The top 10 block management oversights on major works

Damien Finnegan, Managing Director of Finnegan Property Services looks at the most common obstacles to overcome in order to ensure a successful major works project and highlights the importance of planning well in advance.

When the management of a large residential block in London realised that the building needed serious attention, they were faced with the reality of having no cash in the reserves for major works. They had failed to plan ahead.

Contrast this with another multi-tenanted block which had a proper planned maintenance programme. The management team has full control of the budget and their building. This means they are in a better position to protect the investment and legal obligations of the stakeholders they represent.

These are the two extreme scenarios. It’s worth pointing out that, for those that don’t plan ahead and have no financial reserves , it is never too late to start!

It goes without saying that all mansion blocks will require major works (whether internally or externally) every 5 to 10 years rolling. For it all to happen it is absolutely essential to plan well ahead, select a professional management team with the right skills and listen to the expert advice.

Allow enough time for the statutory Section 20 consultations and make sure you have a surveyor managing the project who has a sound track record.

If all this sounds obvious then it means you are on the road to success. Unfortunately, there are many cases where the obvious is overlooked or ignored.

Here are the 10 most common oversights when preparing for major works.

1. Not having a Planned Maintenance Programme (PMP) or Capex Plan

When you own or manage a building there is no escaping the fact that it will need to be maintained and repaired to keep it in prime condition and preserve its value. Of course, this all costs money. If you procrastinate over repairs, the worse they will become, and the more expensive the repairs will be to correct.
Having a PMP/Capex Plan enables you to control the situation by giving you a planned schedule of repairs, over a number of years, allowing you to set realistic budgets. However, if the building has had years of insufficient investment and lack of maintenance, the plan will be front-loaded to an extent. Demands will reduce over time, as long as the plan is followed, reviewed and reassessed, as and when conditions change, with works being are undertaken.

The plan will include a detailed assessment by a building surveyor of confirm the condition of the building or site, from roofs, masonry, windows and doors to services and utilities.
The surveyor records the condition of each building element, gives a priority rating and allocates a cost, before grouping works into years and phases in the plan. The grouping and allocation of works is usually dictated by urgency and budget available. A PMP/Capex Plan should also include an assessment of mechanical and electrical plant by an approved M&E consultant.
By having a proper prioritised plan of works and associated expenditure, property managers and stakeholder representatives can budget more accurately and effectively, setting reliable levels of service charge and helping to avoid nasty surprises and escalating costs.

2. Not seeking professional advice

Everybody is keen to save money and often professional fees might appear to be an unnecessary expense. However, it is often far more expensive in the longer term to proceed with the wrong works, or do the works in the wrong way.

It is therefore vital to ensure that the works being proposed are reasonable and carefully considered. Appointing experienced and appropriate professionals from the outset is invaluable in considering the timing and extent of the works required.

As a minimum, the following is essential:

  • An assessment of the building and a 5-10-year Maintenance Plan
  • A Schedule of Works, Specification and Tender Pack
  • A list of Approved Contractors
  • A Competitive Tender Procedure
  • A Tender Evaluation Procedure
  • A Contract (JCT or similar)

3. Not considering who is going to run the project

While having a contract administrator will have an associated cost, this is more than off-set by the savings that can be gained through the application of professional knowledge and experience.

Without it, it is difficult to challenge and probe the contractor on the standard and pace of the work. An experienced professional will recognise and rebut excuses and be able to confidently demand that works be undertaken as appropriate. They will be looking ahead and proactively planning for the next stage, ensuring that required materials and labour are properly planned to keep the project progressing.

They can offer practical advice, problem solving and the ability to quickly devise suitable alternatives/solutions to unforeseen issues that arise. Also, by having an oversight of the budget, they can evaluate variations and requests for extra time objectively to ensure the best value.

Building work is a complex process, with plenty of scope for things to go wrong. A Building Surveyor with the relevant experience is best placed to reduce the risks, oversee and administer the works and give you invaluable assistance and expertise.

4. Not having any system for making client decisions quickly

Groups of resident directors need to consider how they will make decisions during the whole process and as the works progress. Delays in decisions, or an unplanned late change of direction, can sometimes lead to unexpected claims for additional costs by the contractor for time wasted. This can increase contractor’s costs, which contractors will try to recover.

Where there are several directors, forming a working group with a single spokesperson appointed to deal with the surveyor is ideal as it facilitates efficient communication and greater success.

5. Not seeking legal advice on Section 20 consultations

Before any commencement of work it is vital to make sure that the proposals are acceptable under the terms of the lease. If the works are likely to contravene the lease covenants, the freeholder can be open to challenges from lessees.

The Section 20 consultation process is very complex and is increasingly the subject of disputes and litigation. It is therefore advisable to consult a solicitor and chartered surveyor to avoid mistakes.

If these procedures are not followed in detail, it may affect the ability to recover the cost of works. If Section 20 consultation is not planned properly it can cause considerable delays.

6. Not selecting the right contractor

Naturally, the first step with any maintenance contractors is to undertake basic checks on these companies before spending hours showing them around the building and briefing them on the job.

Here are some examples of what you need to look for:

How long has the company been established? Ask to see a copy of the Company Registration Certificate.
Track record and relevant experience? Evidence of success in completing building project of similar nature and size – Seek relevant references.
Are they members of the Painting and Decorating Association? Check the website for member companies at www.paintingdecoratingassociation.co.uk or phone them on 024 7635 3776.
If structural work is involved, find out if they are members of the Federation of Master Builders – www.fmb.org.uk or call 020 76357583.
Do they offer recognised insurance-backed warranty or guarantees? Request a copy of the certificate.
For larger jobs, are they accredited by Construction Line, the UK’s largest register of qualified construction contractors and consultants?
Are they accredited by CHAS (Construction Health and Safety Forum). This does not prove that they are a good contractor, but it does show that they have made a substantial investment in H&S training and have reached a very high standard.
Can they supply testimonials and references?
Do they hold proper insurances? They should have at least £2 million of public liability. Request a copy of the certificate.

7. Not getting a detailed specification to compare estimates accurately

This stage is often bypassed by going direct to contractors for prices or using a basic list of works. But, without a detailed and technical specification, it’s impossible to obtain and compare the prices accurately – on a like-for-like basis – as they will all differ in some way.

Preparing a detailed specification means that all the unique characteristics of your building will be taken into account and therefore a realistic price for your particular project can be reached. The specification also provides for firm commitments on prices, and can include estimated items of work for contingency planning. This means you are not left in a weaker bargaining position by having to get prices for contingency or provisional items during the project, when the contractor is not in a competitive situation.

For smaller jobs, it is possible to obtain quotations directly from the builder/decorator based on a brief schedule of works. A reputable builder will be able to understand and price appropriately.

The tender process needs to be managed properly so that all the quotations are obtained on the same basis and appropriately scrutinised and reported on.

Decorating work will vary enormously, depending on the condition of the existing coatings, the type of substrate, the intended new coatings, the condition of the surface etc. Manufacturers state that, in normal circumstances, re-coat times should be approximately 3-5 years for standard paints, and if you stick to this you should have a good ‘canvas’ to work on. This can be increased to up to 10 years for highly specialised coatings, although these invariably cost much more and require additional preparation and you can soon lose the apparent cost advantage of not having to decorate so often.

Without wishing to state the obvious, old paintwork on timber surfaces should be washed down to remove any dirt and grease, all loose paintwork removed by stripping, the edges rubbed down to a smooth surface, bare areas primed with suitable primer, and either one or two undercoats applied, followed by either one or two top coats of paint, typically gloss, to provide a hard-wearing and durable finish.

For masonry work, two coats would normally be sufficient, although three coats can be required in some circumstances.

An experienced Building Surveyor will be able to advise on an approximate contract period. However, it would be foolhardy to lay down a precise time limit for a job as part of a tender unless it really is critical. Far better that the contractor works out the most efficient and cost-effective method of working, given the resources at their disposal, and submits a programme of works as part of their tender submission. In simple terms, one coat needs to dry before the next is applied.

8. Not planning and programming ahead

The preparatory phases have a significant impact on the overall timescales of a project. There’s a lot to be done before the contractor starts on-site. Time must be
allocated for Section 20 processes to be administered and funds collected.

On receiving tenders allow sufficient time for queries to be answered and for any cost-saving exercises that may be needed.

Having identified a preferred contractor, time needs to be set aside for pre-contract negotiations; only when all these stages are complete can a contractor give a firm commitment for a start date.

The following is recommended when planning for works:

  • For a small to medium-sized, reasonably well-planned project, it is normal practice (assuming funds are in place) to allow minimum 4-6 months for pre-contract stage ie. Specification, tendering and Section 20 notices to expire before starting works on site.
  • For larger projects, we recommend 8-12 months of planning in order to minimise the risks and fulfil appropriate consultation and collection of any additional funds.
  • While internal/communal works can be undertaken all year round, the optimum time of year to undertake external projects is between March and September/October.

9. Not understanding the Client’s obligations under the Construction Design and Management Regulations 2015

Health and safety are an essential part of all building projects and are required by law under the Health & Safety Executive’s CDM (Construction, Designs and Management) Regulations 2015. Don’t make the mistake of assuming that the surveyor or project manager will fulfil these obligations. The responsibility for health and safety lies squarely with the client – landlord, block directors and managing agents – whoever is commissioning the work. The regulations stipulate that the client must make sure that health and safety is properly planned and managed from conception to completion of the project. This includes appointing people with the right skills and providing pre-construction information to the project team. Where there will be more than one contractor on site, the client must appoint a principal designer and principal contractor. The principal designer is responsible for planning, managing and co-ordinating the designs and they will be able to spot potential problems early on, such as the presence of asbestos, enabling the client to plan and budget accordingly. The principal contractor plans, manages and co-ordinates all aspects of the construction work.

In addition, if the work is likely to exceed 30 working days, involve more than 20 people working simultaneously at any point in the project, or exceed 500 person days, then the client must notify the HSE.

Finally, the client should keep a health and safety file which will help to manage any risks involved in maintenance, construction or repair work in future. The principal designer or principal contractor will be able to supply this.

10. Not enough Security

Don’t forget to quiz any contractor on how they plan to preserve your block’s security. This is often overlooked and can put residents at enormous risk of burglary.

Access ladders are easy to remove and secure at night. Hoardings should be erected around scaffolding and the scaffolding itself enclosed with netting or Monarflex sheeting.

External lighting of the scaffolding and the use of a proprietary scaffold alarm system, of which there are many on the market, also heighten security to the building during works.

Safeguarding the residents is of upmost importance and is all too often not given the appropriate consideration. All residents should notify their insurers and the contractors should provide specific procedures for managing access and maintaining controls during the out-of-hours times.

These are just some of the common pitfalls. Major Works are expensive and, in order to save time and reduce risk (unnecessary expense), it is so important to employ a holistic approach and plan well in advance. A team with the relevant experience will make sure you have everything covered.

Fail to Plan, Plan to Fail!

Damien Finnegan is the founder and Managing Director of Finnegan Property Services, a Chartered Building Surveyors based in Ealing.   Damien started his career in property and construction in the 1990's, and has since worked on some of London's prime property and gained extensive experience in acquisition, development and maintenance of high end residential properties.