UK Surveying Directory

RMA Surveyors Ltd are now registered with UK Surveying Companies. The UK Surveying Company is a directory of UK based surveyors offering quantity, building, property & land surveying services.

New JCT Contracts now available

JCT Minor works building contract front pageThe Joint Contracts Tribunal published a new 2011 suite of contracts and sub-contracts which are designed to comply with the provisions of Part 8 of the new Construction Act which came into force as of 1st October 2011.

The JCT Contracts 2011 edition reflects new legislation in regard to payment and makes other changes which include:
•    A revised definition of insolvency
•    Integration of the revisions appended to the 2005 form of contract
•    The provision for appointment of the principal contractor under CDM Regulations is extended to cover that function under the Site Waste Management Plans Regulations 2008
•    Reference to the Bribery Act 2010
•    Entries in relation to PI insurance and asbestos and fungal mould are omitted
•    Revised retention provisions in the sub-contracts

RMA Surveyors Ltd will be using the new form of JCT contracts where appropriate.

Independent Advice for Building Insurance Claims

Cracked wall caused by impact damageIf you have suffered an insurable loss to your building, did you know you are entilitled to appoint your own independent building surveyor?

RMA Surveyors Ltd are experienced experts who understand how the insurance reinstatement process works at all levels. Richard Mountain MRICS gives an insiders view to the corporate loss adjusters reinstatement operates.

Previously I worked for a major UK insurance loss adjuster, within their building surveying and project management department. I oversaw reinstatement of flood damage, fire damage, impact damage and malicious damage to residential property and commercial property insurance claims.

I project managed in excess of 25 insurance reinstatement projects at any one time (many project managers had as many as 50 ‘live’ projects), all at various stages of the reinstatement process. I covered a 2,500 mile2 geographical area. The volume of work was phenomenal. The role required assessment and reporting of the initial damage compilation of specifications and tender documentation, tender issuing and tender analysis and monitoring the execution of the building contract to completion. Inevitably, delivering the volume of projects in the required time meant that the role was highly pressurised and very time consuming.

I learnt a great deal in my time dealing strictly with insurance reinstatements. Principally, like any business, the primary goal is to generate profit. Secondly, large loss adjusting companies are set up to generate as much profit from insurance claims as possible. They do so through structuring a claims process in such a way that policy holders are steered in a direction towards services or subsidiaries of that company.

Typically a loss adjuster visits a claim. He makes an assessment of the claim and whether or not it is straightforward (e.g. a collapsed ceiling) or more complicated (e.g. a flood damaged block of flats). In the latter case he will refer the work to an in-house surveying department. A surveyor will be appointed to act on behalf of a policy holder. S/he will assess, specify and tender works to a list of ‘approved’ contractors. The succesful ‘approved contractor’ will then complete the works.

In such cases a loss adjuster’s fees are typically capped at a low figure, and treated as ‘loss leaders’. This is done in the same way supermarkets expect to lose money on basics such as bread and milk, in the hope that you will be tempted by other goodies on the way round the store. Larger fees are accrued when the surveyor gets involved.

As with any surveyor dealing with this type of work, in-house firms of surveyors and project managers will receive fees typically in the region of 10% of the net contract sum. Coupled with this ‘approved contractors’ pay a percentage back to a central contractor administration unit (also owned by the loss adjusting company) for each project they successfully tender. Ultimately the loss adjusting company can generate in the region of 18% of a net contract sum from each project, making the ‘loss leader’ adjuster’s fee a worthwhile endeavour.

What does this mean to a policy holder? Well, on the face of it not a great deal. The structure behind the system is rarely explained in any great detail to the policy holder and rarely do they want, or need to know. Only when the level of service begins to be affected does it become a problem. My experience is when problems occur it is usually the policy holder who loses out.

By way of example, a recent claim I took over as an independent surveyor had a contractor making many unfair and unsatisfactory expectations of my client, the policy holder. I was provided with a two page specification, compiled by the contractor, and a four page letter of caveats and impositions expected of the policy holder by the contractor that formed the basis of the building contract. The whole project was strongly weighted in favour of the contractor. I had no choice but to compile a proper specification and tender the project to competent contractors, effectively taking the policy holder back to square one. It had taken him six months to get as far as he had. The process took a further four months for me to complete. But we managed to do so using a good contractor, under an industry recognised form of building contract for a competitive and realistic contract sum.

For contractors to become ‘approved’ by the loss adjuster’s central administration body they need to meet a lot of separate criteria. They need to have a workforce, who are adaptable and can react quickly. They need to be geared up to visit a property with a leaking pipe within an hour of a phone call. Coupled with this, most of the insurance claims work they deal with is typically low-value, small-scale and does not require a project manager or building contract in place.

Good building contractors are rarely suited to this type of business model tending to deal predominantly with larger contracts. Therefore, it is very difficult to secure ‘approved contractors’ who can meet the needs of a larger building contract. I once went to five of my project sites in a single day and not one of them had any personnel on site. This was in spite of the fact that I had specifically cited this as a clause in the specification. I found that contracts were poorly managed on site and beset with problems in terms of quality and understanding of material performance. When employed by the loss adjusters I was not allowed to use any other than the list of ‘approved contractors’. This was a major frustration for me.

At the outset, it is down to loss adjusters to explain that policy holders are able to use their own independent surveyors. I often found that policy holders did not understand, as it was not explained, the difference between the surveyor and the loss adjuster. Policy holders often seemed compelled to remain with whoever was assigned to deal with their case.
The insurance reinstatement claims I have dealt with as an independent surveyor are wholly different. All of them have been far easier to execute without the constraints of a corporate enterprise behind me. I am not overworked and would not take on a project unless I knew I had the resources to deal with it.  In every project I have had the fortune to appoint good local independent building contractors, who have performed admirably to ultimately benefit the client.

I would recommend to anyone who has the misfortune to suffer an insurance claim that they appoint an independent chartered building surveyor to oversee the reinstatement works. The cost will be covered by your insurance policy. We will bring peace of mind, as you can be sure that you are using a qualified construction professional, who understands the construction industry and has you and your building’s best interests as their primary concern.

If you have problems with getting your property adequately reinstated please contact us RMA Surveyors Ltd will be pleased to look at your case and provide initial free consultation.

Richard Mountain MRICS

Party Wall Pitfalls

Increasingly I find that neighbouring owners attempt to use The Party Wall etc Act 1996 to try and prevent works from going ahead. In actual fact the Act gives homeowners the right to complete work where a party wall or party structure is likely to be affected. It is not an injunction or method of prevention.

On several occasions I have attended a site to meet with a neighbour who does not want works to begin and is intent on pulling out all the stops to prevent works going ahead. In my experience the neighbour has usually had no notification that works are going ahead. The first they knew about it was when a spade struck the ground and lifted them from their slumber, or a planning notice letter fluttered onto their doormat. This is the crux of many party wall issues and I will come back to it later. In some cases the neighbour will, by any means necessary, try to prevent works. Inevitably they turn to the Party Wall Act in the hope that this legislation will curtail works.

In fact the opposite is true. To add to their frustration a surveyor appointed to act in regard to their interests is actually acting in the interests of the wall. They must act impartially in agreeing an award. Any surveyor who claims you are their ‘client’ and are acting in your interests in regard to a party wall award is misinformed. It is worth reiterating that the person undertaking works is known as the Building Owner and the neighbour is known as the Adjoining Owner. A Party Wall Surveyor acting on behalf these parties is either the Building Owners Surveyor or the Adjoining Owners Surveyor. Once appointed the surveyor cannot be disinstructed to act on behalf of an owner, and the terms of an award can only be contested in the county court.

A Party Wall Award will determine the right to execute works and govern the conditions by which work is completed, specifically in relation to works affecting a party structure. I recently completed an award where around 1% of the contract related to works affecting a party structure. The adjoining owner was reasonably disgruntled that the remaining works proceeded without the requirement for consultation.

At worst issuing party wall notices and agreeing an award is an inconvenience and extra expense for a building owner. Unless the award is particularly protracted or complicated, a surveyor will limit their fees by minimising time spent as much as possible. Were a party wall award not in place and an adjoining owner’s building was damaged, party wall surveyor fees compared to potential costs and legal fees are a drop in the ocean.

As previously stated many party wall instructions arise as the works are already being disputed because no negotiation with the neighbour has taken place prior to a planning application or a spade in the ground. In my experience the quickest route to preventing a protracted and bitter dispute with the neighbours is to go round and talk to them in the first instance. Tell them what you plan to do, why you plan to do it. Make them feel involved, it costs nothing and could save you a lot in the long run. Explain that you will be issuing a party wall notice and do so in plenty of time. Always suggest a schedule of condition is undertaken, even if works are not being disputed and no award is required. Remember, when the builders dust settles and the professionals have all been paid, your neighbour will still be there to glare or smile at you over the fence.

If you have a party wall issue or require some advice please contact us. RMA Surveyors Ltd will be happy to give an initial free consulation to ascertain your requirements.

Richard Mountain MRICS