RICS Draft Guidance Note: Planned preventative maintenance of commercial and residential property, 1st edition

Planned Preventative Maintenance, RICS guidance note, 1st edition

2 Client instruction

The principal requirement of a client instruction is to formalise the client's request by instructing the surveyor to undertake a PPM survey according to a defined scope of services.

PPM surveys utilise a methodical and systematic inspection or analysis of an asset, so it is feasible to use a generic format for client instructions that is transferable between different properties. However, RICS members should acknowledge the possible unique combinations or characteristics of different clients and properties, and treat each client instruction on an individual basis.

RICS members should make the client aware that the PPM survey does not replace the obligation for the building to comply with statutory procedures, and will not amount to or replace the relevant requirement for obtaining statutory compliance reports.

2.1 Initial discussion

In order to ensure that clients receive the most appropriate advice, RICS members should engage in an initial discussion to develop an understanding of their requirements. RICS members should begin by requesting information about the property from the client. This should include confirmation on ownership and any lease arrangements.

RICS members should also establish the tenure, type, nature, size and age of the property in order to ensure they have the necessary experience to undertake this. An understanding of the characteristics and complexity of the premises will allow RICS members to estimate the time required to undertake the survey and report. An appropriate fee can then be calculated, reflecting the timescales involved.

2.2 Client expectations and requirements

Clients obtaining PPM advice for their residential or commercial property should receive the following benefits:

  • an understanding of the general construction detail and condition of the property, including the presence of defects and suitable recommended remedies. Clients should also receive information concerning the potential risks associated with the cause and effect of defects, including the possibility of unchecked defect evolution
  • sufficient advice to ascertain and prioritise immediate, short-, medium- and long-term repair or replacement
  • appropriately detailed information concerning the costs necessary to programme property maintenance or facilities management, including cost liabilities, and
  • robust information to support evidence-based negotiation for vendors, purchasers, landlords or tenants.

RICS members should establish any specific requirements that the client may have regarding the end use or purpose of the report.

While it is acceptable to receive an instruction where a client wishes the report to only address defects above a certain price threshold or within a limited time period, this may result in them receiving a report that does not accurately represent the current asset condition. For example, setting a cost threshold to report only defects above a certain threshold and limiting this to within a five-year period does not represent low-cost defects that have potentially damaging consequences. The client should be informed of the associate risks, limitations and exclusions. Where minimum cost thresholds are imposed, this does not absolve RICS members from identifying defects and notifying the client of their presence and potential evolution.

RICS members should state in the client instruction, as well as the subsequent report, any conditions imposed by the client. Furthermore, any future reliance letter or reliance clause in the contract (typical for PPM in vendors' packs) should state that the report findings are based upon the conditions and/or limitations of the initial client instruction.

RICS members are expected to deliver a comprehensive technical PPM survey, but it is acknowledged that some clients require this to be amended to reflect available budgets. While this can be done, it does not absolve the RICS member from informing the client of all relevant defects and issues. The survey can then be adapted into a PPM programme from the perspective of the 'service charge' or 'budget', where items (as discussed with the client) are prioritised and/or omitted in line with the funds available to maintain the asset. This means the client is notified of all the relevant defects or issues, while receiving sufficient cost information to make an informed decision on what to prioritise, and the RICS member has discharged their duty of care.

It is recommended that RICS members should include a completed version of the RICS schedule of PPM services, which has been produced alongside this guidance note, to ensure the scope of instruction is clearly captured with the client.

2.3 Survey type

RICS members should assess the requirements of the client and advise as to whether PPM is the most appropriate type of survey. PPM is essentially concerned with surveying (inspecting and reporting on) an existing residential or commercial property that may or may not be fully or partially occupied. The objective is for RICS members to advise on immediate reactive maintenance requirements that may be apparent, as well as construction elements that require proactive repair or replacement.

In most cases, the property in question will already be under ownership or leased by the client. This differs from the acquisition process associated with technical due diligence (TDD) surveys, in which property ownership or occupation is likely to change. If the property is the subject of a change of ownership, then a TDD survey is more relevant, although it is acknowledged that PPM may be instructed or included as part of vendor TDD information.

The process of undertaking a PPM survey includes a site inspection, which is a similar process to TDD. However, TDD can also involve the technical assessment of development proposals or works in progress (pre-completion), which is not normally the case for PPM. It is possible to forecast PPM in accordance with the building design to ensure that suitable maintenance regimes are in place from day one.

If the client request concerns the repairing obligations of a tenant exiting a lease, a schedule of dilapidations is the likely requirement.

PPM survey reports used by the client to budget, prepare and procure maintenance works may be used as an 'internal' document by the client or their advisors. Once this document is disclosed 'externally' to tenants, end users or prospective alternative investors, it may no longer be fit for purpose. If the client seeks to obtain a report and budget estimate for immediate repairs and/or planned investment, the RICS member should recommend that a building survey or condition survey is more appropriate.

2.4 Key items

The following items should be included in the client instruction, irrespective of the property type or sector:

  • names and addresses of the contracting parties ('consultant' and 'client')
  • date of instruction
  • scope of works: precisely what services will and will not be provided (see section 2.4.1)
  • areas to be inspected or excluded
  • list of agreed/requested documents to be reviewed (see section 2.4.2)
  • all limitations that apply to the advice being obtained and on the scope of the survey/report
  • the use of electronic data collection equipment and reporting
  • programme or timescales for the inspection and report
  • format of the report (e.g. hard copy, PDF, Excel, interactive database or a combination of these formats), with an example
  • the appointment of other experts or subconsultants
  • specific access requirements/health and safety
  • specialist access requirements and restrictions
  • fees and variations to the contract, including the provision for extra works (additional site visits, review of extra technical documents, supplementary meetings, etc.)
  • provision for payment terms and late payment
  • disbursements (specialist equipment, travel, accommodation, etc.)
  • costs associated with subscription to any interactive databases or online access
  • any standard terms of business
  • prequalifying requirements such as non-disclosure/confidentiality agreements, work permits or specific training certificates/courses
  • signatures of all relevant parties to the contract and
  • level of liability and any other cover and limitations.

The following items may also be included:

  • evidence of professional indemnity insurance (PII)
  • arrangements for further investigations/opening up resulting in property damage
  • dispute resolution
  • personal guarantees for payment
  • advance payments and
  • reliance letters or agreements.

2.4.1 Scope of services

One of the most important features of the client instruction is the scope of services. This may be the most bespoke part of the instruction and RICS members should tailor it to the needs of the client, including any specific conditions or stipulations.

The key requirement of the scope of services is to expressly clarify items that will and will not be included in the PPM survey. RICS members should consider including the following listed key building elements and subcomponents. It is not, however, considered to be exhaustive and this should be tailored to the specific building in question:

  • structure
    • substructure
    • superstructure
  • roof(s)
    • roof covering(s)
    • parapet walls
    • rainwater goods
    • roof lights
    • other (chimneys, flues, lightning conductors, access provision, walkways, lifelines or safety fixings, plant room compounds and doors or tenant installations )
  • facades
    • external walls and cladding
    • windows and doors
    • entrances
    • other
  • internal finishes
    • ceilings
    • internal walls and partitions
    • floor structures
    • floor finishes
    • stairs
    • internal joinery (windows, screens, doors, skirtings, etc.)
    • decorations
    • sanitaryware
    • fixtures and fittings
    • passive fire precautions (compartmentation, etc.)
  • external areas
    • access routes/entrance
    • external paving/pathways
    • parking
    • service/delivery yards
    • landscaping
    • other (street furniture, boundary treatments)
  • service installation
    • HVAC supply and distribution
    • electrical supply and distribution (power and lighting)
    • sanitary/water supply, distribution and evacuation (normally excluding sewers)
    • plumbing
    • storage tanks
    • fire detection, alarm and other active fire installations (automatic opening vents, etc.), including firefighting installations
    • lift installations
    • utility connections
    • renewable/sustainable energy
    • automatic sunscreens or power-assisted brise soleil, and
    • other specialist services (trigeneration/photovoltaic cells, etc.).

The client may wish to add to these. Where they decide to omit building components partially or wholly from the scope of works, RICS members should advise on the potential consequences of doing this. Included in this advice should be the risk of cost omissions, as well as the potential for the evolution of defects in the affected areas.

The scope of services should also explicitly detail items in the PPM survey and report that will not be included, such as the internal finishes when those within the tenant demise are covered by existing lease repairing covenants. While the report may include items drawn from other documentation, it is not a health and safety audit, fire risk assessment, asbestos management plan or disabled access audit, and should not be relied upon for these purposes. Where these reports are deemed necessary then they should be advised upon in the outputs of the survey. The PPM survey will also not include tap or adhesion testing or fixing/torque tests.

Within the scope of works, RICS members should inform the client that the inspection is visual, with no attempt being made to open up shafts or concealed areas for detailed inspection unless otherwise requested by the client.

2.4.2 Survey

In the instruction, RICS members should inform the client about how concealed or inaccessible areas will be addressed. Essentially these will be noted during the survey, with an explanation as to why they were not inspected. In the event that areas of the property are not accessible, the potential risk associated with not gaining access should be detailed in the report, as well as a recommendation on what to do to mitigate that risk.

Generally, no intrusive inspection or tests of the services will be performed unless specifically requested by the client. This is particularly relevant to air or water flow rates associated with HVAC. Likewise, no temperature or light/lux recordings will be made unless stipulated by the client. The scope of works should make provision for RICS members to recommend appropriate further investigations if evidence exists to suggest the need for these extra works, such as closed-circuit television (CCTV) inspection of drainage or testing deleterious materials.

2.4.3 Document review

It should be noted that some information contained in the PPM may be drawn from other documentation, particularly statutory compliance documents such as fire risk assessments, disabled access audits or health and safety audits. In practice, these items may not be inspected. For example, it is appropriate to integrate the output from a fire risk assessment that has been specifically instructed to inspect fire stopping, rather than duplicate this aspect of the inspection.

The primary aim of the document review is to determine the scope of repairing responsibility and to identify work items from reports that go into greater depth than the PPM survey. In the scope of services, it is important to confirm any agreed key documents that will be reviewed. In most instances, these are documents prepared by others and the review is to establish their key findings. The role of RICS members is to report the findings of others and not to explicitly verify or confirm the findings (unless specifically requested by the client).

In the client instruction, it is important to agree a list of documents to be reviewed, and to stipulate that these are provided by the client or their agents (property or asset manager). If the agreed documents are not made available for review, RICS members should confirm their absence, assess the potential risk to the client of their absence and recommend a course of action to mitigate the risk. This may include the procurement of missing documents, which should be covered in the client instruction as extra works.

RICS members should request copies of the documents identified in section 3.3.

Where PPMs are commissioned to assist with discharging the repairing and maintenance obligations a party may have under a lease, the scope of services may include the review of lease documentation to ascertain the extent of liability, the demise and the inclusion of M&E plant and equipment. While the review is not specifically to provide service charge advice, lease documentation will improve the understanding of RICS members and enable the PPM survey to be tailored to include only the elements that are relevant to the lease obligations.

2.4.4 Safety requirements

The client instruction should detail the requirement for safe working access, and RICS members should make pre-visit access requests to the owner, occupier or property manager. RICS members should check in advance that roof access can be made, and also if there is a specific requirement for ladder or platform access (disbursement costs), whether internally or externally. Where access cannot be provided to all areas, the client instruction should advise that the RICS member will inform the client of this, any associated risks and appropriate recommendations to mitigate them. This may include the need for specific additional visits, accompanied access to secure or restricted areas, or specific access equipment such as platform lifts, binoculars or drones.

2.4.5 Timescales

In the client instruction, the key dates required by the client for the issuing of the report should be confirmed. Additional dates such as those for visits, interim submissions and payment of invoices may also be included in the timescales.

RICS members should assess the timescale and inform the client as to whether it is possible to achieve the objectives in the client instruction before confirming it. RICS members should suggest and agree to an appropriate and reasonable time that will enable them to complete the scope of services as required by the client. The agreed timescale should be subject to gaining the necessary access to the premises and obtaining all of the relevant documents for review. If safe access cannot be granted or areas of the property are inaccessible, the client instruction should allow for the provision of additional time and cost, if applicable.

2.4.6 Fees

In the client instruction, there should be clarity concerning professional fees irrespective of whether this is a fixed fee or calculated on an hourly or day rate. It should state whether tax (on goods and services) is applicable and whether disbursements are included or excluded. Where disbursements such as travel to the site or subsistence and overnight accommodation are necessary, the value of these should be defined and agreed in the client instruction.

Concerning extra works, there should be sufficient detail in the client instruction to address the basis for the calculation of additional fees (hourly or day rates).

2.5 Confirming the instruction

Both the client and the RICS member should acknowledge the contents of the client instruction by entering into a formal agreement. According to the relevant contract law of the country or region of operation, both the contracting parties should recognise to abide by the terms of the client instruction prior to commencing the PPM survey.