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News from the Residential Property Investor, the bi-monthly magazine for RLA members

other articles from the September / October 2005 issue

BUILDING REGULATION - September / October 2005

One of the worst headaches for landlords is finding good tradesmen. Unfortunately, bureaucracy may make it even harder. As for DIY, it may not be an option

Building is Britain’s biggest industry, with two million people working in it. However, there have been repeated warnings of a skills shortage which has so far had at least one unexpected effect: when it emerged that plumbers were in such short supply that they could earn £90,000, there was an immediate rush of white collar workers to quit their posh jobs and retrain.

Whether that will happen in other trades remains to be seen, but it seems unlikely. The truth is that few school leavers today aspire to work in the building industry, and it is predicted that by 2007 there will be a shortage of 350,000 construction workers. This is bad news for all property owners who rely on skilled tradesmen for maintenance and emergency repairs.

Mounting bureaucracy is not helping. For example, the Government’s new e-procurement policy requires suppliers to local authorities to be able to trade online - something which does not come naturally to some horny-handed builders who are used to writing their quotes on the back of a fag packet.

But the real challenge is that some trades now cannot operate without undergoing an assessment to prove they are ‘competent’.

Arguably, building trades need regulating to stamp out shoddy workmanship and rip-off merchants, but such competency schemes are a problem for landlords who either use a trusted but untrained handyman or do much of their own maintenance work themselves, such as installing replacement glazing and electrical work. And there is a strong possibility that competence schemes will be introduced for other building trades, and possibly all.

Derek Vaughan, managing director of the UK Trades Confederation, is more aware than most people of the arguments for and against.

He suggests: "Perhaps regulating each trade will raise its profile in career terms and this in turn may solve the shortage of construction workers. If these trades are seen as skilled professions, it would change the perceptions of school leavers."

Of four trades - electricians, window installers, painters and decorators, and roofers - the first two are subject to a Government-approved competence scheme and the second two aren’t. Most electricians have done a four-year apprenticeship scheme and some have NVQs. Since the beginning of 2005, all domestic electricians are required to be Part P registered by an approved assessment body like ELECSA.

To become Part P registered, domestic electricians must show that they are competent to self-certify their work, eliminating the need for approval from the local authority building control department.

It means that landlords who once did their own electrical work must now get virtually everything done by an approved electrician.

Similarly, since April 2002 all replacement glazing in dwellings has to comply with Part L of Building Regulations and be certificated by either the local authority building control or a FENSA (Fenestration Self Assessment Scheme) registered installer. The scheme, set up by the Glass and Glazing Federation, allows installation companies that meet certain criteria to self-certify their work after going through a competence scheme.

The Building Regulation Part L also includes roofs in its mission to save energy and reduce CO2 emissions from new houses, but there is no competence scheme yet. However, there soon could be as it is under review by the Office of the Deputy Prime Minister.

Ray Horwood, chief executive of the National Federation of Roofing Contractors, is in favour of improved standards but wonders whether such a scheme is really justified, and points out that it would bring extra costs to the contractor. These could well include higher liability insurance, extra administration and the actual cost of applying for the competence scheme.

If such a scheme were to be introduced, it would undoubtedly stop most landlords from being able to clamber on their roof to fix a tile.

One industry where there is no competence scheme planned is painting and decorating. However, before landlords heave a sigh of relief and open the next tin of magnolia, certain members of the trade would like to see a scheme in place.

David Powis, chief executive of the Painting and Decorating Association, says that having a competence scheme would definitely be beneficial in stamping out the rogue painters and decorators. How long before the Government introduces a competence scheme for the changing of batteries?

CHOOSING TRADESMEN

Word of mouth and personal recommendation is always best

Never pay up-front for labour, but only for work that has been done to your satisfaction. Controlling building work in this way is far more efficient than the use of contracts
Pay promptly
For major work, eg total renovation or rebuilding, agree a retention, say ten per cent retained for three months, so that the builder is motivated to come back and put anything right
Make sure that gas work is done by a registered CORGI installer, and that electricians and window installers are approved
Make sure that you obtain and keep a certificate that the work done is to Building Regulations standard
Trade organisations vary enormously in how they police their members. If a builder says he belongs to an association, check that he actually is a member
Be very wary of any tradesman who is instantly available: any good operator in the building industry is likely to be busy and booked up

SNAGGING: BUYER BEWARE

If you are investing in a new home, then go about it the right way, advises Vanessa Ambler, a director of the snagging firm Inspector Home:

Before you exchange contracts, think about snagging defects in your new home and the possible consequences for your investment. What if you could not let or sell the property for a few months - how would this impact on your cash flow?
Always use your own independent solicitor and not one recommended to you by a developer who may not have your best interests at heart.
Be aware that you do not legally own the property until completion. This means that if a developer wants to refuse you entry to carry out snagging, they are legally entitled to do so (although they rarely refuse us entry). See if you can get permission written in to your contract.
Holding back a retention until all snagging defects are complete is a great incentive for your developer to finish your home to standard, so try to get this built in to your contract too.
Never buy a new home without a warranty and be aware that an Architect’s Certificate is NOT a warranty and in many cases not worth the paper it is written on. Never complete on a new home with an Architect’s Certificate unless you have checked the property thoroughly and defects have been rectified.
Make sure you carry out a thorough snagging inspection of the property before you complete. You could do this yourself or you can get a professional company to do this for you. Make sure you find out the qualifications and experience of the company snagging your home and what customer service and support they can provide for you: not all snagging companies are equal.
Inspector Home always try to meet the site manager at the time of inspection to ensure all defects are corrected prior to completion. If this is not possible, ensure that you obtain written confirmation and a schedule of remedial works prior to handing over your money.
Once you have completed, visit the property and re-check for cosmetic defects and leaks. If building work has been carried out in your home, some additional damage may have occurred and leaks can unfortunately happen at any time.
During the first two years of your warranty, your developer is liable for defects that occur, but be aware that wear and tear on the property can be difficult to distinguish. Report defects in writing as soon as they arise to protect your position.
Ninety per cent of new homes do have defects, but rest assured that once you have identified them they can be corrected and your investment will be finished to standard and ready to provide you with a good return.

CASE STUDY

When property investor Simon Stern bought a two-bed apartment in Glasgow, built by a major UK developer, he completed on the purchase in March this year. He was one of a group of investors who had instructed Inspector Home to check a number of units on the development.

Inspector Home, who inspected the property a week later, unsuccessfully tried to get access at first because the ceilings had collapsed due to a leak. Not only was the flat uninhabitable but the lift servicing the whole block had no telephone line connected to the alarm, which is a serious breach of health and safety.

No fewer than 52 major defects were found, affecting the letting potential of the property, which had not been inspected by the NHBC before completion. This inspection finally took place in early April.

With ten years’ worth of experience, Inspector Home was able to help Simon with his compensation claim. The defects were corrected quickly, and in June he received £1,300 in compensation.

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