Planning for Maintenance is the key to successfully funding Major Works

Damien Finnegan, Managing Director of Finnegan Property Services, answers some key questions on planning and funding Major Works.

How far ahead should property managers and boards of directors plan for major works to make sure they can collect the funds needed and what are the basic steps which need to be taken to plan ahead with certainty?

How far in advance should you plan?

These are some of the questions recently asked at a meeting with a board of directors responsible for a block of 50 flats in London.

So, to answer some of the questions.

With regard to how far in advance you should plan for Major Works, I would generally recommend at least 12-24 months absolute minimum, depending on:

  • The condition of the building
  • The type of repairs required
  • Urgency of works and
  • The costs involved

The answers to the above are very much related to how well the building has been managed and maintained over the previous 10-15 years plus.

Ascertain the building’s condition and the necessary repairs

First of all, it is so important to ascertain the building’s condition and the necessary repairs. The board of directors needs to start by appointing the right professional team, for example, Managing Agents, Surveyors etc.

Appointing professionals should not be all about getting the cheapest fee. It should be more about what service can be guaranteed for the fee. You get what you pay for but only if you fully understand what you are getting in the first place. Due-diligence is so important. If a firm is expensive and reputable, it is usually for a reason. It is so important to get a feel for the company’s passion, their past and their drivers. Why do they do what they do? They need to be able to make a difference and it is a long term relationship so you need to be reasonably certain that you have chosen the right professionals. If you are confident with the answers and the follow up references, then don’t go with the cheapest, go with the firm who are the strongest over all.

The surveyor will then carry out a detailed survey of the building and will gather any necessary historic information on past works and problems before preparing and issuing a Planned Maintenance Programme which records the condition of the building (it can include mechanical and electrical too) and sets out the works required together with associated costs. The works can be allocated in order of priority and practicality over a 5 to 10 year programme. This is the starting point for any project.

Implement the plan

Then, in order to implement the plan, it is important to get commitment from all stakeholders and, in order to achieve this, everyone must fully understand the contents of the Planned Maintenance Programme and the recommendations within.

Once everyone is committed to delivering the plan and the funding is available or allocated, the next steps are to:

  • Confirm the necessary funds are available – Collection can run concurrent with the steps below.
  • Start the section 20 consultation process – Serve the Notice of Intention (this can take around four months)
  • Prepare tender documents with appropriately detailed specifications
  • Vet and invite at least four to five suitably qualified contractors to tender
  • Tender the works and carry out a detailed tender analysis exercise
  • Complete the section 20 consultation process
  • Confirm the necessary funds are available and appoint the contractors
  • Plan the works for the most appropriate time of the year, ie external works are best done between March and October
  • Ensure the contractors are able to start work at the required time and within an agreed programme
  • Start the works and manage to completion

The board of the block in question had inherited responsibility for a building that had been neglected for the past 10 years and requires circa £500,000 spending on repairing it but they only have 25 per cent of the funding so far.

Unlike the previous board, the new one is in a much stronger position to make informed decisions. This is because they have the support of a suitably experienced Managing Agent and Surveyor and that all-important Planned Maintenance Programme. They now know exactly what needs to be done, and the funding required, over the next 10 years so they can plan ahead with certainty.

Damien Finnegan is the Managing Director of Finnegan Property Services, chartered surveyors serving London and the South East.