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Damage limitation


QUESTIONOurblock of flats ishavingreal problemsovermajorworks.Theyput upscaffoldingtodoall thepaintingand brickworkrepairsandthen thesurveyor toldusthatnowhe’shadacloserlook, the brickworkisinfarworseconditionthan hethought,andquite alot ofwindowsare rottenwhichhehadnotallowed for.He basicallywantstore-writethecontract with thebuilderandthecostsaregoingto beaboutdouble.Someofuscannotpay.The surveyorsayshetoldourRMCo. Directors heought todoapropersurvey fromacherry picker first,but theywouldn’tpaythecost. TheDirectorsare just tellinguswe’vegotto payorthebuilderswillpulloff siteandwe’ll havepaid forall thescaffoldingfornothing. What frightensmeis thatpeoplewillstart suingeach otherandourmoneywillget spentonlitigation,notbuildingworks. Wheredowegofromhere?


ANSWER You’ve startedofffacingthe right direction! Lawyerslookbackwards,ask themselveswhat went wrong,who is at fault, andhowmuch arethey(or theirinsurers) goingtopay?All very interesting(forthem), highly unproductive (for you) anddoesn’t answeryourquestion: lookingforward–where do we go fromhere? Let’sjustlistthe problems:(a) raisealot


ofmoney fromthelessees,someofwhom areskint;(b) thenew work is notcovered by theoriginalS.20consultationprocess; (c) make sure the surveyor and the builder don’t ripyou off;(d) anydelayswillrackupextra


Flat Living Autumn2012


scaffoldtimeand hire costs; (e)the rotten windowsare probablynot servicecharge costs (I assumethe windows are part ofwhat is demised to each flat); (f) avoid civil war and rapaciouslawyers. Experience teaches us that civil war, or


running around likethe proverbial headless chickens andfailing to getagriponthis, is your worstrisk. Somebodyneedstosit down with your surveyor andmanagingagent (you do notmention one, Iassumeyouhaveone) andput together aplan. AreyourDirectors up to it?Dotheyneed extrasupport?Dotheyneed tomake wayfor somenewdirectors? Youneed to satisfyyourselvesthatthe


surveyor andthe builderare beinghonest and fair with you and get a letter fromthe surveyor explainingwhy this was not foreseen and howhecan assure youthatyou will notbe overcharged.Makeabsolutelysurethere is no more badnewstobedelivered.Thatneedstobe in writingfor presentationtoall lessees. AnemergencyS.20consultationprocess


with reducedtimelimitsneedstobesent out, alistoflessees with no wayofaffording theirshare of theextra costsneedstobe privatelymade up,sothatthe scaleofthe financial shortfallproblemcanbeassessed,


Thosewhocannot pay arein very difficult circumstances


Areyour surveyor andbuilder being honest and fair with you?


and an eveningmeeting for all lessees needs to be called. The surveyor should attend; the buildermay


wish to attend because he has to assess hisown risks. Theconductofthatmeeting is critical.Do nottakeunnecessary risks. Speaktoasmany lesseesaspossible beforehand:answer their questions truthfully, do notallowfalserumours to spread, let themvent their anger and keep stressingthe“we’re lookingforwardtothemost effectway outofthis”message. Avoidjoining in anytalkofrecriminations


if youcan,but do show asincere appreciation of theproblem.Itwillnot be easy.The object is to pull themajorityalong with you, andto agreepayment planswhich, as faraspossible, fit in with thecash-flowrequirementsof the contract. You will have problemsif some people are given additional timeto pay, and thosewho paypromptly will wantassurances that others will be pursued,encouragedto approach their mortgagees for additional funds, legal fees recovered and interest chargedwhere appropriate, or the prompt payers will not pay, and that is a risk you just cannot afford to take. TheDirectorsmayhavetoorganisealoan


facility andifthatisfromaHighStreet bank,Directors’guaranteeswillalmost certainly be required.Thosewhocannotpay areinverydifficult circumstances andone wayoranother that problemwillhavetobe addressed.There is no soft option around unless youhavesomefairy godmothers amongst theother lessees. Before youstart,a bullet-proof vest will be useful!●


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