Stiles Harold Williams - Case Studies
Stiles Harold Williams case studies.
5 February 2010
PLANNING AHEAD – IN GOOD TIMES AND BAD
In advising our clients of their budgeting needs it is sensible to look beyond the next 12 months and anticipate what major works may be required over a longer period – say 10 years. This allows a reserve or sinking fund to be maintained at levels that avoid significant fluctuations in charges payable when works are due. This principle has been so successful with our managed clients that our building surveyors are continuously instructed on a number of properties for non-managed clients.
The intention is to avoid unpleasant surprises and prioritise works in a planned, rolling programme which is reviewed on a regular basis.
What are the key principles to observe in compiling such a programme? Firstly have one eye on your legal obligations to lessees and superior landlords to carry out cyclical repairs and redecoration. Secondly look at the major elements of the fabric that may require work over the period, for instance window or roof renewals. Then look at the service elements which may often be overlooked in the normal scheme of things. This will include mechanical and electrical plant as well as incoming electricity, water, gas as well as drainage. Lastly remember heath and safety issues and any remedial works recommended following your risk assessments. This may include asbestos removal, upgrading of water tanks and so on.
In certain areas more specialist advice may be required both to anticipate future life expectancy of plant or equipment and costing of works that may be required either to keep services going or to replace them. The older the building the more likely these issues will occur.
The costs of each element are assessed by the surveyor or specialist consultant and allocated to a particular year in the plan. Costs are kept under review bearing in mind experience with ongoing works, general economic conditions and cash flow. The client’s final priorities are often more budget led rather than simply based on professional advice. However the main point of the plan is as a budgetary tool to assist the client in providing for future commitments whilst balancing the books. In the end people want to know what the bottom line is going to be and then tend to work backwards to determine prioritising within a budgetary framework.
It is simply good housekeeping to try and identify your long term costs and budget for them gradually by setting money aside. It should also assist the sales process if the major works plan and future budget levels are predictable. This is particularly important when we take over buildings which may not have had the level of investment needed to maintain the structure and services for some time. A backlog of works means that your plan will be front loaded to an extent but demands should come down over the period. Priorities can be reviewed and reassessed as time passes and conditions change and it is an essential framework for planning your future maintenance and budgetary regimes.
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