6th May 2015

Martin Arnold 4 Gunnery Terrace T: 020-8317-7557 The Royal Arsenal F: 020-8317-7741 London E: general@martinarnold.co.uk SE18 6SW W: www.martinarnold.co.uk

Date:

Martin Arnold Role of independent external advisor (‘Expert’) to report to the Leaseholders’ and Tenants' Major Works Committee

London Borough of Lambeth

Invitation to Tender

Martin Arnold (MA) was founded by Jim Martin and Roger Arnold and opened for business on 1st November 1999

with a modest client base. Over the early years the Practice expanded and in 2002 the Practice moved into new

offices in The Royal Arsenal, to provide a platform for the business to grow and flourish. The Practice continues to

grow and we currently employ 70 Practice members. Our client list has grown significantly and diversely to include

a large number of residential, commercial, educational and leisure clients, as well a number of national developers.

From a mainly residential background our growth has seen the Practice move deeper into the leisure, commercial and education sectors which currently represents over 30% of our business. We are actively progressing into these markets as well as servicing and developing our traditional residential clients. Our regular growth has enabled us to retain and attract good quality experienced staff and reinforce our presence through the refurbishment of our new offices at 4 Gunnery Terrace, to maximise the benefits from the new Crossrail Station.

Primarily, our priority and growth is about quality, professionalism, opportunity and development, retaining existing clients as well as new markets, new clients and new sectors. We have an expert and professional group of Partners, supported by a diverse range of staff from training surveyors to members who have gained over 30 years’ experience, all contributing to our increased turnover and growth.

We offer a full complement of construction consultancy services and operate fully as a multi-disciplinary Practice. We have extensive experience in Project Management, Building Surveying, Architecture, Quantity Surveying and Cost Management, acting as Employer's Agent, Contract Administrator, Health & Safety and Environmental Services consultants. We use our skills, experience and expertise to provide a comprehensive and collaborative approach in delivering a quality level of service clients have come to expect on projects. Our focus is on programme delivery, cost control,

value and quality, centred around the goal of client satisfaction.

We live and work in a developing and evolving environment, we are always seeking new ways and services to provide our clients with a full 360 degree perspective on the project and the environment in which it takes place. The development of new skills and expertise is central to our mission as a modern, dynamic and innovative practice, centred upon a professional, conscientious and personable approach in our pursuit of best value, dedicated to attaining the highest standards by providing a superior quality of service to our clients, without compromise. We are members of and regulated by the Royal Institution of Chartered Surveyors (RICS) and we are ISO 9001 and 14001 accredited.

Throughout projects our emphasis will be on the frequency and quality of our communication; we adopt an open and transparent approach to ensure all stakeholders in a project are aware of expectations and to ensure that all parties can freely raise concerns or challenges at an early stage to maximise our ability to resolve issues.

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Background Information

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Partner Details

Richard Carter BSc (Hons) MSc (Proj Man) FRICS - Senior Partner

Richard Carter became a Chartered Building Surveyor in 2000 and

was later elected a Fellow of the RICS. Richard is an equity Partner

of the Practice and has the Partnership responsibility for

‘Quality’. Richard is an active member of various industry groups,

including a member of the Livery for the Worshipful Company.

He works in both residential refurbishment and new build, as well as

having specialist understanding of the leisure sector.

Roger Arnold BSc (Hons) RMaPS FRICS - Senior Partner

Roger Arnold is a founding Partner of the Practice and has been a

Chartered Building Surveyor since 1998. Roger was elected as a

Fellow of the RICS in 2012, is a member of the Association of Project

Safety and works regularly with the RICS, fulfilling the role of an APC

Assessor. Roger is actively involved in all areas of the industry but

specialises in large regeneration schemes, developing land and be-

spoke procurement advice.

Jim Martin BSc Dip Proj Man NEBOSH RMaPS FRICS - Senior

Partner

Jim Martin is a founding Partner of the Practice and a Chartered

Building Surveyor. Jim also holds a Diploma in Project Management

and is a Fellow of the RICS. Jim specialises in value engineering and

JV consultancy, as well as leading on all aspects of MA business to

continue the longevity and growth of the practice.

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Partner Details

Partner Details

Martin Lock BSc (Hons) RMaPS MRICS - Partner

Martin Lock joined the Practice in 2006 and was made an Associate

Partner in 2007, leading on our Environmental services. Martin qual-

ified as a Chartered Building Surveyor in 2003 and is also a member

of the Association of Project Safety. Martin works in the residential

and leisure sectors and leads on the stock transfer projects within

the practice.

Ross Hailey BSc (Hons) RMaPS MRICS - Partner

Ross Hailey qualified as a Chartered Building Surveyor in 2005. He

joined the Practice in 2002 and was made an Associate Partner in

2007. Ross is also qualified as a member of the Association of

Project Safety. He works predominantly in the residential sector, as

well as having a specialist understanding of the education sector.

Chris Martin BSc (Hons) MSc MRICS - Partner

Chris Martin first joined the Practice in 2004 and qualified as a

Chartered Quantity Surveyor in 2009. Chris was made an Associate

Partner in 2011 and has Partnership responsibility for our Quantity

Surveying and Cost Consultancy services. Chris has experience in a

number of different sectors including residential, commercial and

healthcare.

Adam Woolsey BSc (Hons) MSc (Hons) RMaPS MRICS—Partner

Adam Woolsey joined the Practice in 2002 and qualified as a

Chartered Building Surveyor in 2005. Adam was made an Associate

Partner in 2007 and is also qualified as a member of the Association

of Project Safety. Adam has Partnership responsibility for training

and specialises in both new build construction and refurbishment

within the private and affordable housing sectors.

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Introduction

I am delight to make my formal submission to be considered to provide professional help and advice to the

Lambeth Leaseholders. I am happy to confirm full compliance with the brief as follows:

Working as independent adviser to the Major Works Committee, the role has two aspects;

(a) Provide professional support and advice in relation to the issues noted in the report to Lambeth's Cabinet July

2014 and the current and ongoing Leaseholder Action Plan (LAP).

I will be delighted to provide all necessary professional support and advice to the issues noted in the report to

Lambeth’s Cabinet dated July 2014 and the current and ongoing Leasehold Action Plan (LAP)

Deliverables

I am happy to confirm that I have allowed to attend 8 MWC meetings to provide observations on the LAP:

tasks, KPIs, progress, performance and outcomes.

I confirm that I have allowed to attend the quarterly meetings of the Tenants’ and Leaseholders’ councils (8)

and support residents to understand and engage in the delivery of tasks within the LAP

I am happy to confirm that I have allowed to support the development of a quarterly audit of tasks and

outcomes within the LAP

I confirm that I have allowed to help develop consensus between Residents, Lambeth Living and the Council

on the outcomes of LAP SMART targets.

(b) Scrutinise 9 (nine) Major Works projects/proposals, to assess the quality, technical works and the costs

proposed for reasonableness and VFM.

I have allowed to scrutinise 9 (nine) Major Works projects/proposals, to assess the quality, technical works and the

costs proposed for reasonableness and VFM.

Deliverables per project

I have allowed to provide a technical assessment, confirming (or otherwise) that the works were/are

necessary and the solutions appropriate

I have included to provide an independent costing for the proposed/completed works

I have allowed to carry out an assessment of the quality of completed works in relation to VFM

I note that the MWC will determine which projects are to be scrutinised and I am happy to follow their

instructions.

Bidder Requirements

Essential

I confirm that I am a Member of RICS, indeed I am a Fellow, and I do have a thorough understanding of the BCIS

I confirm that I have 30 years’ experience of repairs, maintenance and major projects in social housing or estate

management

I am pleased to confirm that I have a clear understanding of the contractual issues relating to the delivery of major

works and be able to review the impact of this on Leaseholders and Tenants relating to VFM, and the s20

consultation process relating to bills for Leaseholders.

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Introduction cont.

Desirable

I confirm that I have a track record of delivering savings for large social landlords and their residents. (Please see the case studies below). Experience in submissions to Leasehold Valuation Tribunal / 1st Tier Tribunal (Please see the case studies below.) Terms of Contract The Council requires consultants to supply a fixed fee contract to cover all activities. Please see below under Fee Proposal. This fee must include all costs involved or incurred in providing the services e.g. disbursements, travel costs, telephone, attendance at evening meetings etc. I confirm this is all included, please see below under Fee Proposal. Quotations should include preparation for and attendance at 8 quarterly council meetings, 8 MWC meetings and 18 site visits, job costing and the attendant report writing. I confirm this is all included, please see below under Fee Proposal. Submission Requirements Tenders are by way of an emailed presentation to Leasehold and Tenant representatives and should cover how the bidder would use their professional skills to address the areas listed above. Tenders will be assessed 60% quality and 40% price. The lowest priced tender will receive the highest possible score of 40%. The remaining bids shall receive a percentage score relative to the lowest priced tender.

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Appointment Information

In terms of the formalities:

We are quality assured ISO:9001 for quality management.

We are quality assured ISO:14001 for environmental management.

We are registered with and regulated by the Royal Institute of Chartered Surveyors.

We carry £5M professional indemnity insurance, £5M employee insurance, £10M public liability insurance.

We hold the NEBOSH Certificate for Health and Safety in Construction

I personally hold the NEBOSH Certificate for Fire Risk and Safety Management in Construction.

We are registered with Constructionline, CHAS and the Association of Project Safety.

We have won a variety of awards for collaborative working, training and design.

All certification and evidence is available upon request.

I have attached an electronic presentation for the Leaseholders further information.

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Case Studies

Gosport Towers I Kelsey HA (A2 Dominion) I £15.2m

Gosport Towers is a group of five tower blocks containing 435 flats in Gosport, Hampshire which were subject to a

stock transfer from Gosport Council to our client Kelsey HA following a successful ballot. The tenure mix in blocks is

almost 50% leaseholders, with the two principle blocks (16 storeys, over looking the harbour) having 65%

leaseholders.

We carried out a detailed survey of the buildings in 2004 and coordinated other information regarding concrete

specialists, M&E, windows etc. We worked with our client during the ballot competition to agree an overall strategy

for the building and attended interviews and meetings with the resident committees. Our Client lead the process,

making every effort to engage the residents using fun days, summer fetes, quiz nights and visits to other schemes

as well as meetings, presentations and seminars lead by ourselves.

We also undertook to train the resident committees to prepare them for the various technical inputs they would

have to make: contractor selection, kitchen designs and external works. These sessions demonstrated our skill,

instilled confidence and built Trust. Although we found the process demanding we have never worked on a

regeneration project where we have had such wholehearted support from the residents throughout.

The key is building Trust through successful resident consultation is to be imaginative, consistent and keep

consulting, even after key consultation stages have passed, this demonstrates that the Trust the residents have

built with us is well placed. We advertised the scheme in the OJEU and ran a competitive tender competition. The

final selection was made following a detailed interview of the five most competitive contractors, which both

leaseholders and tenants were represented.

A JCT contract was signed with an over-arching Partnership Agreement signed by our Client Kelsey, the Contractor

Mulalley, the architect BPTW and ourselves as Employers Agent. The contract value of £15.2M. all of the works

were carried out with the residents in occupation.

Once the costs were all identified we were able to offer the Leaseholders a “cap” on their contribution to the

works. This cap represented a significant discount off of the actual cost with reference to the Lease, but our Client

was keen to have the cooperation of the leaseholders through the works.

The principle sub contractors for kitchens, bathrooms, windows, plumbing and electrical were involved on all 5

blocks and there was a great deal of feedback through the main contractor which produced a partnership approach

to problem solving and integrated working. M

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Case Studies

Hackney Homes ALMO I Hackney Homes I £50M Overview

We acted as the building surveyors to Hackney Homes on their Decent Homes programme which consisted of a

programme of repairs and improvements to 15,000 properties. The contract sums annually are in excess of £50M.

Our fee agreement is signed by all five constructors and Hackney Homes.

Achieving Customer Satisfaction - We ran a number of customer satisfaction workshops to focus the whole team

including the constructors on this required outcome. Hackney Homes have since won awards for the innovative

approach they have taken to the procurement process which is based on partnering and focussed on delivering

improved Customer Satisfaction to the residents.

Leaseholder works - 25% of Hackney Homes’ stock is occupied by leaseholders We carried out all surveys on

behalf of the partnership; in both leaseholders’ and tenants’ properties. This included carrying out Housing Health

and Safety Rating surveys. In addition we also carried out specialist leaseholder surveys designed to improve

financial recovery from the leaseholders. We have also represented Hackney at the First Tier Tribunal or as it was

then known Leasehold Valuation Tribunal.

Hackney Homes had quite an uncompromising approach to leasehold recovery, largely lead by their legal

department, so we often had to prepare to appear at the LVT, however during the 5 year programme we only

actually appeared twice and on both occasions the Hackney Lawyers agreed a compromise settlement before the

LVT were able to give their verdict.

Teamworking for Increased Value - The contractual arrangements were a set of bespoke documents drawn up by

Prof. David Mosey at Trowers and Hamlins, who was the author of the PPC 2000. We have surveyed almost 8,000

properties in the programme. MACE were appointed to act as contract administrators. As Building Surveyors we

were effectively part of the supply chain: the group of retained sub contractors with direct contractual links with

Hackney Homes, this was very much a first for us.

Programme Management Web Tool - One of our greatest contributions however is the development of the

Programme Management Web Tool which is a new web based IT system that increases communication, efficiency

and Customer Satisfaction enormously. The tool receives our survey data either manually entered or from a hand

held, then reads an appropriate description from the agreed Hackney Homes schedule of rates. The tool then

compiles a first draft specification for the works and gives an agreed maximum price for the works. Profits and

preliminaries are then added. The contractor has the opportunity to amend the specification and/or the agreed

maximum price, it then goes to Hackney Homes for agreement and instruction. The system is completely paperless. M

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Case Studies

Lewisham Stock Transfer I London & Quadrant Housing Trust I £23.00M

Our Role: Combined role of building surveying, quantity surveying, project management, CDMc.

Overview

In October 2010 our Client, London & Quadrant Housing Trust (L&Q) was successful in the stock transfer of three large areas

within Lewisham, which we were appointed and are currently delivering the works within two of these areas; Rushey Green and

Catford. The success of the project has centred around a truly collaborative approach between L&Q, ourselves, the contractor,

other consultants and various service providers.

The majority of the housing stock is scattered, consisting of largely Victorian /Edwardian Street properties many of which were

converted into flats in the 1970’s. Approximately 25% of the stock is leasehold and from the outset L&Q asked us to hold

“increasing customer value” workshops. The leaseholders were very suspicious but gradually began to co-oporate and I am

delighted to report that, to date we have not had a single leaseholder take our Client to the First Tier Tribunal. This has been done

by engaging the leaseholders and paying particular attention to the service of notices and payment terms.

Sound Insulation

These properties require careful consideration and effective solutions in dealing with the transfer of sound between poorly

converted occupied properties. We were able to add a great deal of value because of our detailed knowledge and understanding

of Victorian Street Properties and in particular the measures required to prevent sound transfer, together with the works

required to bring this type of property up to current standards.

Energy Efficiency

We carried out a combination of works to each property which significantly improved the energy efficiency: insulation, dry lining,

double glazing, new heating systems and a educating the resident to the most efficient use of their buildings. The energy saving

and carbon reduction has been very significant.

Resident Liaison

There are approximately 1900 homes across the two areas of which almost 100% are occupied. The occupation of the properties

has meant a significant investment to resident liaison between the various partners, which has to date resulted in a high level of

tenant satisfaction; a key goal for the Client and project partners. We have introduced our Resident’s Friend service which focuses

on the resident rather than the building. By investing in explanations and demonstration of heating controls for example, we have

cut reported “defects” by 50%.

Aids and Adaptations

Specific attention has been made to properties requiring 'aids and adaptations', where we have worked alongside the Clients’

appointed Occupational Therapist and individual tenants in order to deliver specific works and equipment to suit the tenants

needs.

Listed Buildings and conservation Areas

There are a number of properties within Conservation Areas and other Listed and special

interest properties that present a raft of additional challenges regarding their external

restoration, in particular the approach to improving the windows. Through close

consultation with the local Conservation officers and Planning team, a strategy has now

been agreed and we are preparing our forward plan for the various properties as well as

undertaking exemplar projects to highlight the nature of the restoration work required.

Asset Management - The condition of the existing stock has meant that careful

planning is required from the stock condition information and consultation with the

project teams, to deliver the works efficiently and within a priority hierarchy that meets

a number of targets. To date over 1600 properties have been returned to a Decent

Standard.

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Case Studies

Lewisham Park I London and Quadrant Housing Trust I £8.7M

“I have to say, I think Martin Arnold continue to do us proud on Lewisham Park Towers with your responsiveness,

professionalism and above all the great relationship with local residents.” Tom Bremner, Neighbourhood Director

- L&Q

Lewisham Park consists of three 17 storey tower blocks with 204 Properties (approx 20% leasehold) within the

Lewisham Area. Our client, London & Quadrant Housing Trust was successful with their bid to assume the role of

the landlord from Lewisham Council. As part of the bid, London & Quadrant Housing Trust made a number of

promises to the residents and leaseholders of Lewisham Park. We have been assisting our Client in formulating

work and procurement packages to ensure that all promises are kept within the time frames promised. We were

appointed to act as Architects, Building Surveyors, Quantity Surveyors and CDM Coordinators. We did all of the

survey works, design, planning applications, building control submissions etc. we carried out all of the pre and post

contract services. We were also appointed to provide a “Residents Friend” service. We formulated a clear works

programme over a 2 year period and separated the works into 5 phased programmes. We used a variety of

different contractors based around a task/trade based programme and used the JCT Intermediate Contract 2005 to

procure the works with each contractor.

Phase 1 – Internal works, Lifts, Kitchen, Bathroom & Electrical Upgrades: Our client has a good working

relationship with a local medium sized contractor from their maintenance framework and wanted to continue to

build on the existing relationship by negotiating Phase 1 with them. We worked closely with our client and their

chosen contractor to develop a clear and precise working specification. We worked with the Resident Steering

Group, which was formed by Lewisham Council, to ensure the product and specification we were proposing

exceeded their expectations. We worked closely with all parties pre contract and proposed that a show flat be

constructed to help the residents visualise the end product. At an early stage we assigned our full time Resident

Friend to work with the residents to enable them a single point of contact for all matters relating to the kitchen &

bathroom works. Residents were invited to attend the show flat during their colour choice exercise. Works

completed on Phase 1 with over 95% resident satisfaction recorded to date.

Phase 2 – External Works: Works commenced on the external package, the works were tendered to 5no main

contractors. Works include: Roof covering replacement works, Full liaison with roof communication companies as

the buildings had aerial masts on them, Concrete repairs, New windows, External decoration, Pest control works,

Drainage works, Structural repair works, Fire alarm and emergency lighting installations. Works completed, 2

months ahead of the promised deadline.

Phase 2a Fire Alarm and emergency Lighting Contract: We installed new fire alarms and emergency lighting to all

three blocks and carried out a complete fire risk assessment, then put the management plan into action.

Phase 3 – Environmental & Security Works: We commenced the Environmental & Security Works package

completed the works on programme and under budget. Works include:- Underground Garage refurbishment,

Adapting main block front entrances, Adapting green areas to promote estate movement, Remote access CCTV

operations, Improving estate lighting. We are currently working with our Client and the Resident’s Steering Group

to formulate options and solutions to the social issues currently being experienced on the estate. We are working

closely with the planners to ensure that our proposals are achievable and delivered on time. Mart

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Case Studies

Lewisham Park cont.

Phase 4 – Communal Area Upgrade works: Because a significant amount of money had been saved on the first 4

phases, L&Q decided to carry out some upgrading works to the common parts of the towers. This essentially was

interior design works for the entrance areas, lift lobbies and landings.

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Experience

As a firm we have a great deal of experience in preparing leaseholder estimates, calculating leaseholder final

accounts and acting as an expert witness at the First Tier Tribunal or as it was known, Leasehold Valuation

Tribunal.

I refer to the case studies we have included in this submission:

Gosport Towers had over 50% of residents who were leaseholders and we are very involved with our client in

the services of the Section 20 Notices and the consultation. We are about to go to the LVT in settlement of

one of the Leaseholders claims. Jim Martin BSc DipProjMan FRICS appears at the LVT as an expert witness

and regardless of who runs the project Jim would appear at the LVT if it becomes necessary.

Hackney Homes were required to enter into extensive consultation with their leaseholders and we did a

separate “Leaseholder Survey” which we had specifically designed in conjunction with the legal team at

Hackney to ensure compliance with procedures. Hackney were anticipating significant challenges from the

Leaseholders but these have not transpired in the numbers anticipated. Jim Martin will has represented

Hackney twice at the LVT.

Lewisham Park Towers have a number of leaseholder who have been consulted with in a very detailed and

comprehensive fashion. Thus far there have been no challenges or matters referred to the First Tier Tribunial,

but our client has retain Jim services if required.

Lewisham Stock Transfer, approximately 25% leaseholders, consultation well underway, notices prepared

and served and thus far no referral to the First Tier Tribunal.

Most, if not all of our projects to existing buildings involved leaseholder issues to a lesser or greater extent, we can

offer detailed and expert advice on all matters and procedures involved in successful managing leaseholder works.

Approach

Our approach is one of collaborative working and cooperation to achieve the joint goal of value for money. Both

the Landlord and Leaseholder have a great deal in common, both want the building kept in a good state of repair,

both want to maintain the asset as a future investment and both want to carry out works which are good quality

and represent value for money. In my experience, this can only be achieved through good communication and a

collaborative approach to the works.

I completely agree with Item 1.3 of the Leaseholder Action Plan in defining the problem:

The Council has acknowledged leaseholders’ valid concerns regarding a number of issues relating to the delivery of leasehold management services and resolved that in order to regain the trust of Leaseholders the following must be delivered:

Actions taken to deliver and evidence value for money through the delivery of major works

Ensure that works are carried out to a good standard evidenced through improved satisfac-

tion

That the ability of leaseholders to pay service charge bills was aided through repayment op-

tions tailored to meet their personal circumstances

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Experience

A major works programme often seems overwhelming but the essential elements must prevail, whatever the

size of the programme:

1. Clear and timely communications both formal and informal

2. A collaborative approach by both parties in pursuit of good quality and value for money

3. An understanding that both the Landlord and the Leaseholder have converging objectives

The strategy for successful engagement is as follows:

Take expert advice to agree a strategic plan to manage the leaseholder works process.

Plan the procedure against the programme/timetable meticulously (many mistakes are made in timing)

Get the critical paperwork right first time: notices/schedules/estimates.

Be open and honest in all consultation, take feedback seriously.

Understand that people respond positively to well planned, high quality work and proof of value for money.

Develop and expand the process, leaseholders are not going to disappear, if the right investment of time,

energy and expertise is made a long term partnership can be developed with Trust and Converging

Objectives being central to the arrangements.

The major works programme offers both Landlord and Leaseholders the momentum to build and develop a

long term positive partnership based on Trust and Converging Objectives.

My experience tells me that the “devil is in the detail” and it is the attention to the details which will determine

how successful the major works programme is viewed.

I was appointed by Lambeth to join the Task and Finish meetings, I complied a report, which I note is included in

the fee tender documentation. I am very keen to continue this work, to advise and support the leaseholders

through the process.

I became acutely aware that relations between Lambeth and the Leaseholders are not very good and there is a lot

of history or “baggage” that come to this process, from both sides.

If appointed I will be taking a fair and even handed approach that will always be pragmatic, for example, many

leaseholders that I met wanted to challenge the use of a Long Term Qualifying Agreement. My advice is that

challenging the use of a LTQA is futile and the Leaseholders should, rather than seeking to frustrate the process,

should join the process seeking high quality work and value for money.

As stated in my report to the Task and Finish Group, I do however have a number of concerns:

1. The Mechanical and Electrical works were not retendered and will be delivered on the old arrangements.

This will lead to higher costs, less positive influence by the consultants, less influence by Lambeth and general

confusion because many bills to Leaseholders will contain general builders work on the new arrangement

together with M&E works on the old arrangements. The cost problems can be overcome, by retendering

M&E packages periodically to “market test”, but it will require a great deal of work by Lambeth. As the M&E

works will constitute a significant proportion of the works, we will need a level of engagement. To resolve

this problem.

2. My views on the pain/gain arrangements are well documented and I think such an arrangement has no place

in the recharging of Leaseholder works.

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Experience

3. Every Leaseholder I have met, would like to be kept better informed of the programmes progress. They also

want to “drill down” into randomly selected individual jobs during the programme, which I think is an

excellent idea: one job/block/estate per area, per year. The job will be selected by the Leaseholders, and

Lambeth will have to produce the instruction to the builder, the priced specification, any drawings, any

instructions issued and the final account. The final account will need to be supported by evidence of spend

from the contractor, including sub-contractors invoicing. The Leaseholders feel that a detailed examination of

10-12 jobs over a 3 year period on a programme of this enormous scale to provide transparency is fair and

reasonable.

4. Engagement with Leaseholders is not simple on technical matters, I am not an expert in the range and variety of

payment options provided by Lambeth but they appear to be fair and reasonable. The key, is for any

leaseholder to engage with the process rather than ignoring the process. Where I have been involved in this

type of programme before, the issue of interim billing is always contentious and often the single reason why

relationships between Landlord and Leaseholder sour. I will also be seeking to ensure that Lambeth take great

care and the interim billing process is fair, reasonable, appropriate to the individual Leaseholder and

transparent.

5. Often the vocabulary of the construction industry is a barrier to Leaseholders understanding, this is something I

will be able to help with. All Leaseholders feel that a standard format breakdown of the works attached to the

bill would be helpful. This breakdown would identify the building works cost, profit and preliminaries and would

also identify M&E works cost, profit and preliminaries. The consultant’s fees could also be identified along with

the Lambeth Management charge. I am sure that the Leaseholders are happy to work with Lambeth to agree a

format.

6. During my preliminary work on the Task and Finish Group it became clear that the Leaseholders want to be

notified if any of the works are covered by a separate guarantee, for roof coverings, for example.

7. It is within the area of “delivery” that I have my concerns, this is where all the focus needs to be. All of the

reassurances and details provided by Lambeth appear sound and well thought through but until the

Leaseholders see the delivery process in action we will have to reserve judgement.

8. This is a very large programme being delivered in a very short timescale, it is very likely that there will be errors

and mistakes. If there is a focus and attention on the delivery process before it commences, hopefully errors

and mistakes will be minimised. I think this is the area within which the leaseholder’s contribution could be

most helpful for Lambeth.

9. I understand the delivery team has been brought together through processes of competitive tender:

a. Contractors: Keepmoat, Breyers, Mears

b. Consultants: Pellings, Frankums, EC Harris, Hunters

10. All of the selected contractors and consultants are experienced in this type of work. They all have their

individual strengths and weaknesses but they should make a good team. The key difference from the previous

programme, is that the consultants will be writing the specifications of works. Previously the contractors were

writing their own specifications and the consultants were checking them.

11. What needs to be made clear are the details of Lambeth’s involvement in the works delivery: the Client’s role,

the quality monitoring or Clerk of Works functions. I know these were discussed in general terms and I was told

that “Lambeth will sign off all the works on completion” but I am unclear of the mechanism of “sign off”, again I

think the leaseholder’s eyes and ears could make a valuable contribution to the whole quality control regime.

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Experience

Within the allowances I have made in the Fee Proposal, I have included all of the “deliverables”: the attendance at

meetings, the scrutiny required, the reports and analysis. I have also made an allowance for site visits and general

discussions with Leaseholders.

All Lambeth Leaseholders can email me and I will endeavour to answer all questions and queries. I will look at all

the details and fight to defend the Leaseholders interest were necessary.

I would, however, seek to do more, I would like to help to build a lasting partnership between Lambeth and the

Leaseholders which is based on trust and converging objectives. This partnership could become the platform upon

which all future work is carried out.

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Larkhall Estate Water Services

London Borough of Lambeth – Questions on the Larkhall Estate Water Services

Role of independent external advisor (‘Expert’) to report to the Leaseholders’ and Tenants' Major Works Committee. Martin Arnold response 1st May 2015: Introduction The proposed works estimated in the two documents are the replacement of water supply pipes to the buildings, some of the works will take place with the Leaseholders demise, some works will take place in the common parts and some works will take place on the estate within the roads, together with the connections to the water mains in the highway. Analysis and Process If this were to be a “model approach” I would set out a set of simple steps, which in turn would generate a series of questions that would interrogate the proposals: Step 1 – Check the lease. The first step, if advising the leaseholders, would be to examine each lease to see if the individual leases allow for these works. (This is a good step with any works), but these works are complex, connected to other works and are to be carried out in areas which the individual lease may not cover, (connections into the highway for example). It may be that the lease may state that the Landlord is responsible for the water supply, or that supply pipes are not mentioned in the Leaseholders obligations. If the works are not allowable under the lease then the leaseholder cannot be charged for them. Step 2 - Check the arithmetic. The next step is the check the arithmetic and the estimate does not add up correctly. “Like for like replacement of the systems are budgeted at £1,270,000.00, does not allow for future provision of services”. Each leaseholder, from appendix one is being charged a proportion of £75,398.77, labelled “Block Cost”. The totals in Appendix 1 adds up to £75,443.88. While this difference is relatively small, it does not give confidence. Additionally, there are 16 blocks listed and if 75,443.88 are multiplied by 16 it equals £1,206,380.32. The numbers do not add up correctly. Step 3 - Consider if the works are necessary. The third step is to consider the works and how much is covered in the repairing covenants within the lease and whose responsibility they are. One must consider if these works are really necessary. The existing system is not leaking. Step 4 - Consider if the works are due to a failure to maintain by the landlord. The existing system was, one assumes, compliant with legislation at the time of its installation, it is unclear if the legislation referred to in the report to be applied retrospectively. The report identifies missing tank lids as a problem, is this not due to a lack of maintenance by Lambeth? Step 5 – Carry out a “sense” check, the report is inaccurate, one might wonder if these works are being carried out in all blocks and if not why not? It may be for example that with some maintenance: cleaning the system, replacing missing lids etc. that the system can be given some additional time before replacement is required. Step 5 – Carry out a value for money check. The report and Appendix 1 both contain costs and it is difficult to see how they relate. It is unclear from these documents, what the leaseholder is being asked to contribute. “Like for like replacement of the systems are budgeted at £1,270,000.00, does not allow for future provision of services”. I am not clear how they can be like of like as the water services are being redesigned. Step 6 – Carry out a technical analysis. The report states that Thames Water are reducing the pressure in their main supply and once it is reduced to 1 Bar the water tanks will not fill and the water supply to the third floor will fail. If this pressure reduction happens how will the new installation ensure a workable pressure to the third floor. A pressure reduction applies to an new pipe as well as an old pipe. There does not seem to be any measure included to increase the pressure of supply on the estate?

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Larkhall Estate Water Services

Conclusion

We need to review the individual leases and in particular the repairing covenants.

We need to make sure the numbers add up and they currently do not.

We need to consider if the works are necessary – the system is not leaking and is working.

We need to consider if the works are due to a failure to maintain by the landlord, the hot water pipes have been allowed to become restricted.

We need to consider: is it sensible to replace the pipework now or is this being driven by the major works programme?

We need to carry out a value for money check and currently it is unclear what is being charged.

We need to carry out a technical analysis, how for example is the issue of reducing pressure to the upper floors being dealt with?

If one applies the analysis steps, one can ask a series of questions, for example, looking at the summery at the beginning of the report: Maintenance of the system as Lambeth Living are unable to comply with statutory legislation using the current access arrangement. – This appears to be because Lambeth Living have not been able to obtain access to the tank rooms to carry out their inspections. I would suggest that they have the landlord’s permission and every opportunity to exercise their right of access to carry out the inspections. The access rates are so low, this could be an item where Lambeth Living have not been trying very hard to obtain access.

The mains water pipework rising up through each block is formed in Lead. It may be a good idea to replace the incoming main but the leaseholders should be given the choice:

The guidelines on Lead pipe have changed see below: 7.7 Regulation 30(4) requires water companies to modify or replace their part of any lead service pipe when it has reason to believe that the concentration of lead at the consumer’s tap exceeds 10 μg/l. The water company is required to replace their part of the pipe when the owner intends to replace his own part of the service pipe and the owner has made a written request to the water company to replace its part.

This regulation simply states that the water company requirements to replace or modify their lead pipe, not the leaseholders.

The Hot Water Service cannot be operated as designed due to the scale build up within the pipework. – This surely is an item demonstrating a lack of maintenance, allowing the scale to build up.

Hot Water pressures at top floor level are very low – due no doubt to the lack of maintenance above.

The potential future reduction in mains water pressures. – There is potential, but there may be a variety of technical solutions available. There are no technical solutions in the report to increase the pressure. It has to said, that at this stage, these are only estimates but I think the Leaseholders can add clarity to the process by examining in detail the priced proposals and going through the step by step analysis outlined above.

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Fee Proposal

My charging out rate will be £95.00 hour. I am happy to include all costs, travelling and out of pocket expenses

within this figure.

All fees will be subject to VAT.

I have set the fee proposal out on the basis for a single year from the time of my appointment. I anticipate that

once we are “one year into the programme” my work will not be so intense and there is likely to be a reduction in

time, however it is impossible to predict accurately.

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Task Hours Allowed @£95/hr

Total Fee

I have allowed to attend 8 MWC meetings to provide ob-servations on the LAP: tasks, KPIs, progress, performance

and outcomes.

30

£2,850.00

I have allowed to attend the quarterly meetings of the Tenants’ and Leaseholders’ councils (8) and support resi-dents to understand and engage in the delivery of tasks

within the LAP

30

£2,850.00

I have allowed to support the development of a quarterly audit of tasks and outcomes within the LAP

40

£3,800.00

I have allowed to help develop consensus between Resi-dents, Lambeth Living and the Council on the outcomes

of LAP SMART targets.

40

£3,800.00

I have allowed to scrutinise 9 (nine) Major Works pro-jects/proposals, to assess the quality, technical works and

the costs proposed for reasonableness and VFM.

I have allowed to provide a technical assessment, con-firming (or otherwise) that the works were/are neces-

sary and the solutions appropriate

I have included to provide an independent costing for the proposed/completed works

I have allowed to carry out an assessment of the quality of completed works in relation to VFM I have included to visit each site.

40 x 9 =

360 hrs

£34,200.00

Totals

500

£47,500.00