Feature


Common pitfalls for Facilities Managers when overseeing new office fit outs


By Clare Reddy, Partner and Real Estate & Construction Lawyer at Lewis Silkin


Thanks to Covid-19, many of us have not been into the office on more than a handful of occasions in the past 11 months. The debate rages as to the future of work and whether and to what extent offices will feature. Whether it is taking advantage of a period in which the office is lightly used, or as a result of a review of your business’s real estate portfolio, it seems many are planning to carry out some sort of works to property in the short to medium term.


The cost of fit out works is not simply the capital cost, but also any negative impact on the business if things go wrong. We’ve set out below some practical issues to consider at the outset to reduce this risk.


The Contract


Many fit outs in the UK use one of the JCT suite of building contracts. Liaise with your professional team to check your chosen contract reflects your procurement route and the value and nature of the works. Read the contract carefully and make sure it suits your particular circumstances – your project doesn’t necessarily fit neatly in the scenario envisaged by the contract.


If someone is administering the contract for you, make sure they have read it and understand their role. The consequences of not doing so can be costly. Consider what other contracts you need, for example collateral warranties, a parent company guarantee or bond.


Landlord’s Consent


Unless you own the freehold of the building, consider whether you need landlord’s consent for the proposed works. This will depend on the wording of your lease, and the nature of the proposed works. Talk to your property solicitor and consider whether you or your contractor are best placed to approach the landlord for consent.


You must comply with any obligations imposed. Relevant


obligations in any agreement for lease or licence to alter should 12 fmuk


ideally flow down to your contractor where possible. For example, are named sub-contractors to be used for works in connection with the BMS and/or fire?


The Building


If the building is under construction, or the landlord is carrying out works, it can be tempting to seek to start work before the landlord’s works are completed. Think about this carefully and seek advice. Multiple contractors working on site can lead to time and money claims from each, and what happens if the landlord’s works are delayed? Their rush to achieve practical completion is likely to impact your works, particularly as your agreement for lease or licence will commonly prioritise the landlord’s works. See below as to practical issues when carrying out works alongside other tenants in a multi-let building, many of which also apply in this scenario.


Who takes the risk of unforeseen problems in the building? The contractor is unlikely to want to take responsibility for the impact of defective work carried out by someone else. Consider requiring a visual survey (or more) and making the contractor responsible for matters it should have been aware of as a result.


The Works


Make sure the contract is clear as to what the contractor is to provide including quality, products and finishes, and that the specification has been signed off by the relevant parts of the business. Variations requested after the contractor is engaged are likely to be expensive, both in time and in money.


Responsibility


Many fit outs are procured on a design and build basis. The Employer may undertake some design itself, with the contractor completing this, or the contractor may design the works, either alone or with input from the Employer/ his team, and present them to the Employer for approval.


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