Types of inspections
Management: As a managing agent or a leaseholder with building management responsibilities, you should plan routine management inspections. Where there is a management contract, the frequency of these inspections may be specified. You will arrange, and could probably carry out, these inspections yourself.
Building: You may also need to engage and pay for third party professionals to undertake building condition or structural surveys as part of your long-term maintenance planning.
Insurance: Your insurer may require inspections and surveys as part of the terms and conditions of the policy. These may be inception surveys, taken when an insurer accepts a new building as a risk on its books, or loss adjuster surveys following a claim.
You may need a building valuation survey for insurance purposes, which is a valuation of the rebuild cost to determine the right level of insurance cover needed.
Management inspections
Managing agents are expected to keep abreast of repairs, maintenance, insurance and contract renewals, and improvements, so regular inspections can help to ensure that nothing is missed.
As a managing agent, a personal visit can be helpful. Consider walking round the property with a leaseholder or director of the residents’ management company. Using a checklist and taking photos to back up your findings will allow you to document the visit.
However, this can be time-consuming, so it makes sense to agree how often they will be carried out at the outset of a management contract: weekly, monthly, or even annually.
This may depend on the condition of the building, any underlying issues with leaseholder behaviour or compliance with covenants and the management budget.
What should you include in a management inspection?
There are apps and software services that can help you to plan your inspection of common parts of blocks of flats. It’s a legal requirement that all blocks of flats have a health and safety risk assessment of the communal areas. It’s key the areas of concern that you need to keep an eye on have already been identified.
Electrical safety is also important. Owners and agents should ensure that the fixed wiring in their building is inspected by a professional a minimum of every five years. In between you should look for damage to wiring, insulation, light switches, and sockets in the common areas on every inspection visit.
You should also check that fire precautions are being adhered to, ensuring fire doors are not propped open and any fire extinguishers you do have are in date and in good condition.
As well as these key concerns of electrical and general fire safety, other areas to look at during a planned inspection are:
- Were all repairs and maintenance work carried out since the last inspection completed to a good standard?
- Are gardeners, cleaners etc. fulfilling their contracts and is the standard of work good?
- Is there anything unexpected that you’ll need to action before the next scheduled inspection, especially if it is an urgent safety issue like a loose carpet or handrail?
- Are the common parts in general good order? Parking, rubbish disposal, mail piling up – these are all examples of molehills that can turn into management mountains if you don’t address them.
Building inspections
Building condition surveys can be be part of a regular planned maintenance programme and the type, frequency and cost of inspection will depend on the age, general condition, and maintenance history of the building.
The types of building inspections can include:
Valuation inspections – these can provide an estimated value for a mortgage provider. They are not to be confused with an insurance valuation, which focusses on the rebuild value you will declare for insurance purposes.
Obvious defects, such as damp or subsidence, will be reported, but while anyone applying for a mortgage will be required to have and pay for this independent valuation, it is unlikely they will receive a copy of it.
Building condition reports – these are a visual inspection of the condition of the property, carried out by qualified surveyors to assess the physical, mechanical, and electrical condition of your buildings.
Such reports highlight issues but do not provide advice or specific recommendations for remedying them.
Building surveys – these are an in-depth and can include advice on defects, repairs, and maintenance options. Building surveys are generally recommended for older buildings (50 years+) or non-standard structures.
Often known as full surveys or structural surveys, they can offer advice on everything from damp and insulation to information on services such as gas, electricity and water. Potential legal concerns will also be flagged. Do remember that surveyors aren't qualified electricians or gas engineers and as such cannot test the gas or electrical installations.
Insurance surveys
It is a requirement that you make full and honest disclosure of relevant matters when arranging insurance. A reliable broker partner, especially one that is trusted by insurers to have delegated power to write policies and settle claims directly, can help you through the disclosure process.
Even so, an insurance policy may be issued subject to survey, especially on larger blocks. When you receive the survey findings you must act on any recommendations and requirements.
It may be months before this ‘inception survey’ is arranged by the insurer, but any losses that arise before the survey and are caused by something you should have disclosed when you took out the policy may not be covered.
You might also need to check the value of your building for insurance purposes, so you have the right building declared value (BDV) on your policy. Insurers may just index link the original value you gave them, and any discrepancy will be compounded over the years. If you are, say, 20% underinsured, then every claim could be reduced by 20%. If an insurer advises that they wish to survey your block then they will generally do so at their own expense.
Who pays to act on the findings?
While many of the findings of your inspections will be within scope of the service charge budget, what happens if leaseholders raise queries?
The Leasehold Advisory Service points out that modern leases are likely to include an obligation on the freeholder to comply with statutory requirements, with a right to recover the cost of this from leaseholders. Others may have a sweeping up clause written to cover unforeseen items of expenditure using wording like “expenses incurred for the benefit of the building” or “expenses incurred in the interests of good estate management”.
Blocks of Flats Insurance from Gallagher
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