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.