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Commercial Advice Residential Advice

What is a Building Reinstatement Cost Assessment (BRCA)?

If you own property, no matter what size or for what purpose, you need to ensure you’re insured to the right level should anything happen. This is where we come in. A BRCA refers to a Building Reinstatement Cost Assessment (BRCA), often known just as a Reinstatement Cost Assessment.

Giving your insurers a rebuild figure for your property is not as simple as it may initially sound. If you’re underinsured, you could face a significant shortfall in funds to cover costs in the event of a claim, and if you’re over insured you’ll likely be spending a lot more than needed on insurance premiums. The former is becoming more prevalent in the current market, which has seen significant rises in materials and labour costs, leaving many proper owners at risk.

In fact, recent research has found that 80% of UK properties are under-insured – to put that in context, that’s around 587,000 high net worth homes and commercial property with a total value of £340 billion standing without adequate buildings insurance.

The first thing your insurer will do when you make a claim is check the building is insured for the correct amount. In the event your property is underinsured, many insurance policies will typically revert to what is often referred to as an “averaging” clause.

This generally means the final payout of any claim will be reduced by the degree to which the property was underinsured.

So, if a building would cost £300,000 to rebuild, but is insured for only £150,000 then the insurer consider the property to be 50% underinsured.  This means if you made a claim of £150,000, the insurer would only pay £75,000, 50% of the sum insured.

The activation of averaging clauses is common and many people get caught out. We’ve worked with a number of clients who have received reduced cash settlements. This can be negotiated, however, this method of mitigation is limited in comparison to either having a one-off assessment or request a desktop review to see if there is potential a building is underinsured.

What’s Involved? //

When we conduct a BRCA, we undertake an inspection of your property or properties, and issue you a report with rebuild costs for all of the elements taken into consideration. For example, should a property burn down, we’re not just talking bricks and roof tiles, it’s important to take into consideration costs for clearance of the site, new plans to be drawn up, professional fees, construction and materials costs.

When talking about reinstatement, costs are given to repair, reconstruct or renew assets to an equal, but not better, condition (note: we’re afraid a BRCA won’t estimate the costs to add a swimming pool or a few outbuildings, but will focus on reinstating a like for like property).

Our assessments include visiting site to conduct an inspection and measurements, and issue you with a report you can understand and get the most from. We report on an extensive range of properties of all shapes, sizes and uses, so you can be assured we’ve seen it before and know how to assess the reinstatement value of your property accurately.

Recommendations and Further Advice //

The RICS recommends existing BRCAs are reviewed regularly, generally every 3 years or upon reinsuring, to reflect fluctuations in materials and construction costs, or undertaken at completion or immediately prior to completion of the sale. An existing assessment should also be looked at again and re-issued if changes are made to the building such as extensions or extensive refurbishment.

This will enable us to make sure all your materials and buildings are fully covered under your insurance policy. You don’t want to spend tens of thousands on an extension or refurbishment, only for the reinstatement value to reflect the original building, so keeping on top of and conducting BRCAs every few years are something to factor in to your budget and maintenance plans.

The Fourth Wall Standard

All our surveyors are members of the Royal Institute of Chartered Surveyors (RICS). With our diverse range of services and experience across the residential, commercial and heritage sectors, including: building design, project management and project monitoring, we’re uniquely placed to ensure your building is adequately assessed and insured to the correct amount.

Get in touch ➡️ our online form is here or contact us via reimagine@fourthwallbc.com / 0161 706 1131 / 0114 400 0254.
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Commercial Advice Featured Our thoughts //

What is a Planned Maintenance Report?

As we come out of what feels like a very long winter, occupiers and landlords across the region are being hit with no end of surprise expenditures. From roof leaks to damaged cladding, properties of all shapes and sizes have fallen victim to the elements.

As we work with a number of occupiers on their planned maintenance programmes for the next 5-10 years, I’ve been increasingly aware of the need to build up our clients’ understanding of their properties as we help them avoid fighting fires and plan for the future.

A Planned Maintenance Programme, often known as a Planned Maintenance Report (PMR), enables both owners and occupiers to plan any necessary works into their budget, an essential step when looking to set reliable budgets, better monitor the financial health of projects and ensure value for money is demonstrated over the life of their property.

It doesn’t take me by surprise that you may be thinking ‘but do I really need it?’. It’s certainly tempting to take things as they come, but avoiding an issue can only last so long and a forward thinking approach is essential. Reactive work more often than not proves inefficient, costly, and in severe cases results in significant failures such as water ingress or structural damage, leading to further impact on business operations and the subsequent negotiation with impacted parties who may have suffered loss of earnings as a result. A painful prospect whether that’s your own business or one of your tenants.

Believe us when we say that regular maintenance is your best friend, helping prevent small issues from becoming larger issues at a later date.

We’ve seen a lot of properties in our time, and the biggest, and most common, issues we come across nearly always stem from a lack of routine maintenance. Ignoring that leak, putting off replacing those roof tiles, and leaving the potholes until they get really bad always lead to more issues down the line. If you’re leasing a commercial space, it can also mean a pretty hefty bill when it comes to your dilapidations responsibilities during or at the end of your lease.

Given the increasing need for efficient use of our resources, energy efficiency in the built environment and reducing waste, regular maintenance is an essential way of reducing deterioration of buildings and preventing unnecessary damage, ensuring properties operate at optimum efficiency, protect the health and safety of occupants, and ensure continued compliance with statutory requirements.

Simply put, a Planned Maintenance Report allows you to anticipate future costs of building work to your property so that you can budget for them and ensure repair works fit in around your business and cause the least disturbance possible. Whilst not everyone is as passionate about buildings as we are, there’s certainly something rewarding in enabling owners and occupiers to proactively maintain, manage and improve their properties for years to come.  

Get in touch to discuss your Planned Maintenance: reimagine@fourthwallbc.com // 0161 706 1131

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Commercial Advice Our thoughts // Residential Advice

Sustainability in Architecture

With the ever-impending climate crisis upon us and changes in living and working practices in a post covid world, the need for sustainable architecture which provides a tangible connection to the natural world has never been in sharper focus. Occupiers, customers and employees are taking greater care when deciding where they work, shop and eat out.  

Biophilic design is focused on connecting humans and the built environment to the natural world through the use of nature in architectural design, be that through new constructions or the redesign of existing buildings.  

For most of us, our natural habit is largely within the modern built environment, through where we both live and work. With more homes being built and the population of cities ever growing, this isn’t changing any time soon. The use of biophilic design seeks to enhance the spaces we spend our time in by incorporating the natural environment and the positive benefits an easy connection to nature brings us, be that through improved air quality or boosted mental health.  

If you’re a city dweller, you’ll likely have noticed one of the most popular concepts of Biophilic Design: green roofs. In 2018, it was found that 32% of all horizontal spaces are unused rooftops, and with benefits for both people and the environment, such as supporting biodiversity and wildlife, improving thermal performance of buildings, and allowing people to take a physical and mental break from the stress of work by connecting them to nature, green roof’s are becoming increasingly popular atop city centre office buildings, apartment blocks and retail spaces for this reason.  

From Stockport to San Francisco, biophilic design is being used to transform corporate spaces and add greenery to industrial areas. As part of a multi-million-pound regeneration scheme, a two-acre park atop Stockport interchange has been given the green light in an attempt to offset carbon emissions and give further green space for locals to enjoy. On the other side of the pond, ATXK have been inviting nature inside their offices to help employees feel a sense of freedom in a positive, healthy workspace. 

Biophilic design incorporates three key principles; Nature in the space, referring to the direct presence of nature, Nature of the space, focusing on taking inspiration from the spatial configurations in nature, and Natural Analogues, which uses indirect methods to reflect nature. The use of these principles drives towards a fundamental goal of Biophilic Design: to create a good habitat for people inhabiting modern structures, landscapes and communities.  

If you own or manage property and are keen to incorporate nature, but a green roof is a stretch too far, incorporating biophilic design through the use of living walls is an option for both interior and exterior areas. Both contributing to improved air quality and acoustics, along with better productivity and creativity, living walls have been noted to significantly increase workplace satisfaction. In our home town, Sheffield Hallam University have made use of this, redeveloping the atrium at their city campus to make use of biophilic design features such as living walls, whilst over in New York, Luxottica have been making use of living walls in their main office breakout space to encourage a relaxed and social space for employees. 

Even small changes to an office or retail fit out specification, such as the use of natural materials and colour pallets in favour of previously desirable and low-cost composite plastics and metals, can help evoke a connection to nature within the great steel and concrete boxes we call our urban built environment. As businesses begin to encourage employees back to the office, biophilic design is certainly something for property and business owners to explore.  

Looking to the future, we cannot deny the need for more sustainable choices in the way we live and work. Biophilic design presents opportunities for both residential and commercial property to improve the environment for those living and working in these spaces by incorporating nature and greenery simply and effectively into everyday life. With questions still arising over how to adapt cities post-Covid, we’re expecting to see the use of biophilic design increase in the years ahead. 

Categories
Beginners Guide Commercial Advice

Understanding Dilapidations

In all tenancies, agreements are made in relation to the condition of the property and whose responsibility it is for repairs and maintenance, so it’s important to understand your rights and responsibilities at any stage of leasing out or renting a property.

Put simply, dilapidations are the costs involved in returning a property to its original state prior to being let, such as repairs and reinstatement works for any alterations made to the property by the commercial tenant.

If a tenant doesn’t keep the property in the state agreed, the legal covenants and relevant dilapidations case law will apply and landlords can serve a schedule of dilapidations to a tenant, which will form the basis of their claim. The dilapidations process takes place either during or towards the end of a commercial lease and involves assessing any disrepair of the property, breaches of lease agreements, where responsibilities lie, and how much it will cost to remedy.

Disputes can arise between landlords and tenants over this process, so to reach a suitable conclusion when dilapidations claims are made, each party will appoint professional representatives in the form of surveyors, as knowledge and experience of construction and dilapidations case law is essential to handle the dilapidations claim process.

Your surveyor will provide you with the expertise and guidance to ensure a fair and reasonable settlement is reached, providing advice on timescales, risks and costs.

They should advise on your liabilities under a commercial lease, and provide a thorough evaluation of the condition of the property, determining the extent of any breaches and negotiating to find a solution that’s beneficial to all parties.

At Fourth Wall we bring a wealth of knowledge and experience to support both landlords and tenants, so if you’re entering into a new lease, considering leaving or have left your premises, get in touch.