Author: bradley.mason

Commercial Surveyor Services

Bradley-Mason LLP is a Chartered Building Surveying practice who offer the full range of Surveying, Building Consultancy and Project Management Services throughout the UK.

Our senior level team provide expert advice, with a focus on a quick turnaround service to maximise value and to fully understand our client’s businesses and property requirements. Ranging from investment funds and private Landlord’s to High Street retailers and commercial Tenant’s, we offer advice on the whole life cycle of their property interest from acquisition to disposal. Our aim is to predict your needs and ensure your expectations are exceeded. We question your requirements to ensure that our services are tailored to your current and future needs.

DILAPIDATIONS INTRODUCTION

Posted on by bradley.mason
Planned Maintenance Hero Image Contact our expert team banner

What are Dilapidations? – Dilapidations is the term normally used for repairs required under a Lease.  Most commercial Leases in the UK place an obligation on the Tenant to undertake a variety of repairs, decoration and other express covenants which may include complying with Legislation, cleaning the Premises or reinstating any alterations at the end of the Lease.  Dilapidations is the term generally used for the works which a Landlord asks a Tenant to undertake either during the term, or at lease end.

The difference between residential and commercial Tenancies – In the UK the main difference between most residential and commercial agreements is that typically a Landlord would be responsible for the repairs to a residential property and the Tenant would be responsible for repairing a commercial demise. The exact terms of this are dependant upon the terms of the Lease, which is the Contract between the Landlord and Tenant.  The basic legal principles of any Dilapidations Claim is therefore based on Contract Law.

Record of Condition – There is often a requirement to record the condition of a building either prior to a Lease or before some construction work or access onto a property is made.  This is often referred to as Dilaps or Delaps although this would normally be called a Schedule of Condition.  This is a detailed record of the condition of the building and when used in a Lease can be very useful to limit a Tenants liability at the end of the term or illustrate works a Landlord is claiming.

What is a Schedule of Dilapidations? – A Schedule of Dilapidations is the document which the Landlord would prepare to identify the works required by the Tenant. This would typically identify why the Tenant is in Breach of the Lease, what Lease clauses they should comply with and the works a Landlord considers are necessary.  In some cases the Landlord may advise the Tenant of the cost of these works.  If served during the Term this is known as an Interim Schedule of Dilapidations, or in some cases a Repairs Notice.  If the Lease is about to end the document may be called a Draft Terminal Schedule of Dilapidations, and if the Lease has ended then the Landlord would be making the claim for Terminal Dilapidations.  The final claim is also known as a Quantified Demand.

Interim Dilapidations – If a Landlord is concerned over the condition of their property then under most modern Leases a Landlord can undertake an inspection, assess whether the Tenant is complying with the terms of their Lease and issue a Notice on the Tenant.  Depending upon the wording of the Lease, the Landlord may issue a Section 146 Notice or a Simple Repairs Notice which the Tenant must comply with.   In some cases if the Tenant does not comply, the Landlord can enter the property, undertake the work and claim back the cost from the Tenant.

Does the Landlord have to serve a Schedule of Dilapidations? –   Overall there is no obligation on the Landlord to remind the Tenant of the works they should undertake under a Lease. It is the Tenants responsibility to read the Lease and undertake the works required by their Lease.  Under most Leases, a Tenant is required to reinstate any alterations they make and in some cases a Landlord must notify the Tenant if they require reinstatement.  This is not always the case and the Lease will often place the obligation on the Tenant to reinstate any alterations they have made.

How do you assess the standard of repair?  This is something a lot of Tenants are unsure over, in particular if they are undertaking the work. The wording of the Lease will typically state the extent and quality of works required and in some cases this may be limited to the condition shown in a Schedule of Condition, which would record the state at the start of the Lease.  The age and character of the building is also important as the standard of repair on a new property may vary from a short term Lease on an older site, which may have been let many times.  A basic principle which is often followed is that a Tenant is required to undertake the repairs, to a standard which would be acceptable to a reasonably minded Tenant, having regard to the “age, character and location of the property”, on Lease commencement.

How do you know what work to undertake?  Hopefully most Landlord’s would be helpful in advising the Tenant of the works which they consider needed by the end of the Lease.  In some cases a Landlord must notify the Tenant if reinstatement of alterations are required and in some cases the colour of decoration, the type of carpet or similar must be agreed with the Landlord.  If a Tenant is unsure or requires more detailed advice then it can be useful to prepare a Dilapidations Assessment.  This can be prepared by a Chartered Building Surveyor and it would be similar to a Schedule of Dilapidations. It would review the Lease, consider the Tenants obligations, assess the condition of the building and suggest the works which may be required.  This could be useful if a Tenants requires an early indication of work required.  It is also very useful to provide a future Dilapidations budget, in particular if required for accountancy purposes, where under FRS102 a Dilapidations Assessment may be required by Auditors to provide future provision in companies accounts.

Dilapidations Procedures – Procedures should be followed by both Landlord’s and Tenants when dealing with Dilapidation’s. In particular the Royal Institute of Chartered Surveyors provide useful guidance in the form of the RICS Guidance Note, Dilapidations in England and Wales, 7th Edition.  It is also important to follow the Dilapidations Protocol, which is the Pre-Action Protocol for claims for damages in relation to the physical state of a property and this is published by the Property Litigation Association.

What do you do if you receive a Claim from the Landlord – Whether received during or after a Lease, the first step would be to check the terms of your Lease or similar agreement to establish if  you are liable for the property and the parts claimed. It may be useful to refer to a Chartered Building Surveyor for further advice. If the Lease has ended then the Dilaps Protocol requires the Tenant to respond to the Landlord within 56 days, otherwise they may incur penalties if the Claim proceeded to Court.

The further defence and negotiation of Dilapidations can be a difficult and protracted process and we would recommend the advice of a Chartered Building Surveyor at all stages of this process.

Contact our expert team banner

Commercial EPC

Posted on by bradley.mason
Contact our expert team banner

Bradley-Mason specialises in providing project management and supporting services for commercial EPC surveyors. With incoming changes to the MEES regulations and the growing importance of accurate energy performance certificates (EPCs), Bradley-Mason makes it as easy and straightforward to get any support and project management services you need.

If you are a commercial surveyor that takes on EPC but would rather not get involved in all the surrounding services, Bradley-Mason can take away the hassle for you.

Whether you are interested in learning more or you would like to work with us for extra services around EPCs for commercial property, please don’t hesitate to get in contact with our experienced and knowledgeable team today.

MEES and how it affects clients

In 2018, the first stage of the Minimum Energy Efficiency Standards (MEES) was brought into effect. This stated that it was unlawful to lease a private rented commercial property or renew a lease unless the building achieves an EPC rating between A and E.

The second stage is due to come into force in April 2023. This will stipulate that all privately rented properties with leases that commenced before April 2018 must comply with the MEES regulations.

Ultimately, this means it is essential to get accurate commercial EPCs for owners of any commercial property that is privately leased. If you are a commercial surveyor who conducts EPCs for commercial clients, we can help make the job easier for you.

What we do

As highly experienced commercial surveyors, Bradley-Mason has extensive expertise in all aspects of commercial property project management. This allows us to provide the support you need to ensure that EPCs can be carried out effectively and efficiently.

We have worked with skilled and trusted providers of EPCs. This means that we are perfectly positioned to provide all of the support and project management services that you need, to allow the project to run as smoothly as possible and to make sure that the EPC complies with all of the relevant MEES regulations.

Why choose Bradley-Mason?

At Bradley-Mason, we have many years of experience providing a full range of support options to commercial surveying services. Our team understands the need for quality and accuracy in everything we do.

We have also built up a strong reputation for our high levels of customer service. No matter whether you help with project management, or if you are interested in a broader range of services, our team will be with you at every step of the process to provide advice and guidance.

Our head office is in Harrogate, North Yorkshire – but we can carry out work everywhere from London and Bristol to Manchester and Sheffield.

If you are interested in working with Bradley-Mason, or if you just want to learn more about the range of services that we provide, contact us today. You can call our team directly on 01423 611 604 or email us at info@bradley-mason.com.

Contact our expert team banner

How does a Schedule of Condition protect both landlord and tenant?

Posted on by bradley.mason
Design and Specification Services Hero Image Contact our expert team banner

Whether you are a landlord with property to let or a business about to enter into a lease agreement, a Schedule of Condition (SoC) is an important document designed to protect your interests. The document is typically prepared for legal and contractual reasons, both for residential and commercial properties.

A Schedule of Condition is generally included with a lease. It is drawn up prior to a new tenancy commencing, with the purpose of equipping both landlord and tenant with a record of the property’s state of repair before occupancy starts. Both parties have the opportunity to consult on the SoC to agree its findings and overall contents.

At Bradley-Mason, our expert team has many years’ experience of all aspects of commercial building surveying and building consultancy. We are routinely involved in preparing Schedules of Condition for inclusion within a lease or a party wall award, advising investors, landlords and tenants.

What does a Schedule of Condition contain?

A Schedule of Condition typically consists of a combination of written statements and photographic evidence to illustrate the surveyor’s findings. This is known as a full Schedule of Condition and offers ample scope for the surveyor to accurately describe the property’s state of repair.

The information is usually set out in a well-structured and easy-to-follow format:

  • Summary introduction specifying the purpose and scope of the Schedule
  • Brief description of the property being inspected, and details of its location
  • Any restrictions on the inspection
  • Date and weather conditions at the time of inspection
  • The purposes for which the Schedule may be relied upon
  • Relevant drawings of the property, identifying rooms
  • Written schedule of observations, detailing the condition of the property room by room
  • Accompanying photo and/or video evidence to showcase the surveyor’s findings
  • Mentions of the types of tests carried during the inspection
  • Definitions of the terms included within

The most important purpose of a full Schedule comprising both detailed photographs and text is to provide a fair, first-hand insight into the property’s condition. Whether the Schedule is prepared on behalf of a landlord or tenant, contractor or employer, the document is used to identify changes in the condition of the property that could be difficult to visualise without the assistance of detailed photographs and written descriptions.

What is a Schedule of Condition used for?

When a commercial or residential property is to be let, it is good practice for the lease to include a Schedule of Condition in order to document the general condition of the property at the outset of the lease term.

As a factual and impartial record of the state of the property at the beginning of the lease term, the Schedule acts as a benchmark against which the property’s condition can be assessed at a later date, serving as valuable evidence in case of landlord-tenant disputes.

A properly prepared Schedule of Condition can fulfil important functions to assist both landlords and tenants:

  • It can help protect both parties’ interests by outlining and enabling landlord and tenant to agree the condition of the property, including any repair work that might be needed, at the outset.
  • The Schedule, including any liability for repairs, are commonly referred to within the lease or tenancy agreement, which sets out the expectations of the tenant to maintain the property’s condition.
  • It can be used to establish and agree the tenant’s repairing obligations, including any obligations for reinstatement works, under the lease. That way, potential disputes and claims for damages during or after the lease term can be avoided.
  • On commercial leases, a SoC can act as an invaluable tool to help the tenant limit their liabilities and repairing obligations under the terms of the lease, particularly towards the end of the lease term when they may be facing dilapidations claims from the landlord.
  • At the end of the tenancy, and often also at specified intervals throughout the tenancy period, the landlord (or his representatives) has the right to inspect the property, using the SoC to determine whether any damage has been incurred since the Schedule was drawn up.

In the event of damages or repair to the property, both the tenant’s repairing obligations contained within the lease agreement and the Schedule of Condition can be referred to. As the Schedule of Condition acts as written and photographic evidence of the state of the property at the start of the lease term, it protects both landlord and tenant when it comes to determining who is responsible for repairs at the property.

Contact us

For more information about how a Schedule of Condition can help protect your interests as a landlord or tenant, or to discuss your specific requirements, please get in touch with our experienced team.

Contact our expert team banner

Reinstatement Cost Assessment – what you need to know

Posted on by bradley.mason
Building Consultancy Slider Image Contact our expert team banner

Having adequate insurance cover for your commercial buildings is vital, whether your investment is a single building or you’re managing a larger portfolio. Not enough insurance can leave you financially exposed in the event of a claim, particularly in the event that you have to rebuild the property, which can have potentially disastrous consequences. Too much cover means you’re paying over the odds for your building insurance. But the risk of both overinsurance and underinsurance can be avoided with a Reinstatement Cost Assessment (RCA).

At Bradley-Mason, we conduct professional and impartial assessments according to the latest practice standards from the Royal Institution of Chartered Surveyors (RICS), using RICS Guidelines for RCA of Buildings and online cost information from the Building Cost Information Service (BCIS) to allow us to produce an RCA with a high degree of accuracy.

What is a Reinstatement Cost Assessment?

RCA is the basis on which Chartered Surveyors conduct appraisals of commercial property, plant, machinery and contents for insurance purposes. Most UK commercial buildings are insured on a reinstatement basis, meaning new for old. Thus, the reinstatement cost of a building means a repair, reconstruction or renewal of the asset to a condition that is equal to but not better than new. It’s a comprehensive assessment that often involves the inspection and reporting on a wide range of properties of varying types, sizes and uses.

How frequently should an RCA be conducted?

Carrying out a Reinstatement Cost Assessment to determine the value of the asset is the only way to ensure that the correct level of insurance cover can be put in place. With that in mind, and in line with RICS recommendations, we would advise that a full RCA be carried out every 3 years, alongside supporting annual desktop evaluations with costs amended based on Tender Price Indices (TPIs). If any significant alterations are made to the property, or additional investment or downsizing in plant, machinery or contents has occurred, a reassessment should be conducted in full to ensure that appropriate insurance cover is in place.

How is a Reinstatement Cost Assessment carried out?

Undertaking an initial RCA for insurance purposes requires a physical inspection of all areas of the property by a qualified surveyor. Schedules of buildings, main plant and machinery/contents will be undertaking during the site visit and building plans, health and safety documentation and other information about the building’s size, age, construction, location and services may also be required. BCIS published data, information supplied by machinery manufacturers and agents, internet research and internal databases are all used in the calculation. The more information we have, the more accurate the RCA will be. Subsequent RCAs may be conducted without the need for a physical visit

What happens in the event of a claim?

Should the worst happen and an insurance claim is made on the policy, the building’s reinstatement cost estimate is called on to inform the likely insurance pay-out. In addition, the insurer will appoint a loss adjuster to assess and manage the claim in detail. A surveyor may also be instructed to assess the extent of the damage and invoices in the reconstruction process, making sure the building is appropriately reinstated. At Bradley-Mason, our project management team has developed a specialist service to rapidly assess building damage as a result of flood, fire or vandal attack, prepare an outline feasibility for the work required to agree with the loss adjuster, and specify, tender and project manage the repair work to minimise the impact on our client’s business.

How can Bradley-Mason help?

If you require independent professional advice on Reinsurance Cost Assessments for your commercial premises anywhere in the UK, the experienced team at Bradley-Mason LLP should be your first port of call. We have many years’ experience in surveying all kinds of commercial property across many sectors, ranging from small office premises to large multiplex cinemas and wide-ranging residential portfolios.

Call us on 01423 611 604 or email us at info@bradley-mason.com to discuss your RCA requirements with our expert team.

Contact our expert team banner

Preparation is key to beat EPC Energy Efficiency Deadline

Posted on by bradley.mason
Reinstatement Cost Assessment Hero Image Contact our expert team banner

Many commercial landlords might already be wrestling with issues around bills, non-paying tenants, or rising mortgage rates but they can’t afford to ignore fast-approaching EPC deadlines. Under the Minimum Energy Efficiency Standards (MEES), all non-domestic rented buildings must get an EPC B rating by 2030 and although that’s still a few years off, the government has proposed a phased implementation of achieving a minimum C rating by 2027 which is going to be a particular challenge for any properties currently below an E. From next April, only those non-domestic buildings that make this grade can be let out.

With the clock ticking, landlords need to devise an action plan – and the best way to get started is by working with a trusted commercial energy assessor. They’ll calculate a building’s energy rating, taking into account the type of construction, including walls, roofs, floors and windows, heating, cooling, ventilation and hot water systems, lighting, and whether different parts of the building are used for different purposes. In order to produce the most accurate possible results, these assessments are becoming increasingly high tech. Murton & Co’s work with cutting-edge software firm arbnco uses its software platform to gauge building energy analytics by acquiring energy, carbon and environmental data to identify the right retrofit solutions for commercial buildings. After producing an EPC, we use Arbnco software to run the simulations for enhancements. They have also developed equipment and software to monitor indoor air quality, ventilation and thermal comfort which can then be used to inform strategies to improve and enhance buildings.

EPCs set to evolve

Looking forward, updated Building Regulations due in 2024 might mean that in the future, new properties will have to consider embodied carbon in the EPC metrics, such as where the building materials come from and how they were made. However, as the commercial EPC is a measure of carbon emissions, when the majority of buildings eventually become carbon neutral, carbon as a metric to evaluate the energy efficiency would then become irrelevant.

Assessment complete and armed with suggestions to make improvements to their commercial premises, landlords often find that new lighting and energy-saving heating methods make a significant difference to their bills and the comfort of their buildings. Offices, shops, and warehouses can suffer from poor natural light and must use a large amount of – often inefficient – lighting. Simply by converting to LED, landlords could save up to 50% on lighting costs and improve their EPC score. When looking at heating, an efficient air-conditioning unit helps, along with wall and roof insulation, and renewable sources of energy such as solar panels. However, it’s certainly not always the case that substituting the much-hyped heat pump is the answer; sometimes a blended system of gas boiler and heat pump is what’s needed – and that’s a conversation to have with a heating engineer and energy assessor.

Clients target compliance

Based in Lancaster, our work takes us all over the country, working with national companies. This includes James Hall – assessing their new-build SPAR convenience stores, focused on compliance with Building Regulations and achieving a net zero building (A-rated EPC), and partnering with Bradley-Mason to deliver the fit-out works at 35 Toolstation branches so that they comply with Building Regulations and landlord green clauses.

These clauses are becoming a new trend where tenants are bound by the lease to not degrade the EPC rating of the building due to their alterations and fit-out works. We’ve also been working in partnership with Bradley-Mason on several fit-out projects for other trade counter clients such as Wolesley Centres and Nisbits.

A further ongoing project is with Assura plc; after completing 400 surveys to ascertain their baseline EPC ratings, we reviewed the whole of their medical centre portfolio utilising arbnco’s powerful simulation software to highlight the enhancements needed to achieve an EPC band B. This ongoing programme – supporting Assura’s SixbySix strategy – involves assisting with due diligence when acquiring medical centres, and we are now surveying 120 buildings following completion of the enhancements.

Invaluable assessments

We always advise that when refurbishments are being planned, it’s imperative to engage with the client to clarify their aims and objectives and then working within a collaborative group – including the design team and energy assessor – to develop a strategy that will achieve the client’s goal. Unfortunately, some landlords are not so well organised; we still come across far too many instances where we have received enquiries for an EPC after the refurbishment works have already been completed without a prior assessment, which puts the development at risk of non-compliance with the minimum EPC regulations. That’s why a thorough assessment of the building’s fabric and building services can be invaluable along with early conversations about the aims for the project to ensure the right measures are implemented.

While the government might possibly delay the change in commercial landlords’ obligation to get a B rating due to rising cost-of-living issues and there’s also a question around what they can actually afford, it’s clear that the rise in fuel costs and further planned hikes in energy efficiency standards make carbon-reducing measures a smart investment for landlords and tenants alike.

Article by Jonathan Murton

Managing Director at Murton & Co

Jonathan is a member of the Royal Institution of Chartered Surveyors (RICS), with over 20 years’ experience as both a surveyor and consultant to the building industry.

He is a qualified energy assessor, for existing and new buildings, and employs modern surveying techniques to apply his craft. These include CAD, 3D-simulation and building information modelling, as well as the use of unmanned aircraft for aerial surveys. In the past, Jonathan has trained up aspiring energy assessors and created bespoke courses for City & Guilds qualifications. He has also worked as an RICS counsellor for the Assessment of Professional Competence (APC) programme and as an advisor for the government’s Green Deal.

www.murtonandco.uk

Contact our expert team banner

12 common commercial lease terms and how they affect your tenancy

Posted on by bradley.mason
Insurance Consultancy Advice Hero Image Contact our expert team banner

Before taking on a commercial lease, it’s important to check the document carefully. Obviously, this applies to any legal contract, but smaller business owners in particular may be unfamiliar with the terms and conditions that go with the leasing of premises – be they office space, a shop or restaurant, a workshop or medical establishment.

A lease should always be agreed in writing (though there are some cases where a verbal lease agreement may have the force of the law) and it is imperative that you review the rights and obligations set out in the document with a fine toothcomb before committing to it.

 

At Bradley-Mason, we deal with a wide range of clients from a variety of sectors including hotel, leisure & tourism, healthcare, retail, industrial and property sectors, advising on building consultancy and compliance, acquisition, occupancy and disposal with a portfolio of specialist services. We’ve put together an overview of some of the most common terms used, and what they could mean for your business.

  1. Security of Tenure

The document should state whether the lease is protected by the Landlord & Tenant Act 1954 or whether it is contracted out of that Act. If you have security of tenure, you have the right to a new lease at the end of the existing one. If not, you will have no such right and can be evicted immediately upon the expiry of the lease.

  1. Rent

The lease will stipulate the rent amount, when it is payable and sometimes the mode of payment too (e.g., direct debit or standing order). Monthly rents are often paid quarterly in advance on the ‘quarter days’ of 25th March, 24th June, 29th September and 25th December. Typically, there will be no formal demand or invoice issued, though you will likely have to pay interest at a specified rate on late payments.

  1. Rent Reviews

A rent review clause specifies when the rent will be reviewed and may be adjusted – typically every 3-5 years – to ensure that the landlord continues to receive the ‘market rent’. The technical and legal process to establish the new rent will be specified in the least, with ‘upward only open market rent reviews’ being the most common.

  1. User

The ‘user’ clause relates to what the leased property is permitted to be used for and, importantly, whether there are any restrictions or limitations in place that could be a problem for your business. While you are doing your research, also double check that any and all necessary planning consents have been obtained.

  1. Repairing Obligations

Most new commercial leases are granted on a full repairing and insuring (FRI) basis, meaning it is the tenant’s responsibility to carry out repairs and pay for premises insurance. Every lease is different when it comes to specifying what exactly is meant by ‘repair’, and unsurprisingly this is one of the most hotly disputed elements of commercial leases.

  1. Dilapidations

Tenant responsibilities in terms of dilapidations, reinstatement and fittings & fixtures are critical to understand at the beginning of the lease, since you will be required to return the premises to a specified state of repair (e.g., its condition at the start of the lease term). Consult with a specialist dilapidations surveyor to understand and manage your obligations and dilapidations costs.

  1. Lease Term

The lease ‘term’ is the duration of your tenancy, which is usually negotiable. Typical leases can be 3-5 years long, but longer lease terms for up to 25 years are not at all unusual. The important thing is to ensure that the lease term suits your financial projections and business objectives in the short, medium and long term.

  1. Subletting and assigning

Are you able to sublet some or all of the property to another party, so that they become your de facto tenant? Are you able to reassign or transfer (i.e., sell on) a remaining lease term to another party? If so, are there any restrictions, or could you still be held responsible for rent and other commitments in case the incoming tenant doesn’t honour them? It’s a legal minefield that needs careful scrutiny.

  1. Alterations

Another potential minefield is the area of the tenant making alterations to the building. What structural/non-structural changes can you make and do you need the landlord’s formal consent by way of a Licence to Alter? Will you have to reverse the alterations at the end of the lease term as per your dilapidations obligations?

  1. Break Clauses

Many commercial leases include a break clause, giving the tenant the right to terminate the lease early, for whatever reason, by giving notice in writing at a specified time. The greater flexibility may be just what a growing business needs. However, if the landlord also has the right to break early, this can create unwelcome uncertainty for your business.

  1. Service Charges

Carefully check your obligations with regard to the upkeep and maintenance of any shared spaces or communal grounds. Most leases are ‘triple net’, meaning you pay rent, your share of property taxes and your share of Common Area Maintenance (CAM). There will also be an amount payable for Capital Expenditure (major building repairs, e.g., repairs to roof, foundation or HVAC installations),

  1. Personal Guarantee

While many landlords prefer individual business directors to provide an additional personal guarantee for their commercial lease, this is something that you can negotiate. Where possible, personal guarantees should be avoided or, at the very least, limited to a portion of the least term. Taking independent legal advice is highly recommended.

 

At Bradley-Mason, our team has a wealth of commercial property experience and can help both landlords and tenants with a range of Commercial Building Surveys, Building Consultancy, Access Consultancy, Schedules of Condition, Dilapidation Surveys and much more besides. With five offices throughout the UK, we are ideally placed to meet your needs, wherever you are based. Contact us for details.

Contact our expert team banner
Call Now Button