get your paperwork in order - property managers association · get your paperwork in order •...
TRANSCRIPT
Get your paperwork in order.18th May 2017
Trevor Rushton FRICS FCABE ACI ArbJohn Blomeley BSc MRICS
Agenda.
Get your paperwork in order
• Asbestos
• EPCs and MEES
• Fire Safety
• Accessibility
• M&E services
• Dilapidations
• Summary
• Questions
Introduction.
Get Your Paperwork In Order
• Avoid problems
• Save time
• Save money
Typically linked to:
• Statutory Requirements
- Potential legal and cost consequences,
reputation damage
• Good Estate Management
- financial forward planning
Asbestos.
• Carcinogenic - Mesothelioma & other respiratory diseases
• Could be in any pre 2000 building
• Frequently used in a variety of building materials/components
- floor & ceiling tiles; boards of various densities; fire protection materials; textured
and spray coatings, wrapped insulation on pipes, within boilers and other
services
• Frequently found whole or as debris left behind layers of shop fitting
Control of Asbestos Regulations 2012 - all non-domestic buildings
Penalties
• Enforced by HSE and Local Authorities
• Fines limited to maximum of £20k in Magistrates Court but in Crown Court unlimited and prison sentences are an option.
• Recent court guidance for fine to be based on a proportion of the annual turnover of a company or of an individual’s net earnings.
Asbestos.
Duty Holder
Owner of the premises or the person or organisation with clear responsibility for the maintenance or repair of premises e.g. via tenancy agreement or contract – so typically the occupier
• In multi-occupancy premises - The tenant
or tenants but Landlord often retains
responsibility for structure and common
parts and services
• The managing agent - acts on behalf of the
owner but does not assume the owner’s
duties in law. The ultimate responsibility
remains with the owner and/or occupier
• Unoccupied – the person in control of the
premises
• Insolvency or Bankruptcy – liquidator or
receiver.
Asbestos.
Required Documents - Management Plan
• Up-to-date record of the location and condition of ACMs
or presumed ACMs
• Assessment of the risk (Material and Condition)
• Detail how the risk is going to be managed
• Reviewing and monitoring the plan
• Arrangements (and programme) for putting it in place
• System for providing information to others
• Asbestos Report - Management or Refurbishment Survey
according to intended purpose
• Asbestos Register
• Other Documents
MEES.
Minimum Energy Efficiency Standards
- a potential minefield?
• From EU directives via the Energy Act 2011 but
the minimum level was not specified
• Regulations will apply to all new lettings from
1st April 2018 only where the building/demise
has an EPC
• Compliance required no later than 6 months
after granting of tenancy
• The regulations will apply to the non-domestic
private rented sector in England and Wales
• The regulations will exclude from this
definition any property which is let on a
tenancy granted for a term of 6 months or less
and any property let on a tenancy for 99 years
or more.
Conclusion – There are very few properties that
won’t have to comply
MEES.
Which buildings will require upgrading
to comply?
• From 1st April 2018 all new lettings with an EPC lower than an E
• From 1st April 2023 all buildings / demises with an EPC lower than an E even if they have existing leases or are vacant
Guidance published in February 2017:• Dispels the myth that all Listed buildings are
exempt from the MEES Regulations• Confirms that permitting occupation of a sub-
standard property by licence or under an agreement for a lease is unlikely to trigger MEES compliance
• Make it clear that a landlord is expected to do the energy efficiency improvement works that satisfy the ''7 year payback'' test even if the landlord has no funds to do the works and cannot borrow sufficient money to pay for them
MEES.
Current market
This is already affecting the sale of property
with F or G ratings
Some EPCs miss an E rating due to poor
data collection when the EPC was compiled
but re-doing the EPC properly could
produce a worse rating due to the new EPC
being based on newer Part L standards
We are often asked what an owner needs
to do to change and F or G rating to an E
In our experience, having produced over
1,000 EPCs in a period of nearly 10 years,
this is not a simple question to answer…
MEES.
Obstacles to improving poor EPC ratings
• The original calculation file is not readily available to be examined
• Energy Assessors can download a file from the non-domestic EPC registry, but
the software to read this file has yet to be properly developed and it works less
than half of the time
• Even if the original Energy Assessor can be persuaded to hand over the software
file, there are 11 different software packages that could have been used to
generate an EPC
• Changes to the way the calculation software and input requirements have
evolved results in some data for newer software not being available in older
calculation files. Once this is put in the result may be worse
The way forward
Sell now or enter into long leases so the issue becomes someone else’s problem
Renew leases now so the requirement is pushed back to 2023
Commission a Level 5 EPC. Almost any building can be remodelled as a level 5 building and
achieve an improvement in rating due to the calculation engine being much more accurate
and making no assumptions about how the building is occupied and used.
Warning; level 5 EPCs can be expensive
Commission a new EPC by a reputable company and for a reasonable fee; don’t buy cheap as
the model probably won’t be accurate and may point to a requirement for more work than is
really necessary
Once you have your new EPC, ask the Assessor what changes are needed in order to achieve an
E rating
Review what changes may be required anyway such as a new roof, new glazing, new lighting,
new boilers and ask the Energy Assessor to model each change and see which ones make the
required difference
Once you have your shopping list, undertake financial calculations to establish whether each item
satisfies the 7 year payback rule. If it doesn’t, you don’t have to do the work
Buildings with an F or G rating can be let from April 2018 if it is not economic to improve them
MEES.
Fire Safety.
As an occupier and an employer you are
responsible for fire safety in business; you are the
‘responsible person’
You must appoint one or more ‘competent
persons’ - someone with enough training
and experience or knowledge to implement
these measures properly
The competent person must carry out a fire
risk assessment of the premises and it must
be reviewed regularly; you must keep a
written record of your fire risk assessment.
You must tell your staff about the risks that
have been identified, put in place and
maintain appropriate fire safety measures.
You must also plan for emergency and
provide staff with information, fire safety
instruction and training
Regulatory Reform (Fire Safety) Order 2005
Fire Safety.
Penalties and enforcement
You could be fined or go to prison if you don’t
follow fire safety regulations
Minor penalties = up to £5,000, major penalties
= unlimited fine and up to 2 years in prison
Local fire and rescue authorities can inspect
premises and issue fire safety notices telling you
about changes you need to make
An alterations notice can be issued if your
premises has a high safety risk
An enforcement notice is issued if the authority
finds a serious risk that is not being managed
and will stipulate what improvements are
needed and by when
A prohibition notice takes effect immediately if
the authority thinks the fire risk is so great that
the premises needs to be prohibited or restricted
Fire Safety.
To carry out a fire risk assessment
you must:
Identify the fire hazards
Identify the people at risk including
people with disabilities
Evaluate, remove or reduce the risks
Record your findings, prepare an
emergency plan and provide training
Review and update the fire risk
assessment regularly
If you don’t have the expertise or the time to
do the fire risk assessment in-house you can
appoint a ‘competent person’ to undertake
the assessment for you
Access Audits.
The Equality Act 2010
and the DDA 1995 (still applicable in Northern Ireland)
• First “reasonable step” in recognising
possible obstacles and devising solutions
• Tool to establish how well a building
performs in relation to access and ease
of use by a wide range of potential
users, including people with physical
mobility, cognitive and sensory
impairments
• Consider spending power of previously
excluded users
Majority of impairments are not visible and
only around 2% of disabled people use
wheelchairs
Accessibility is about more than wheelchair
access – eg
• Other mobility issues
• Visual impairment
• Hearing difficulties
• Touch sensitivity
Access Audits.
Access Audits.
Management and organisation of a building and the service provided from it can be reviewed to achieve maximum accessibility
An Access Audit can:
• Identify reasonable adjustments to be incorporated into future refurbishment, regular maintenance and budget planning for capital expenditure
• Help to gain consent for alterations, extensions and new build in compliance with Part M of the Building Regulations and assist with applications to the Lottery, National Heritage and other public funding bodies
• Help to avoid potential litigation for providing a worse service to a disabled customer
M&E.
Operation and Maintenance Manuals
What should a new building have on or shortly after handover?
• Building log book in compliance with CIBSE guidance
• Complete set of operation and maintenance documents (paper and electronic format)
• Complete set of as built drawings
Too often bulging operation and maintenance volumes are full of:
• Generic health and safety guidance, maintenance requirements and manufacturers’ data
But lack:
• Any instructions for building users as to how to operate the systems
• “As installed” drawings
• Commissioning information
• Testing and certification records
M&E.Statutory testing and certification of mechanical services
Typically required annually:
• Boilers
• Gas systems (appliances and pipework)
• Chillers (gas leakage and containing pressure vessels only)
• VRF/split systems (refrigerant leakage)
• Sprinklers
• Wet and dry risers
• Smoke handling systems (fans, motorised dampers,
automatic opening vents/windows)
• Domestic water hygiene
• Fixed wiring
• Fire Alarm
• Emergency Lighting
• Lightning Protection
Non-statutory testing and certification can be equally important
Such as:
• Controls
• Osmosis in water tanks
• Filter changing/cleaning frequency
• Lighting controls
• Infections in chilled water systems
Lifts
Warning - imminent change in standards
Replacement of EN81-1 and EN81-2 with EN81-20/50
New standard applies to new lifts that complete after 31st August 2017
The most important changes:
• Ventilation requirements
• Refuge spaces on the car roof
• Tools and monitoring
• Inspection controls in the pit
• Stronger doors
• Emergency lighting
Standard requires a full risk assessment by a competent person (lift maintainer) be undertaken
Failure to act on the findings has no specific penalty but could lead to prosecution in the event of an incident
M&E.
The Gas Safety (Installation and Use) Regulations 1998
General obligation to install and maintain gas systems in a safe manner/condition
CORGI replaced with the GasSafe register and certifies installers and maintainers
Covers:
• Boilers and catering appliances - must be serviced and certified annually by a GasSafe contractor
• Covers flues and ventilation
• Covers local pipework
• General obligation to maintain gas distribution pipework integrity, but no guidance
• No guidance at all for building operators regarding utility gas pipework (anything up to the meter). This pipework can be extensive in shopping centres
Not to be confused with…
M&E.
F-Gas Regulations The Fluorinated Greenhouse Gases Regulations 2015
Older gases such as R11 and R12 were
potentially lethal in the event of fire
The duty to keep and maintain the F-Gas log
rests with the owner/operator
Failure to maintain log book could result in
systems being shut down with no notice
and possibly prosecution
M&E.
Sprinklers
What are they for?
• “Sprinklers save lives”?
• Sprinklers are mostly specified to reduce the cost of damage caused by fires than to save lives
• No such thing as a “life safety” sprinkler installation but property protection systems can have “life safety” enhancements
• No qualifications needed to design a “life safety” sprinkler installation but you do require training and certification to design sprinklers to satisfy property insurers
• Sprinkler provisions don’t need to be reviewed routinely but do need to be considered each time an area is refitted
M&E.
Sprinklers
Sprinkler standards – confusion reigns
• Very few new sprinkler installations are
certified to current standards although
the comply with Building Regulations
• The risk assessment based nature of
modern building management requires
compliance with current standards
• Only LPCB are qualified for certification
for sprinkler system components i.e.
tanks, pumps, pipework, valves, sprinkler
heads so tend to be specified by insurers
M&E.
Electrical Systems
Electrical installations and equipment should
be checked, inspected and tested often
enough that there is little chance of
deterioration leading to danger.
Electrical Installation Inspections:
• Regular visual inspection
• Annual visual check by a competent
person
• Fixed wiring Periodic Inspection and
Testing, maximum period of 5years
• Test certificate and works completed
should be kept and recorded, if failures
are detected, these must be remedied as
soon as possible
M&E.
Electrical Systems
Emergency Lighting
• Daily emergency lighting inspection for central backup systems
• Monthly emergency lighting tests
• Annual full test
• Result must be recorded; if failures are detected they must be remedied as soon as possible
Portable Appliance Testing (PAT)
• Hand Held equipment – 6-12 months
• Portable/moveable equipment – 12-24 months
• Stationary and IT equipment – 24-48 months
M&E.
Fire detection & alarm systems
Weekly tests
• Test a manual call point during working hours to check that the control panel and alarm sounders operate satisfactorily
• Each week a different manual call point should be tested
Monthly tests
• Any automatically started generator used for the fire detection and fire alarm system should be tested
• Any vented batteries used as a standby power supply for the fire detection and fire alarm system inspected
Inspection and Servicing by a competent person
• Intervals based on risk assessment but should not exceed six months
• Log book recording all testing/inspections, faults and works completed on the system should be kept on site
M&E.
Interim v Terminal Dilapidations.
S.146
Specific
PerformanceForfeitureRecovery
as
damagesRecovery as
a debt NOT
damages
Jervis V Harris
(Landlord
Repairs)
S.147
counter
Tenant Repairs
Interim Schedule
Interim
Judgement
Courts
Settlement
Negotiate
Lease
End
Schedule?
Claim for Damages
Terminal
Dilapidations.
Current concerns – what constitutes Vacant Possession?
• Recent case law advises partitions may
be tenants chattels, which may void
vacant possession.
• Consider therefore undertaking a
dilapidations review in sufficient time to
allow you to undertake necessary works.
Dilapidations.
FRS102
• Supersedes FRS12
• FRS102 is the exchequer’s reporting standard for known liabilities
• It allows the known lability to be offset against tax
• As a lease is a contract requiring certain actions by the tenant (repairing,
decorating etc), the known cost of works can be included in an FRS102 declaration.
A provision is only recognised where:
• There is a legal obligation as a result of a past event
• Payment is probable, and
• The amount can be reliably estimated
• Specific requirements differ from typical dilapidations liability assessments
Dilapidations.
Get Your Paperwork In Order to:
Reduce risks and liabilities
Identify needs
Secure financial benefits
Implement good estate management
Plan closures and relocations
Ease lease-end negotiations
And don’t forget…
It needs to be an ongoing process
Summary.
Questions.
Clinic – at lunchtime and from 4.30.
Key topics include:
• Technical due diligence
• Building materials and defects
• Planning
• Legislation
• Insurance
• Landlord and tenant
• Dilapidations
• Party walls
• Rights to light
• Sustainability
Watts Pocket Handbook.
Thank you for your time.