How far in advance 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 that need to be taken to plan ahead with certainty?
These were two of the main questions asked at a recent meeting with a board of directors responsible for a block of 50 flats in London.
With regard to how far in advance you should plan, a general recommendation is at least 12 months at the absolute minimum, depending on:
- The condition of the building
- The type of repairs required
- Urgency of works
- The costs involved
The answers are very much related to how well the building has been managed and maintained over the past few maintenance cycles.
First, it is 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 solely focus on 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 important. If a firm is expensive and reputable, it is usually for a reason. It is important to get a feel for the company’s passion, its past and its drivers. The work will involve a long-term relationship and you need to be confident you have chosen the right professionals.
The surveyor will then carry out a detailed survey of the building and gather any necessary historic information on past works, the property in general and any known problems before preparing and issuing a Planned Maintenance Programme (PMP).
A PMP will record the condition of the building, including mechanical and electrical elements, and will set out the works required together with associated costs. The works can be allocated in order of priority over a five- to 10-year programme.
It is vital to get commitment from all stakeholders, and everyone must fully understand the contents of the PMP.
This is normally done by holding face-to-face meetings with the board of directors, the property managers and the surveyors so the plan can be discussed in detail and ensure the methodology and costs are fully understood.
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
- Start the Section 20 consultation process – serve the Notice of Intention (this can take around four months)
- Prepare tender documents with detailed specifications
- Vet and invite at least four to five qualified contractors to tender
- Carry out a detailed tender-analysis exercise
- Complete the Section 20 consultation process
- Appoint the contractors
- Plan the works for the most appropriate time of the year
- Ensure the contractors can start work at the agreed time
The board of the block in question had inherited responsibility for a building that had been neglected for 10 years and requires £500,000 spending on repairing it.
The new board is in a much stronger position than its predecessor to make informed decisions because it has the support of an experienced managing agent and that all-important PMP. Members now know exactly what needs to be done and can plan ahead with certainty.
Damien Finnegan is managing director of Finnegan Associates.