The team at DMP were recently commissioned by a group of residents living in a block of apartments in Beverley.

After enquiring with us about a number of issues relating to the condition of the property, the large flat roofs became our immediate focus. The roof area had barely been repaired since the apartments were built in the 1960s and had started letting in water – and now the roofs are in desperate need of replacement.

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Following our survey, it came to light that the funds collected via the service charge had been insufficient over the years and would not cover the cost of repairs.

For each resident, the shared costs are expected to be approximately £10,000 per apartment and residents would be required to pay for the much-needed repairs, out of their own pocket.

Some of the residents have lived in their apartment for decades, whereas other are more recent – this news came as quite a shock to all.

The service charge for any building will include maintenance and repairs, insurance of the building and, in some cases, provision of central heating, lifts, porterage, estate staff, lighting and cleaning of common areas etc.

It could be you!

This also affects commercial properties. The leaseholder is required by the terms of their lease to pay the service charges and ground rent as determined by their lease in advance of the anticipated year’s expenditure. Any non payment will result in a breach of the lease.

What would you do if the worst happened to your school or business premises such as fire, gas explosion, earthquake, etc.?

Once the situation has been brought under control, the insurance company visits the site to establish the extent of damage that has occurred to determine their responsibility.

If ultimately your property is found to be under-insured the likelihood is that you will receive a payment from the insurer for the sum insured which could much less than the monies required to restore the premises back in to its original condition.

Can you or your company afford this to occur?

The main way to ensure that you have done everything you can to avoid this kind of situation occurring is to ensure that you have an up-to-date reinstatement valuation undertaken of the premises. This will provide a realistic day-one estimate of the rebuilding costs, on which to establish the correct level of insurance required.

Until recently the process of calculating this rebuild cost was to undertake a measured survey of the premises and with the application of a schedule of rates per m² for each type of building classification from office to classroom, a sum was determined. Following an increasing number of insurance claims falling short of the sum required to rebuild, the insurance regulators and the RICS have established a change in the rebuilding calculation. This method determines that an elemental view of the buildings is used to calculate the costs, from foundations to roof finishes and everything in between in order to obtain a realistic sum.