Get your paperwork in order . 18 th May 2017 Trevor Rushton FRICS - - PowerPoint PPT Presentation

Get your paperwork in order.

18th May 2017

Trevor Rushton FRICS FCABE ACI Arb John 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

• rganisation 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
• r tenants but Landlord often retains

responsibility for structure and common parts and services

• The managing agent - acts on behalf of the
• wner 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
• r 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

• r 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

• f 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

• nly 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

• perate 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 Performance Forfeiture Recovery as damages Recovery 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.