A building dilapidation report is an important document that records the potential risk or damage to property. Although dilapidation reports are sometimes used to record conditions at the end of a tenancy period, this article focuses on the reports that are carried out before and during construction. These audits assess the risk of dilapidation and the extent of any damage, should it occur.
As populations grow and greenfield sites receive greater protection, many construction projects are taking place in built-up areas. In addition, the demolition and re-build model is increasingly popular. In cities, developers are taking down many large high-rise buildings and replacing them with modern, safer and more efficient buildings. Although this style of construction is welcome news for residents and councils alike, it too has its risks.
A major priority when working on sites of this nature is ensuring that nearby properties are protected from damage – construction workers might have to work with neighbouring walls and connected foundations. Sites often need large amounts of material transferred and demolition usually requires heavy machinery. With deep excavation needed for high-rise buildings, damage can occur through erosion or vibration.
Damage leads to disputes and this can be costly to both the construction company and its clients. By completing a comprehensive dilapidation audit before work commences, the potential risks can be identified and quantified and plans can be put in place to change activities and reduce risk.
What is a building dilapidation report?
A dilapidation report records the condition of all neighbouring buildings that could potentially be damaged by demolition and construction processes, as well as surrounding elements, such as trees, fences, paving, driveways and yards. The audit needs to be as comprehensive as possible. The auditor then assigns risks and probabilities to each activity to determine the likelihood that it will occur and the costs that could be incurred. If an activity is deemed to be too risky or costly then an alternative method or activity can be chosen.
Above all, prevention is better than a cure. The report’s priority is to identify and limit damage.
How to calculate dilapidation costs?
By completing a building dilapidation report, you can limit risks but not completely avoid them. If damage does occur, dilapidation costs need to be calculated in order to offer compensation. The calculation needs to consider the cost to replace the item or repair the damage.
For example, to replace a broken railing:
- The cost of a similar replacement railing might be £5000
- The age of the railing might be 3 years
- The average lifespan of the railing might be 20 years
- The remaining realistic lifespan of the railing is therefore 17 years (20-3)
- The value of the railing per year is £500 ÷ 20 = £250/year
- The compensation amount is the remaining realistic lifespan x the value of the railing per year: 17 x £250 = £4250
Rather than replacing the item like-for-like, the owner can choose to use the money elsewhere and the calculation fairly considers the value already obtained from the item over its lifespan.
If the item is only damaged in part and the damaged section can be replaced, then the calculation can be reduced to take this into account.
For example, if your work damages two metres of a 50-metre railing, you would:
- Divide the total cost of the railing by the length for the cost per metre: £4250 ÷ 50 = £85
- Multiply the cost per metre by the number of metres that need replacing: £85 x 2 = £170
Creating building dilapidation reports
Dilapidation reports are complex documents usually completed by experienced building consultants or surveyors. By carrying out a comprehensive audit before work starts, the building contractor, client and neighbours can be clear about the existing condition of neighbouring buildings and assets.
Reports help to foster open communication with building owners and occupants and the potential impact on the property and their day-to-day lives. Being honest about the extent of the work will help alleviate some of the potential stresses that may occur. Being proactive in dealing with any compensation claims will help ensure a fair process of reimbursement that helps prevent escalation.
PlanRadar enables building consultants and surveyors to conduct a thorough building dilapidation assessment. They can document any pre-existing damage, subsidence or cracks using images, written notes and audio. You can even create custom forms and reports for sites or clients with special requirements. If a neighbour or worker reports damage, site workers can document (again through images and notes), record and track it through a ticketing system and assign to a supervisor to investigate. Using the pre-existing condition reports, the supervisor can check claim validity and provide evidence, if needed.
When should you complete a building dilapidation report?
The first report should take place before construction starts. It should report pre-existing faults and assess the impact and risk of the proposed demolition or construction activity.
Regular checks should be made as the project progresses and workers should be encouraged to report any issues, however small, as soon as they arise. By using PlanRadar to create tickets, workers can report an issue using their smartphone. The ticket can be assigned to a supervisor for inspection, and remedial work booked in. Each ticket forms part of an audit trail. Senior managers can identify issues quickly and a full report can be generated at the end of the project.
When the project is complete, a final audit records the condition of the neighbouring buildings and assets, documenting any repairs or remedial work and providing date stamped, visual evidence in case you need it later.
By creating detailed dilapidation reports at the beginning, end and throughout a project, contractors and clients can reduce their risk and provide the detailed information needed to respond to claims, should they arise.
Discover how PlanRadar makes building dilapidation reports simple and easy with a free 30-day trial.