To help landlords and managing agents plan and budget for repairs, it is good practise in property management to ensure that PPM (Pre-Planned Maintenance) schedules are in place for day to day and reoccurring contractors, alongside CapEx calculators which can help to budget for any big ticket items such as roofs, carpets and lift upgrades.
Often these calculators are used to ensure that sufficient funds are being collected into the reserve accounts and sinking funds (where the lease allows for this) to avoid unnecessarily large invoices, which can have a huge impact on leaseholders.
Risk Assessments and Method Statements: Safety First
Risk Assessments are used to establish whether contractors have successfully identified the various risks they may encounter and the control measures that have been implemented to remove or reduce those risks.
In addition to the general risks posed by the nature of the work itself, when carrying out works in residential properties it’s important that contractors recognise the various risks they may be faced with which they may not have any direct control over, such as the possibility of residents entering the work area or any obstructions which may be caused.
Often overseeing high risk activities such as working at height or with hot equipment, contractors should be able to evidence the safe system of work they employ, specific to the task at hand. This is provided in the form of a Method Statement.
A contractor’s Method Statement will provide a full breakdown of each task they will be undertaking and the actions they will take to mitigate any risks which they either inevitable will, or potentially could, encounter.
As each property is different, Landlords and Agents should ensure that both their Risk Assessments and Method Statements are site-specific. They should also be reviewed by a competent person, and somebody who is familiar with the location of the works.
Section 20: One Must Never Forget
When planning works (either for planned or reactive repairs) it is crucial to consider the Section 20 Procedure Consultation for Major Works.
The Section 20 consultation procedure is triggered when any works will cost more than £250 for any one leaseholder (including any VAT which may be added to the costs of the work). Additionally, any properties which have Service Charge Apportionments that vary between the apartments would need to consider that this trigger applies if any one apartment pays more than £250, therefore it is important in cases like this that the threshold for the Consultations is identified from the offset to avoid inadvertently breaching the Section 20 process. Any breaches may result in the Landlord or Management Company being unable to recover the full costs of the works.
Where properties have a high number of units contributing to the Service Charge it is less common that they are required to undertake the Section 20 procedure due to having a larger number of leaseholders to share the costs, but with smaller properties it is more common that the procedure is triggered, as the costs is shared over fewer leaseholders.
Whilst most people would be led to believe that the smaller properties are easier to manage and maintain, this is not always the case. It takes considerably more forward-planning to reduce the number of any reactive repairs which may trigger the consultation procedures, as well as careful budgeting to ensure that there are funds available to carry out works when they are needed.
Impact
There are many different risks and areas of concern that Managing Agents and Landlords must consider when running a well-functioning maintenance and management regime. The implications of poor planning, contractor vetting and risk management can be detrimental to the management of any property. It’s likely to result in delays with works being carried out and increases the likelihood of incurring further costs.
In addition, failure to consider and comply with the Section 20 consultation procedure could add further complications if repairs cannot be carried out in a timely manner due to consultation time frames, or the financial impact which may arise if the consultation procedure is not carried out correctly.
The overall impact on the property could be significant when the process for proper planning and management of maintenance, repairs and major works is not in place.
