of junk and in right state.

Though not in the best part of town, the location suited him.

Before surveying the unit I read the proposed lease. It was clear that the terms on offer were inappropriate; they would have suited a long lease on a property in Mayfair or Knightsbridge.

This was a one year lease on ‘Full Repairing’ terms. On that basis the dilapidations claim at the end of the year could amount to £20k or more; nearly three times the rent!

When the Landlord showed me the unit he agreed that the terms were unreasonable for such a poor property. He said his lawyer had advised him to go with it and try and catch the other side out.

It just goes to show, it doesn’t matter what you might agree with the Landlord it’s so important to check the draft lease before you agree to anything. Everything you agree needs to be written down and be part of the lease.

We got terms changed, of course, but it just goes to show that you can’t trust anyone!

So get advice from a surveyor who knows the rules of the game to avoid being caught in the dilapidations trap.

Posted in Building Surveying, Dilapidations, Lease advice | No Comments »

Black Mould

February 14th, 2011

Black mould can be a constant source of distress to many homeowners.

It is especially common in older properties, which are poorly insulated and ventilated and which have been ‘modernised’ to provide central heating and showers, draught stripping and double glazing.

Black mould on cold surfaces

Black mould normally occurs due to condensation; that is where warm, moisture-laden air condensates on cold surfaces creating a damp environment in which the mould can grow.

Bathrooms, bedrooms and kitchens are the most common rooms to suffer and small bungalows or big old houses can suffer in equal measure.

There is no single cure. Each incident must be considered on its merits but the main requirements are:

Good extract ventilation to remove the moisture laden air quickly
Good insulation to prevent wall surfaces from getting too cold
Good heating to warm wall surfaces

A common fault is that bathroom fans are often undersized or linked to the light switch. This is a mistake, they need to be sized to extract the steam quickly, not just to provide background ventilation and they need their own switch so they can operate when the light is switched-off.

Bathrooms should also be ‘overheated’. Don’t be afraid of installing a large heated towel-rail radiator and make sure it’s free from any thermostatic controls.

For further information and advice contact Chris Mills on 01332 603000.

Posted in Building Surveying, Damp | 2 Comments »

Builders Build; Surveyors Survey

January 31st, 2011

The roof is sound but water leaks through erroded joints in the stone parapet

Damp is the enemy of buildings. While it stays outside it is largely ignored but when it leaks inside panic sets in.

I was called recently to a delightful Georgian house on the fringe of the city centre. Water was pouring-in through the ceiling in two rooms and other rooms were slightly affected.

Some years ago a roofer had advised the owner to re-roof the property but, inspite of subsequent ‘repairs’, the leaks have persisted.

I checked-out the roof; it was an OK job, not the best, but it certainly wasn’t the cause of her leaks.

It took only a few minutes to identify the perished stonework in the parapet wall as the culprit. Joints are open and stones are badly eroded.

I know a good local builder with some exellent stone masons who I know will be just right for the job.

It’s ‘Horses for Courses’.

A roofer knows about roofs; a mason can build you a wall, but rarely do tradesmen have the all-round knowledge required to cross the boundaries of their trade; an expert surveyor does!

Posted in Damp | No Comments »

The Last Staw!

December 14th, 2010

There was a first for me last week in more years than I care to admit to as a surveyor.

The call came from a client in North Derbyshire with a modern house on a large estate. Tiles were falling off his bathroom wall and the room was full of flies. His wife and daughter were giving him grief because they couldn’t use the shower.

It was clear that water from the shower had got through the seal around the bath edge and soaked into the wall. The paper face on the board beneath (plasterboard I first thought) had disintegrated and turned into a black ‘mush’ leaving the tiling with nothing to stick to.

But what about all the flies? Dozens of very tiny midges. Where were they coming from?

Removing the bath panel the floor looked more like a hen house; straw everywhere. It wasn’t plasterboard at all, it was a straw-board partition! Clearly, the moisture had caused the straw to decompose; it was like having a compost heap for a wall, hence the infestation of flies, breeding in the ‘compost’.

There was no option but to tear the wall down and rebuild it in moisture resistant board.

The wall was rebuilt, retiled and redecorated in a fortnight with smiles all round.

Posted in Building Surveying, Damp | No Comments »

Demolition Sheffield

October 29th, 2010

There’s a tendency for some to guard our ‘Heritage’ in the mistaken belief that every old building should be preserved just because it’s old.

Granted, ‘fashionable’ planning polices of the day have resulted in swathes of ill-conceived demolition. The heart and the heritage have been torn from so many of our inner cities, to be replaced with faceless glass and tin-shed shopping centres.

Will future generations bemoan their passing? I think not.

But dying industries have left industrial conurbations with acres of redundant industrial buildings, dinosaurs, of no viable use and of no architectural merit. Preservation is not an option; they are ripe for redevelopment.

One such is a site in Sheffield where we are project managing the redevelopment for a national developer.

An old tool-making factory was to be demolished beside a busy main road and could have distracted drivers for weeks.

To avoid that, the facade was retained to hide the demolition going on behind. Then, early, one wet Sunday morning, the explosive boys worked their magic and felled the front in one fell swoop.

Check it out at Factory demolition

Posted in Construction, Project Management | No Comments »