Managing fit-out and alterations is a central part of responsible property management. Legal obligations relate to various energy standards, and a range of cost-saving and reputation benefits are possible by considering sustainability at difference stages of the fit-out and alterations process.
Managing fit-out and alterations involves understanding the way in which sustainability can be incorporated into the design and renewal of properties, and ensuring that sustainability is appropriately reflected in key processes for alterations, dilapidations and reinstatement.
Assets undergo refurbishment over the property lifecycle. Ensuring this is undertaken in sustainable way provides an opportunity to mitigate property risks and enhance property value, alongside controlling operational costs and improving the experience of building users.
Incorporating sustainability within fit-out involves understanding the purpose of the fit-out and the occupiers’ needs. It is important that these requirements are included within the fit-out design specification and that the Asset Register is updated following fit-out works.
Fit-out and alterations provide an opportunity to contribute towards a range of energy performance compliance obligations and voluntary objectives.
For example, the required Energy Performance Certificate requirements within the Minimum Energy Efficiency Standards in England and Wales (and similar Climate Change Scotland Act requirements in Scotland).
The license for alterations process involves the asset manager consenting to the request from an occupier to undertake alterations to a property. It is important for the sustainability impact of these alterations to be understood, in particular for key elements such as energy efficiency.
The design stage for proposed alterations may involve the review of potential Energy Performance Certificate rating impacts by suitably qualified building surveyor and energy assessor. Alongside this, the asset manager may encourage enhanced sustainability performance through sustainable design standard or a green lease.
A Schedule of Dilapidation is generally prepared by a Chartered Building Surveyor and identifies relevant breaches to tenancy obligations and proposed remedial works. They are typically prepared towards the end of a lease term and can result in the tenant undertaking an agreed scope of repair and reinstatement works.
With an increasing focus on energy efficiency and Energy Performance Certificate ratings, the dilapidation process needs to take account of the impact of any repair and reinstatement works. Whilst Energy Performance Certificate obligations fall to the asset manager, it is important to consider potential diminution valuations resulting from the reinstatement process.