A Project Managers Guide To Development Strategy

© The College of Estate Management 2002
Paper 0143V3-0
A project manager’s guide to development

strategy
Contents
INTRODUCTION
1. Foreword
2. Introduction
APPOINTMENTS
3. The project management appointment
4. Consultant appointments
5. Architect
6. Quantity surveyor
7. Structural engineer
8. Mechanical and electrical services consultants
AGREEMENTS
9. Development partnerships – contracts
10. Development/building agreements
11. Joint venture agreements
12. Finance agreements
PROCEDURES
13. Design and specification
14. Construction (Design and Management) Regulations 1994 (CDM)
15. Statutory approvals
16. Statutory powers and agreements
17. Rights over land – easements
18. Insurance
19. Specialist subcontractors
(Continued)
A project manager’s guide to development strategy Paper 0143 Page 2
20. The building contract
21. Tenants – leasing and occupation
22. Commissioning and management transfer
23. Monitoring and administration
READING LIST
APPENDICES
A. Drafts of consultant appointments
B. Developer/tenant outline specification; Tenants’ handbook – contents;

Letting memorandum; Shopfitting pro forma
C. Project record; Quarterly financial appraisal; Cash flow; Nominated

specialist status report
D. Health and Safety: Construction (Design and Management) Regulations

1994 – Project record addendum; Competency and resource enquiries
Introduction
Contents
1. Foreword
2. Introduction
1 Foreword
On reaching the first floor landing of the grand staircase in the RICS headquarters in
Great George Street, there have been times – although I admit not many – when,
instead of my steps tracing a path in the direction of the bar, I have turned sharp
right towards the double doors which announce entry to the library. Inside, two short
turns to the left have brought me to a short length of shelving which bears the legend
‘Project Management’. I cannot remember how long ago it was that my eyes first ran
over the titles, but both then and subsequently I have been struck by the
overwhelming bias towards description of organisation systems and network
analyses – mostly related to construction activities. Helpful as these works may be,
the project manager of a commercial development has far wider horizons to
encompass.
Since 1970 my career has been solely concerned with project management, and in
recent years, as director of a major development company, I have fortunately been
provided with the opportunity to translate experience into policy. This spawned the
idea of a Guide which would act as a reference work for our in-house project
management team. However, the reality lay dormant until the announcement by the
RICS in 1982 of a Project Management Diploma Course. The Guide was first
researched and created in response to the course requirement for a second year
project, and in 1985 I was pleased to be prompted by CASLE (Commonwealth
Association for Surveying and Land Economy) to revise and extend this work. The
information is necessarily based on features and practice within the UK development
industry, but I believe much of this to be of broad application. I trust the reader will
therefore find benefit even in those chapters which are closely tied to legal doctrine.
For the purpose of narrative style I have assumed that the project manager is
representing the developer, whether as an in-house employee or as an agent, and the
attitudes and observations flow accordingly. I also refer to the employing party,
whether it be corporate or an individual, as the client or developer; the reader should
treat these identities as synonymous.
The term ‘Guide’ is deliberately chosen. There is no single definitive approach to

project management and consequently my intention has been to provide a
commentary on the major facets affecting commercial development. Nor should it be
regarded as exhaustive. The scope of project management is ever changing, whether
through market fashion or the influence of statute, and there is no shortage of
personal impressions that have been aired as to its content and style. The Guide
inevitably reflects my interpretation, but fundamentally it is a statement of factual
and practical matters encountered in everyday project management.
2 Introduction
In September 1989 the Royal Institution of Chartered Surveyors published the first
professionally ‘authorised’ Project Management Agreement and Conditions of
Engagement. This was an ambition realised for the RICS ’s Project Management
(Diploma) Association, which from its inception in 1985 had seen the creation of a
standard form, comparable to those published by the RIBA and ACE for architects
and engineers, as an essential requirement of the property development industry.
Henceforth it would provide a basis of common understanding between clients and
project managers of the role and services to be performed.
However, such a document – a contract – has necessarily to be objective. It cannot

easily address the more subtle influences which affect the relationship of client and
project management. For example, by what yardstick is the project manager to be
judged? Does the project manager who directs the design and construction of low
quality speculative offices, which let immediately on completion, perform better
than one who gives care and attention to long term maintenance and service charge
costs for a building that does not attract a tenant for two years? Which is more
desirable: a shopping centre where a drive on programme saves two months and
considerable interest charges but has only a few tenants ready for trading, or one
which completes on time with virtually all tenants shop-fitted and ready to receive
the public? The difference in marketing impact is considerable.
These examples may be simplistic but they nonetheless serve to highlight the need to
determine the project manager’s role. I suggest this can be looked at as one of three
possibilities:
l administration and co-ordination;

l achievement of targets, eg construction cost, completion date, or quality of
specialist accommodation such as computer suite;
l overall success – from site acquisition to final letting and occupancy;
and allied to these considerations is the extent of the project manager’s brief. It may
embrace the entire development process or be limited to only part, such as design
and construction.
The understanding between client and project manager is therefore of vital

significance. This will be influenced in part by the client’s own expertise, but it must
be anticipated that in some instances the project manager may have to prepare and
condition his client. He must understand the client’s corporate and executive
hierarchy, his decision processes and reporting requirements. There has also to be an
appreciation of the client’s role: how did he gain his position, what are his
expectations, and particularly what is his relationship to other principals and how did
this arise? The last point is fundamental to any contact the project manager may
have with third parties when representing the client.
Following from this, the project manager must distinguish the rights, responsibilities
and obligations created by contracts. Development projects attract a plethora of
parties, ground landlords, funding institutions, consultants, contractors and
subcontractors, and statutory authorities – to name just the obvious. The project
manager is a pivotal character in fulfilling his client’s obligations, covenant by
covenant. He must recognise where action under one contract may have
consequences for another (eg extension of time under the building agreement), and
also distinguish between similar obligations under differing contracts (eg certificate
of practical completion under a building contract, and certificate of practical
completion pursuant to a funding agreement).
Whilst careful selection of a development team is important to the successful

undertaking of a project, much more can be gained by creation of a positive and
responsible working atmosphere. I appreciate that personalities influence
relationships, but I am firmly of the opinion that the project manager should show
respect for expertise, and recognise too that time, money and supporting information
are resources required in varying measure by the team if they are to perform and
respond effectively. Whilst the role of paymaster and client carries with it a degree
of privilege, it is all too easy amidst the daily pressures and demands for service to
lose sight of the assistance and consideration that can be shown to the team which
will in turn create goodwill and encouragement. I am not suggesting largesse, but
responsibility is a two-way process.
Even small gestures can go a long way. For example survey information –
dimensions, levels, ground conditions, etc – which usually cost comparatively little,
can be obtained at the preliminary design stage. Not only does this facilitate the
design consultants to be accurate in their schematic drawings, but it also introduces
greater reliability into the engineer’s foundation assumptions and the quantity
surveyor’s budget estimates.
‘Risk’ is an abstract characteristic, difficult to define but ever present in

development projects. In directing and administering a team whose activities may
run from site acquisition to occupancy, the project manager has a crucial task in
controlling pace and direction. This is perhaps at its most obvious in the early
speculative stages when appraisals and potential commitments demand a supply of
information which can only sensibly be provided by the consultants. The project
manager performs a key service in directing the team’s effort to assist the removal of
uncertainty and aid negotiations, whilst preventing unnecessary or premature work
and limiting potentially abortive expenditure. Having passed beyond the speculative
stage, the areas of risk exposure may well increase due to contractual commitments
that have been taken.
It is as important for the project manager to disseminate information as it is for

consultants to produce drawings and Bills of Quantity. A typical example, which I
quote in the Guide, is that the project manager should convey to the consultants
those clauses in every draft contract between the client and a third party, eg Fund,
which affect design and construction of the project. Their comments should be
sought, and those of the contractor if he is on board, and the final covenants
confirmed again to the team once contracts are exchanged.
Design information is fundamental to effective preparation and planning for

construction, yet frequently there is a crusade to achieve the earliest possible start
date with insufficient regard to the quantity or quality of information that will be
available for contractors to tender against, or at the time works start on site. Still,
competitive tenders will be sought and due horror expressed when the contractor
claims for late information or details showing unimagined expression of the outline
concept. Whilst many clients and consultants are alert to this ‘industry trait’ the
project manager can still provide significant service to his client by analysing project
timescale and ensuring that this is sensibly reflected in the consultant’s requirements
for design production, the form of building contract adopted and financial budget
allowances.
The project manager should continually pay regard to the expertise professed by his
development team and for which he has agreed to pay. He is entitled to expect and if
necessary demand service. To do so, however, he must remain aware of the
functions ascribed under relevant contracts or conditions of engagement – which can
be quite detailed. He must also understand the interaction required between the
respective design consultants, and in turn with the cost estimating and control
process. The project manager should be explicit as to the service he requires;
appointments worded in generalised terms invariably lead to disputes and requests
for additional fees. The format outlined in the chapter on consultants’ appointments
has been successfully practised by my company for a number of years.
The role of the project manager will inevitably involve him in discussion, review
and instruction of matters impinging on the respective consultants’ specialist
expertise. This is particularly apparent in the chapter on Design and Specification in
which I mention various aspects requiring the project manager’s attention, but which
clearly overlap the consultant’s functions. This cannot be avoided; the project
manager should simply take care not to relieve or transgress the consultant’s
responsibilities.
The project manager’s usual relationship to a building contract is that of an

estranged party. The employer (client/developer) and contractor will be signatories
and the consultants names will at the very least be recorded. All will commit to
obligations. However, not so the project manager. His role has yet to be formally
recognised and he is therefore in a nebulous position. In practice the project
manager’s role is understood, but it is important to appreciate the underlying
reservation placed on any instructions he may issue; or the manner in which he deals
with contract advice from the consultants for the benefit of the client, particularly in
respect to claims!
Lastly in this series of role-playing features, I would mention the project manager’s
duty generally to safeguard his client’s interest. This can take many forms, but by
way of instance, he should monitor local press coverage and make regular
inspections beyond site boundaries to ensure no unreasonable overspill effect on
adjoining owners and the public at large. Well maintained hoardings, safety lighting
and courtesy notices present an image which reflects on the client and the entire
development team.
A development project runs through many phases, a number of which will overlap
according to circumstance, but for which there is nonetheless a reasonably
determined sequence. The chapters of this Guide are therefore arranged in the
approximate order of events. It may be that, for any given project, the project
manager will be appointed to control only certain activities, in which event some
interpolation will be needed. However, even in these instances I suspect a review of
other topics will enable the project manager to assist his client beyond his immediate
brief. The Guide does not contain a specific chapter dealing with the client’s brief, as
the criteria to be established are substantially reflected under the various headings.
Finally, but I am sure not least in the mind of the consultant project manager, is the
matter of his remuneration. The Project Management Agreement and Conditions of
Engagement deliberately leave open the assessment of fees. Consequently the
project manager must conduct his own assessment and negotiation with the client. In
doing so I suggest full account is taken of my earlier remarks about the alternative
degrees of project management responsibility; if this entails achievement of targets
or some measure of project success, then the role contains a degree of
entrepreneurial risk – it is not simply consultancy. In such situations the project
manager must consider whether this merits additional reward. Presumably the
contrary position must be that if the project manager does not achieve his target, he
is potentially liable!
I hope that the reader does not have the misfortune ever to become so distrained
from a client, and that in some measure this Guide will signpost the way to fruitful
and satisfactory service.
Appointments
Contents
3. The project management appointment
3.1 Structure
3.2 The project
3.3 The services
3.4 Obligations and standards
3.5 Reporting to and obtaining instructions from the client
4. Consultant appointments
4.1 Appointment terms – general criteria
5. Architect
5.1 Appointment terms (Appendix A1)
5.2 Memorandum of Agreement
6. Quantity surveyor
7. Structural engineer
8. Mechanical and electrical services consultants

8.3 M & E subcontractor appointment
3 The project management appointment

In the Introduction to this Guide I referred to the client’s and project manager’s
expectations of a project management appointment. It is now time to consider the
contractual expression of these and other matters. For a backdrop, I shall refer to the
RICS Project Management Agreement and Conditions of Engagement (the RICS
Agreement), being a style deliberately drafted for universal application. The RICS
Agreement is accompanied by a Guidance Note which provides advice on the
individual clauses. (The Guidance Note, Memorandum of Agreement between Client
and Project Manager, and Conditions of Engagement for a Professional Project
Manager, can be found in the Code of Practice for Project Management for
Construction and Development.) My purpose in this section is to offer thoughts on
the underlying consideration to this or any other appointment contract.
Title Institution Agreement
Project Royal Institution of Memorandum of Agreement between Client and

Manager Chartered Surveyors Project Manager and Conditions of Engagement for a
Professional Project Manager.
NB: For non-native English speakers the words ‘appointment’ and ‘engagement’
may be considered interchangeable in this section.
3.1 Structure
There are three primary components to an appointment contract:
1. The project specifics, eg the parties, scope of development, duration of

appointment, fee etc.
2. The services to be performed.
3. The obligations and standards by which the contract is to be implemented and
judged.
Whilst there is some inevitable intermingling of these in all contract drafting, I

recommend the project manager always to keep these distinctly in mind when
reviewing or drafting terms. It is a helpful discipline when assessing the balance,
relevance and risk of the contract. The RICS Agreement comprises two parts: the
Memorandum contains the project specifics, and the project management services by
reference to an appendix; the Conditions of Engagement describe the obligations and
standards (although some also appear in the Memorandum).
3.2 The project
The parties
It should first be appreciated (as defined under ‘General Conditions’ in the
Conditions of Engagement), that the ‘Project Manager ’ is the person or company
named in the Memorandum of Agreement. In other words the ‘Project Manager ’ is
often a company with a principal person specifically identified to undertake the
project manager’s duties and obligations (ref: item 11 in the Memorandum of
Agreement between client and project manager).
Make clear to your client the form in which you are contracting – as an individual,
partnership, primary or subsidiary company? Is a guarantee for your performance on
offer (or perhaps only if requested)?
Equally, be certain of the client entity with whom you are contracting. A corporate
search never goes amiss, and does not have to be disclosed.
Scope of development
The project manager is often first engaged at a time before the scope is sufficiently
certain for accurate contract description. By the same token, it is too soon to confirm
absolutely your contract commitment and services. Temporarily, a provisional
agreement is better.
For the client as well as project manager, it would benefit the ultimate relationship if
the scope is wholly or substantially defined and confirmed in the agreement. A later
disagreement about what was intended, even though the misunderstanding may be
genuine, will prejudice trust.
Duration
Whilst the start of an appointment usually presents no difficulty, careful thought and
anticipation needs to be given to its completion. Project management services
frequently go beyond events associated with the building contract, eg final
certificate. Client and project manager should agree how the ‘end’ is to be decided.
Is it to be a fixed date come what may, a particular event, or completion of the last
service (not necessarily an obvious point in time)?
Whatever the decision, the duration is important. First for contract certainty, second
for agreeing the fee payment schedule, and third for setting the starting point for
statutory post-contract liability. One consideration in relation to this last is a possible
distortion of dates between that applying under the project manager ’s appointment
and those derived from the consultants’ and contractor’s agreements.
Keep in mind too that the project duration may vary from the original expectation. A
mechanism for adjustment is usually prudent.
Fee
In the United Kingdom there is no Institutional guidance provided for the assessment
of a project management fee. Whilst a market ‘opinion’ based on percentages has
developed for commercial work, this is unsophisticated. I have not heard of anyone
who could demonstrate facts and figures from a number of sources. Consequently
even if expressed as a percentage of cost, the root calculation of a fee is in the
estimate of the resources, time and effort which the project manager will devote. To
this must be allied the responsibility, authority (and liability?) which the project
manager is to take. I commented on this in the Introduction. Particularly in fee
bidding, it is so easy to be optimistic and assume all will go smoothly. Be prudent.
Productive relationships and jobs well done are usually only achieved through
considerable effort – those that turn sour are even harder.
Fees in the UK are usually expressed as a percentage of the building cost. By

implication, this conveys the impression that project management is solely
concerned with design and construction. This is often far from the truth, as I hope
this Guide and the course in general will confirm. Perhaps the worth of your project
management service will be better understood if the fee is calculated and expressed
according to the services to be performed, eg as a measure of development cost.
3.3 The services

The Guidance Note issued with the RICS Agreement offers a comprehensive
summary of services and reflects the broad spectrum that is project management. It
is not, however; nor is it designed to be a mandatory schedule applicable to every
development. The project management organisation owes it to itself and to the client
to scrutinise the schedule, and to add or omit as appropriate for the work anticipated.
For a UK development which qualifies under the CDM Regulations (which will be
most), it may be appropriate to add reference to the project manager’s
responsibilities in relation to health and safety, possibly even including a role as the
client’s agent and/or planning supervisor, if either should be the case.
When considering the services, think also of the external agencies with which you
will relate, eg funding partner, tax adviser, insurance broker etc. Ensure their
identities are known, and, perhaps more importantly, that they each understand and
recognise your role as project manager.
3.4 Obligations and standards

Authority
Fundamental! In the context of UK law (but a principle I am sure of equal
importance elsewhere), in what legal capacity is the project manager acting –
servant, independent contractor, or agent?
l Servant. An employee subject to client control, eg in-house project manager.
l Independent contractor. Engaged through a contract to complete a specified

task, and enjoys considerable autonomy except as qualified in the contract.
l Agent. Contains elements of both servant and independent contractor.

Assumes professional competence and an ability to judge when to
instruct with the client’s implied agreement, or when first to refer to the client
for decision. The approach to certain situations may be prescribed in the
appointment.
In the UK, the most common relationship is that of agent, as indeed for the RICS
Agreement. It is also comparable to that of the consultants.
It is desirable that the project manager ’s authority and relationship to the consultants
be clarified in the appointment. The RICS Agreement deals with this in two respects.
First it states that the client will directly appoint the consultants but that the project
manager will be responsible for management of them and that they shall provide the
project manager with information required for the performance of his duties, without
charge to the project manager. Second, the RICS Agreement states that the client
will formally notify the consultants of the authority given to the project manager to
act on his behalf, and also identify any specific items upon which the client’s written
consent is to be obtained.
Decisions
Development requires daily decisions, usually modest but sometimes significant.
Few clients expect every item to be reported to them first, but as it is impossible to
anticipate all circumstances, some guidelines are an important safeguard for both
client and project manager. Hence in the RICS Agreement a requirement not to issue
any instruction which would materially vary the project, or increase cost or time to
complete, without the prior consent of the client.
Too many controls will inhibit the development process; two few and there is a
breeding ground for misunderstandings and mistrust. The happy medium is fostered
as much by demonstrable responsibility by the project manager, eg frequent and
informal contact with the client to discuss current issues, as by specific controls or
periodic formal reports.
Directing the team

To be effective the project manager’s function should include:
1. Organisation of the team.

2. Instructing the client’s brief to the team.
3. Determining strategy.
4. Deciding priorities.
5. Taking decisions and instructing the team.
6. Negotiating and administering consultant appointments, and approving fee
payments.
The client will participate to some degree in most of these. So far as it is practicable
to do so, describe in the appointment the extent of the project manager’s function.
3.5 Reporting to and obtaining instructions from the client

Formal reporting is a healthy discipline, and the style and frequency might
reasonably be expected to be confirmed in the appointment. It is, however, desirable
to retain the flexibility to adjust and develop the reporting format as the development
progresses so that issues of the time can be given due focus and weight, rather than
be shoehorned into a predetermined structure.
A distinction is required between reports for routine decisions (which might be

consigned to a pro-forma arrangement for example) and those for major topics such
as a planning negotiation or construction tender. There might also be periodic
overview reports. The arrangement will vary for each appointment, but the project
manager should approach the matter positively; for instance consider the issues to
which the client is known to attach particular importance. Similarly the nature of the
client’s organisation and its internal reporting and decision structure.
The corollary to this is the client’s mechanism for instructing the project manager
(and the project team). It will be beneficial if a pre-determined style or format can be
adopted. This removes the potential for misunderstanding. A project team frequently
comprises numerous organisations and individuals, including within the client’s
organisation; it is vital to prevent confusion of requirement or approval. The project
manager is the guardian of the client’s brief. The decisions which flow from it and
this responsibility should be impressed firmly, positively and continuously.
Furthermore, it should be clearly set out in the project manager ’s Conditions of
Engagement.
4 Consultant appointments
The role of the traditional design and cost control consultants is supported by four
separate Conditions of Engagement, produced by three different professional
institutions.
Royal Institute of Standard form of Agreement for

Architects British Architects the Appointment of an Architect
(RIBA) (SFA)
Conditions of Engagement –
Structural Engineers Agreement 3
Association of
Consulting Engineers
Mechanical and (ACE) Conditions of Engagement –
Electrical Services
Agreement 4A
Consultants
Royal Institution of Professional Charges – Scales 36

Quantity Surveyors
Chartered Surveyors and 37
Each of the Conditions is written in a style dissimilar to any other, even as between
Agreements 3 and 4A, and the only ‘harmonisation’, to quote Agreement 3, is an
attempt by the ACE in their recent editions to link the Services description of the
Engineering disciplines to the work stages described in RIBA’s SFA. (The Table
provides a reconciliation of the Consultants’ services, using the Work Stages of SFA
as a base reference.)
Individually and collectively the Conditions have important shortcomings.
1. Because each of the Conditions is presented in different style, each requires a

‘fresh’ attitude when read, to understand and interpret the client/consultant
relationship and responsibilities.
2. The Conditions contain only limited reference to each other, and to the co-
ordination of activities and working interface that must occur within the
consultant team.
3. There are features of typical development consultancy not mentioned.
4. A number of responsibilities are qualified or excluded.
5. The Conditions contain services both within and without the normal
appointment, for which additional fees may be charged.
Nevertheless, each of the Conditions is the recognised conventional basis for

appointing the respective consultants in the UK development industry. Consequently
both clients and project managers should appreciate the ‘confidence factor’ accorded
by development partners, particularly funding institutions and statutory authorities,
to appointments made using the standard forms.
Example of professional charges (but not always used)
QUANTITY STRUCTURAL MECHANICAL AND ELECTRICAL

ARCHITECT
SURVEYOR ENGINEER ENGINEER
RICS Scale of
RIBA SFA 99 ACE Agreement 3 ACE Agreement 4 A
Charges
Fees Fees Fees Fees Fees Fees
Full Duties Abridged Performance
Scale 36 Work Stage
Pre-design Duties Duties
Preliminary Services
A/ Inception
B and Stage: 1 Time 1 Time 1 Time
Feasibility Time
Pre-contract Stage: 2 Time 2 Time 2 Time
Basic Services Design

Budget Outline Outline
C 10% 15% 3 7% 3 10% 3 15%
estimating proposals proposals
(extensive)
Preparation of Scheme
D 25% Scheme design 35% 4 17% 4 25% 4 60%
tender design
documents
E Detail design 45% Detail design and 5 40% 5 40% 5 66%
tender (restricted (very limited
documentation 60% service) service)
Examination of
Production Production
tenders F 85% 6 80% 6 70% 6 70%
information information
received
and Bills of (restricted (very limited
G
Quantities 65% service) service)
Construction
Tender
50% H 7 7 7
Action
(very limited (very limited
service) service)
Project
Post -contract J
Planning
Measurement Construction stage 8 8 8
Operations on (restricted
Costing variations K
site service)
Preparing interim
valuation and final L Completion 98% Works complete 100% 100% 100% 100%
account
100% Final Account 100%
To study and negotiate in detail on the Institution’s Conditions before each

appointment is, I believe, impractical. At best it is likely to lead to long and tortuous
discussion about interpretation of meanings and extent of responsibilities. Whilst the
importance of these is not to be under -rated, the project manager should, in my view,
accept the services for what they are – the recognised Institutional standard – and
use his time to better effect in devising conditions which provide a comprehensive
set of appointments.
In the following sections of this chapter I describe how this may be achieved, using a
common proforma basis, and then incorporating the requirements and features of the
project and the particular consultant’s role. Appendix A, ‘Consultant Appointments’,
contains the resultant standard drafts. The ultimate aim: a total service, for a single
fee.
I should stress here that the Conditions set out in the drafts are my own choice; the
reader may consider some should be omitted and others added. There is no single
option. For what it is worth, however, I can add that the style shown in Appendix A
has been used by me without exception since 1980. Whilst there have been
amendments to the standard draft since that time, and on every occasion it has been
purposely refined to suit the particular development, the essence has remained the
same. It has been remarkably successful in bringing certainty to the client/consultant
relationship.
Addressing appointment terms early in the life of a development does, in my

experience, promote a better and realistic understanding between the client/project
manager and consultants. Thus I strongly recommend the project manager to issue a
draft of the appointment as soon as possible, even though it may not be appropriate
to define or sign against final terms until some time later, when the character of the
development has unfolded sufficiently for all parties to settle with reasonable
confidence. Prior to signature the draft appointment provides a substantial indicator
of the client/project manager and consultant relationship.
Other than the lead design and cost consultants, the project manager must consider
that further consultants or advisors should be recruited to the team. Some may have a
design bias, such as landscape architects, acoustic consultants or traffic engineers, in
which event the project manager must determine between the direct appointment by
the client or a sub-appointment by main consultants; also whether the main
consultant embraces full design responsibility or only direction and administration of
any sub-appointment, and whether the main consultant’s fee is deemed to include
payment to the sub-appointee or is separately defined.
Invariably, a development team will include an array of professional advisors whose

roles are essential to the development process and who may have a strong influence
on the direction and performance of the design and cost consultants. Surveyors, real
estate agents and lawyers are the obvious examples, but the list may easily extend to
include others such as accountants and market research analysts. Whether imposed
by the client or recruited by the project manager, the latter must be certain as to his
responsibility for instructing, directing or ensuring overall co-ordination. If he is to
settle terms of appointment, the project manager can often obtain guidance from
relevant institutional recommendations. The service required of these professionals
is usually more easily defined or described and thus a letter of appointment will
often suffice without need for recourse to a specially drafted agreement.
4.1 Appointment terms – general criteria

The following comments are of general application to the draft Appointments which
appear under Appendix A of this Guide and clause numbers relate accordingly.
1. Project
Although the development title appears at the head of each appointment, this
paragraph should give a brief resume of the work to which the appointment
relates. Example: The alteration and refurbishment of 63/67 Kensington High
Street, to provide retail shops, stores, offices and car park.
2. Client
State the name and address of the client. Be certain: developments are often
carried out by a subsidiary or specially constituted company. The client
named will be the party responsible for payment of fees.
3. Consultant
Some professional practices operate under more than one style. Check the
practice name (and address) acting as consultant and its corporate credentials!
4. Service
(1) Before drafting the specific services requirement for a given development, the
project manager should assess the role of each consultant and their inter-
relationship. The architect has traditionally been regarded as the leader of the
consultant team and part four of the RIBA’s Standard Form of Agreement
confirms this principle by stating ‘The Architect will have the authority to co-
ordinate and integrate into the overall design the services provided by any
consultant, however employed’. A decision on the extent of services to be
performed by the Mechanical and Electrical Services Consultant is
particularly important because of the three alternatives offered in ACE
Agreement 4A. (See Mechanical and Electrical Services Consultant, later in
this paper.) The design of the M & E systems is often substantially
undertaken by specialist subcontractors, and this can influence overall design
co-ordination and supervision responsibilities. The approach for each
development should be clarified when settling service terms.
A further refinement, which the project manager might consider appropriate

to the service description, is to specify the number and/or names of each
consultant’s personnel assigned to the development, and their role. My own
view is that this can be a double-edged sword as it may demand premature
judgement of personalities and can inhibit flexibility. Nonetheless, I do accept
that it is a means of determining adequate resourcing by consultants.
In commercial development it is essential the consultants function as part of a

team capable of servicing the sale and/or letting activities. Although generally
understood as a principle by consultants, the need for specifically produced
drawings and specifications suited to marketing campaigns and tenancy
agreements can be regarded by them as exceptional. There is no reference at
all in the Institution’s standard forms! Hence it is appropriate to include the
commitment in the appointment, even though the precise requirements are
unlikely to be known at the time of signing the appointment agreements. It is
also therefore included within the fee.
Only the RICS Professional Charges refers to ‘claims’, and then only in the
context of additional charges by quantity surveyors for investigating the
validity of contractors’ claims. Bearing in mind that the consultants are
inextricably linked to claims discussion (argument!) and assessment – indeed,
lack of design information is probably the most frequent contractor’s
complaint – there seems good reason to make plain that the consultant’s
service includes advice to the client and project manager, and representation
of the client’s interest.
(2) Development associates (funding institution, local authority, tenants)

frequently engage professional consultants to give independent advice on the
quality of design and administration of the building contract, including
sanction of architects’ certificates submitted to a fund for reimbursement.
Whilst it is important that there should be no interference in the
responsibilities of the client’s consultants in relation to the building contract,
it is also necessary that the consultants recognise and agree the liaison
required with those representing Development Associates.
Collateral warranties are an established feature of commercial development,

although the subject still gives rise to a considerable amount of vehement
discussion, mainly on account of stories that certain clients and/or their
lawyers are reported to insist on unreasonable conditions. No doubt there is
some foundation for this, but for the project manager endeavouring to strike a
fair balance, help is at hand. The British Property Federation, in association
with the RIBA, RICS and ACE, has produced two standard forms. The first is
as between a financier and consultant(s), and the second is for a purchaser or
tenant and consultant(s). (The RICS considers them equally appropriate for
project managers, adopting the adaptation for quantity surveyors noted in both
standard forms.)
(5) Tenant works/fittings out. Compiling a Tenants’ Handbook can be a

substantial and time-consuming exercise; this clause establishes the principle
of consultant co-operation and contribution, and/or the provision of other
information to tenants and their advisors/contractors to assist the preparation
of fitting-out proposals. Occasionally it is necessary to arrange the inclusion
of tenant works in the client’s building contract; where necessary the
consultants must provide separate valuations and certificates to enable the
client to obtain reimbursement from the tenant.
Consultants are not expected to carry responsibility for tenants’ fitting-out

contracts but it is reasonable to ask that they observe the works are properly
undertaken to comply with approved drawings and to safeguard the client’s
structure and services. The consultants should witness that connections to
landlord’s services are effective (eg sprinklers, fire and security alarms, no
blockage of drains by careless dumping of screed mix, etc).
(6) As-built record : drawings, operating and maintenance manuals, guarantees,

maintenance contracts. These are essential requirements to the management
of a building, and any future repair, alteration or extension. However, it is
often difficult to collect all the information because it is derived from a
number of sources, and in the case of specialist products such as lifts,
manufacturers can be jealous of releasing information. The aim is therefore to
put the consultants on notice that the information is required and that they are
responsible for preparing or securing it according to their discipline, and
within a time limit.
The project manager is well advised to monitor the consultants throughout the
development programme, to be sure the records are compiled, guarantees
documented etc.
5. Copyright
The wording in the draft appointment follows the style included in the BPF
Collateral Warranty. Copyright is retained by the consultant but licence is
given to the client for all reasonable needs.
6. Fee
The fees set down in the respective Conditions of Engagement are not
mandatory. Indeed the RIBA now only provides information on fee ranges
based on market research of actual fees from amongst its members. The
earlier table shows the cumulative fee due to each consultant according to the
Work Stage completed, as recommended by the respective Conditions of
Engagement.
It is common to all four consulting disciplines to calculate fees as a

percentage of the final account value. For the structural and services
engineers, however, Agreements 3 and 4A set down specific means of
calculating their fee against the value of the works with which they are
particularly associated. The calculations are complex, particularly those for
structural engineers, and seem to offer no definite advantage over the ‘gross
final account’ method. The latter is certainly easier for administration and
possibly removes any inclination on the part of the engineers to design
expensively, as they have limited influence on the total budget. The ‘overall
fee’ approach is accepted by most consulting engineers.
Fixed or lump sum fees have a definite attraction for the client and project
manager, because of the certainty they provide. I have also found consultants
willing to agree once they are reassured how this is to be achieved. For them
too it can be a safeguard; it is not unknown for final contract sums to be lower
than the pre-contract forecast or accepted tender. An approach I have found to
work well is to agree a percentage which, once a contract sum is defined, is
applied to that and converted into a fixed fee sum. This has the benefit that
the fee reflects the value of the work described in the building contract, which
is reassuring to the consultant, but removes any suspicion that there is
financial advantage to the consultant in designing or instructing changes
through the contract. When requested, I have agreed a proviso that the
consultant shall receive an additional fee if the client instructs a major change.
This is also discouragement to the client. As client changes can rarely be
anticipated – and may be omission or adaptation as much as addition – I do
not agree to any more specific wording then this statement of intent. In turn,
however, I regard it as the duty of the project manager to promote to the client
the case for additional fees if instruction falls within the spirit of ‘major
change’.
The fee should be recorded as being in payment of all services described in 4

above. If any exceptions are made, as for example in approving tenants’
shopfitting proposals, special presentations, or production of a maintenance
manual, these should be specifically noted and the basis of assessment or
agreed fee for these be recorded.
Expenses are usually treated on one of the following bases:
a. as within the aggregate fee, or

b. as a separate and additional percentage of the contract value, or
c. as based on actual costs incurred, evidenced by vouchers, etc.
For reasons of certainty and simplicity of administration, the project

manager’s preference might be in the same order.
7. Site personnel
The need for site personnel will vary according to the complexity of design
and construction, and also often according to the preference of the individual
consultant. Costs normally form an extra to fees and are customarily based on
wage and national insurance expenses plus an addition for administration
overheads. It is advisable therefore to establish early with each consultant the
likely need for site personnel, because cost allowances must be made in
development appraisals.
When budgeting for expenditure the project manager should take account of
possible wage or salary increases during the time that site personnel are
employed on a project.
8. Terms of payment
The project manager must distinguish between:
a. the pre-commitment period, ie prior to an unequivocal client

instruction to proceed and complete the project, and
b. the post-commitment period, when the full fee terms (Clauses 6 and 7)
will apply.
During the pre-commitment stage the consultant’s reward may be based on

either a lump sum for work up to any given stage of design or development
progress or, alternatively, at an agreed monthly rate, subject to an aggregate
limit. In either event, pre-commitment should be defined as including all
expenses and site personnel. All payments made will be on account of the full
fee in the event of the development proceeding. Beware of payments based on
time charges without a ceiling limit; they can result in unpleasant surprises!
Provision should always be made for a proportion of the consultant’s fee, say
5%, to be held until issue of the architect’s final certificate, ie completion of
defects.
9. Suspension or abandonment of project

This clause will usually distinguish between the pre- and post-commitment
periods.
For the pre-commitment period it is preferable to relate the consultant’s

entitlement to the terms of payment for this same period, but occasionally it is
appropriate to agree different figures.
Once the post -commitment stage is reached, it is conventional to provide that

payment to the consultant will have regard to the relevant Institutional
provisions, unless some other basis is agreed.
10. Professional indemnity insurance

This clause follows the similar provision contained in the BPF warranty. The
judgement for the project manager is the amount of indemnity. Better that he
proposes, than the alternative of asking the consultant ‘what’s available?’, but
keep a sense of proportion.
The period will be commensurate with whether the appointment is signed

under hand (6 years) or under seal (12 years).
11. Consultant team, project manager

If the project manager is appointed on the Agreement and Conditions of
Engagement published by the RICS, then it is probably sufficient only to
record the identity of the project manager, and that the consultants will supply
information to him without charge. The Conditions require that the client
shall formally notify the consultants of the authority given to the project
manager.
If, however, the project manager is appointed on some other basis, it is

desirable to have on record his role and responsibilities vis-à-vis the client and
consultants, in so far as they impinge on the consultants’ activities.
12. Signature
The draft appointments in Appendix A are presented in the format appropriate
for them to be signed as a Deed (in England and Wales), ie with twelve years’
continuing liability following completion of duties. The project manager
should consider whether this is appropriate to the type of development and
duties to be performed. The alternative is to sign ‘under hand’, which conveys
six years’ liability.
The following sections deal with matters related specifically to the respective
appointments of the four primary consultants. The clause numbers again
relate to those contained in the draft appointments set out in Appendix A.
5 Architect
4 Service
Schedule Two of the SFA lists the services to be provided by the Architect. It begins
with four headings – Design Skills, Consulting Services, Building/Sites, and All
Commissions – under which are listed services generally applicable to any
appointment. It is intended, however, that the client (project manager) and architect
should indicate those included or deleted, and write in any additions.
Then in similar style, the following 11 Work Stages. In summary these are:
l Work stage A: Inception and feasibility

Principally concerned with initial analysis of the client’s brief but including
appraisal identification of client’s requirements and possible constraints of
development. Preparation of studies to enable the client to decide whether to
proceed and to select probable procurement method.
l Work stage B: Strategic briefing

Preparation of Strategic Brief by, or on behalf of, the client, confirming key
requirements and constraints. Identification of procedures, the organisational
structure and range of consultants and others to be engaged on the project.
l Work stage C: Outline proposals

Prepare outline proposals and approximate construction cost for client
approval. Review of procurement route.
l Work stage D: Detailed proposals

Develop the design to agree spatial design arrangements, materials and
appearance, coupled with a cost estimate. Also give an indication of possible
building contract start and completion dates. Prepare application for full
planning development control approval.
l Work stage E: Final proposals

Develop detailed design; co-ordinate design work by other consultants,
specialist contractors, etc; obtain quotations; carry out cost checks; prepare
application for building regulations approval.
l Work stage F: Production information

F1: Preparation of production information in sufficient detail to enable a
tender or tenders to be obtained. Application for statutory approvals.
F2: Preparation of further production information required under the building
contract.
l Work stage G: Tender documentation

Preparation and collation of tender documentation in sufficient detail to
enable a tender or tenders to be obtained for the construction of the project.
(Solely concerned with the documentation required for tenders. Particularly
useful with D & B or management contracts.)
l Work stage H: Tender action

Identification and evaluation of potential contractors and/or specialists for the
construction of the project. Obtaining and appraising tenders and submission
of recommendations to the client.
l Work stage J: Mobilisation

Letting the building contract; appointing the contractor; issuing production
information to the contractor; arranging site handover to the contractor.
l Work stage K: Construction to practical completion

Administration of the building contract to and including practical completion.
Provision to the contractor of further information as and when reasonably
required.
l Work stage L: After practical completion

Administration of the building contract after practical completion. Making
final inspections and settling the final account. (Clearly separated from the
construction phase.)
6 Fee
The SFA guide contains information supplied by its members. This is reproduced on
the following pages. As will be seen there are two tables, one for New Works and
the other for Works to Existing Buildings, and each contains five classifications of
building type, details of which are given in Table 3.
Clause 6 should contain a statement of the percentage, lump sum or other fee
payable and that this is in respect of the entire service. Any specific exceptions
should be noted together with the fee basis.
In the case of multi-tenanted buildings involving considerable fitting out, it is

recognised practice that the architect receives a fee for reviewing tenant proposals;
this is usually paid by the tenant. A cost yardstick should be agreed (eg a flat rate per
unit) and stated.

SFA contains a draft Memorandum of Agreement for signature by architect and
client. This should be superfluous if the form set out in Appendix A1 is adopted.
TABLE 1 New works – Percentage fee bands for classes of buildings

(see Table 3)
Construction cost Class 1 Class 2 Class 3 Class 4 Class 5

bands* % % % % %
£50 000 to 75 000 7.20–7.45 7.75–8.60 – – –

£75 000 to £100 000 6.85–7.20 7.15–7.75 7.45–8.10 – –
£100 000 to £250 000 6.25–6.85 6.00–7.15 6.70–7.45 7.10–7.60 7.75–8.00

£250 000 to £500 000 5.90–6.25 5.60–6.00 6.25–6.70 6.75–7.10 7.50–7.75
£500 000 to £750 000 5.75–5.90 5.45–5.60 6.00–6.25 6.50–6.75 7.35–7.50
£750 000 to £1 million 5.65–5.75 5.35–5.45 5.90–6.00 6.35–6.50 7.20–7.35

£1 m to £2.5 million 5.50–5.65 5.05–5.35 5.70–5.90 5.95–6.35 6.85–7.20
£2.5 m to £5 million – – 5.50–5.70 5.70–5.95 6.30–6.85
£5 m to £7.5 million – – 5.35–5.50 5.65–5.70 6.20–6.30
£7.5 m to £10 million – – 5.25–5.35 5.60–5.65 5.90–6.20

£10 m to £50 million – – 5.00–5.25 5.25–5.60 5.30–5.90
*Where no figures are given, insufficient data was available
TABLE 2 Works to existing buildings – Percentage fee bands for classes

of buildings (see Table 3)
Construction cost Class 1 Class 2 Class 3 Class 4 Class 5

bands* % % % % %
£50 000 to 75 000 12.30–14.00 11.40–12.40 – – –

£75 000 to £100 000 11.75–12.30 10.80–11.40 10.65–11.15 – –
£100 000 to £250 000 10.20–11.75 9.60–10.80 9.60–10.65 10.60–11.40 11.40–11.90
£250 000 to £500 000 9.70–10.20 9.35–9.60 8.95–9.60 9.80–10.60 11.10–11.40
£500 000 to £750 000 9.50–9.70 9.30–9.35 8.60–8.95 9.40–9.80 10.70–11.10

£750 000 to £1 million 9.30–9.50 9.20–9.30 8.40–8.60 9.10–9.40 10.30–10.70
£1 m to £2.5 million – – 7.70–8.40 8.70–9.10 9.90–10.30
£2.5 m to £5 million – – 7.25–7.70 8.40–8.70 9.60–9.90

£5 m to £7.5 million – – 7.10–7.25 8.20–8.40 9.30–9.60
£7.5 m to £10 million – – 6.90–7.10 8.10–8.20 8.90–9.30
£10 m to £50 million – – 6.20–6.90 7.40–8.10 7.40–8.90
*Where no figures are given, insufficient data was available

Survey of Fees
TABLE 3 Classification of Building Types

Type Class 1 Class 2 Class 3 Class 4 Class 5
Industrial l Storage l Speculative l Purpose-built
sheds factories and factories and
warehouses warehouses
l Assembly
and machine
workshops
l Transport
garages
Agricultural l Barns and l Stables l Animal
sheds breeding units
Commercial l Speculative l Multi-storey l Supermarkets l Department stores l High risk
shops and l Banks l Shopping centres research and
l Surface car underground l Purpose-built l Food processing units production
parks car parks shops l Breweries buildings
l Office l Telecommunications l Research and
developments and computer development
l Retail buildings labs
warehouses l Restaurants l Radio, TV
l Garages/ l Public houses and recording
showrooms studios
Community l Community l Community l Civic centres l Theatres
halls centres l Churches and l Opera houses
l Branch crematoria l Concert halls
libraries l Specialist libraries l Cinemas
l Ambulance l Museums and art l Crown Courts
and fire galleries
stations l Magistrates/ County
l Bus stations Courts
l Railway
stations
l Airports
l Police stations
l Prisons
l Postal
buildings
l Broadcasting
Residential l Dormitory l Estate housing l Parsonages/ manses l Houses and
hostels and flats l Apartment blocks flats for
l Barracks l Hotels individual
l Sheltered l Housing for the clients
housing handicapped
l Housing for l Housing for the frail
single people elderly
l Student
housing
Education l Primary/ l Other schools l University
nursery/first including middle and laboratories
schools secondary
l University complexes
Recreation l Sports halls l Swimming pools l Leisure pools
l Squash courts l Leisure complexes l Specialised
complexes
Medical/ l Clinics l Health Centres l Teaching
Social l General hospitals hospitals
services l Nursing homes l Hospital
l Surgeries laboratories
l Dental
surgeries
6 Quantity surveyor
4 Service
(1) The RICS publishes two fee scales, Nos 36 and 37. Scale 36 is an ‘inclusive
scale’; scale 37 gives an itemised scale of professional charges, breaking the
quantity surveyor service into a number of components, and is only likely to have
relevance in the event of a contract proceeding on the basis of an approximate
Bill of Quantities or Schedules of Rates.
When defining the service it is important to consider whether a Bill of Quantities

is required for the air-conditioning, heating, ventilating and electrical services as,
if undertaken by the quantity surveyor, this generates an additional fee according
to both scales. The ACE Conditions provide that the services consultant can
produce a Bill of Quantities (for an additional fee based on the quantity
surveyor’s scale) but it is preferable that if a Bill is required this be undertaken
by the quantity surveyor, so as to maintain uniformity of cost control. It also
provides an independent check (by the quantity surveyor) on the adequacy of
information shown by the services engineer. For many commercial projects an
M & E Bill is not necessary and frequently the quantity surveyor provides a
reasonable measure of cost control within the fee.
(8) Capital allowance. In the UK it has been a traditional part of the Government’s
fiscal policy to provide tax allowances in the form of an annual writing off of a
proportion of the original construction costs. This does not apply to all forms of
building or every part of construction; but where it does apply can provide a
valuable tax benefit. Plant and machinery is the most frequently cited instance,
but the project manager should also review with the client’s tax adviser to secure
the best current advice, and then direct the quantity surveyor.
Tax allowances can usually only be claimed by the party providing the
development finance. Whilst the client will therefore not always gain direct
benefit, it is necessary to retain the service in case this is required by the fund.
(9) Consulting engineers’ fees. As one means of determining engineering

consultants’ fees, the ACE Conditions of Engagement require the percentage
scale to be calculated against the respective value of the structural, and
mechanical and electrical services, content of contract. It is usual for the client
and engineer(s) to accept the quantity surveyor’s assessment.
6 Fee
Scales 36 and 37 provide for fees to be calculated according to three categories of
work arranged in approximate order of complexity. Speculative standard offices and
other relatively simple forms of construction fall into category C; whilst shopping
centres and offices incorporating detailed tenants’ requirements are more likely to
fall within category B. Category A relates to specialised buildings such as libraries
and universities.
Category B
Value of work Fee

£300 000 – £600 000 £16 110 + 3.9% on balance over £300 000
£600 000 – £1 500 000 £27 810 + 2.8% on balance over £600 000
£1 500 000 – £3 000 000 £53 010 + 2.6% on balance over £1 500 000
£3 000 000 – £6 000 000 £92 010 + 2.4% on balance over £3 000 000
over £6 000 000 £164 010 + 2.0% on balance over £6 000 000
Category C
Value of work Fee

£300 000 – £600 000 £13 800 + 3.3% on balance over £300 000
£600 000 – £1 500 000 £23 700 + 2.5% on balance over £600 000
£1 500 000 – £3 000 000 £46 200 + 2.2% on balance over £1 500 000
£3 000 000 – £6 000 000 £79 200 + 2.0% on balance over £3 000 000
Over £6 000 000 £139 200 + 1.6% on balance over £6 000 000
The additional scale fees, when bills are required for air conditioning, etc are:
Value of service Additional fee

Up to £120 000 5.0%
£120 000 – £240 000 £6 000 + 4.7% on balance over £120 000
£240 000 – £480 000 £11 640 + 4.0% on balance over £240 000
£480 000 – £750 000 £21 240 + 3.6% on balance over £480 000
£750 000 – £1 000 000 £30 960 + 3.0% on balance over £750 000
£1 000 000 – £4 000 000 £38 460 + 2.7% on balance over £1 000 000
Over £4 000 000 £119 460 + 2.4% on balance over £4 000 000
The inclusive scale of professional charges provides that the printing of a reasonable
number of Bills of Quantity and other documents, together with normal travelling
and other expenses, are included within the percentage fee.
However, the principle of using standard fee scales is no longer considered

necessary. Non-standard rates or agreed lump sums are now often used in the
UK.
7 Structural engineer
The Association of Consulting Engineers is the presiding body which publishes
‘Terms and Conditions of Engagement for Structural Engineering Services ’. Those
for the structural engineer are contained in a booklet titled ‘ACE Conditions of
Engagement, Agreement 3 for Structural Engineering work where an Architect is
appointed by the Client – Harmonised with “Architects Appointment”’.
4 Service
(1) Following the lead of the RIBA, Agreement 3 describes the ‘normal service’
under a sequence of work stages approximating to those set out in ‘Architect’s
Appointment’. (NB: Although ‘Architect’s Appointment’ was superseded by
SFA in June 1992, the Work Stages remain the same in principle.)
Whilst the nature of the service under each heading is described, there is only
minimal reference to the features of the development which the structural
engineer is to design or supervise. Consequently the project manager should
define any particular matters for which the engineer is responsible, as indicated
in the draft (Appendix A3).
Clause 7 of Agreement 3 describes a number of additional services (not included

in the normal service) for which payment is on a time basis. Seldom will any of
the additional services be required, but for a large complex development this
section should be reviewed. If any additional service is needed, it is preferable
that payment be absorbed in the principal fee calculation rather than left for
assessment on a time basis as provided in Agreement 3.
Adjacent properties. In establishing the structural engineer’s brief, it is

particularly important to consider the need for involvement with properties that
are to be retained either within or outside the development site. If the stability or
structural condition of such properties may be affected, the structural engineer
can be instructed to monitor their condition and represent and/or negotiate with
any third parties concerned.
Ground investigation. A ground investigation is invariably required for

development work, and will normally be undertaken by a specialist company to
the direction of the structural engineer.
(6) Record drawings. As-built drawings are listed by Agreement 3 under Clause 7.
Additional Services (time charge!). Engineers’ drawings are vital to the long
term ownership of a building, and possible future alterations or refurbishment.
6 Fee
Agreement 3 (Clause 10) recognises four alternative methods of payment.
a. Calculated upon the cost of the project

b. Calculated upon the cost of the works
c. As a lump sum
d. On a time basis.
According to Agreement 3, ‘Project’ may be taken to mean the total contract sum,
whilst ‘Works’ are said to mean that part of the project for which the client has
engaged the engineer to provide professional services!
Agreement 3 goes on to describe a complex formula and graph for determining fees
based on the cost of the ‘Works ’; too complex to attempt a precis here. I earnestly
commend every project manager to alternatives (a) or (c), for the reasons mentioned
earlier under ‘General Criteria’, which seem equally to be appreciated by structural
engineers.
The ACE Conditions provide for expenses to be reimbursed at cost. A fixed lump
sum limit or adjustment in the fee percentage provides greater budgetary certainty.
7 Resident Engineer
Agreement 3 stipulates that the client shall reimburse all salary and wage payments
paid by the consultants to site staff, plus a percentage to be agreed for head office
overheads and administration. Reasonable in principle, but beware the salary
increase(s) part way through the job which blows the budget allowance! Better to
agree a fixed gross monthly sum, with an aggregate upper limit.
Memorandum of Agreement. Agreement 3 contains a Memorandum of Agreement

to be signed by the client and consultant recording the engagement and terms of
payment. This should be superfluous if the form set out in Appendix A3 is adopted.
8 Mechanical and electrical services

consultant
4 Service
(1) Mechanical and Electrical Services Consultants are commonly appointed under
the Association of Consultant Engineers Conditions of Engagement Agreement
4A. This provides three alternative bases of appointment, known as Full duties,
Abridged duties and Performance duties. (See also M & E Subcontractor
Appointment, below). This is a vital early decision. It affects the extent to which
the design of the services is on a comparable level with architecture and
structure; it also significantly influences the time when the services subcontractor
must be appointed. See ‘Sequence ’ below.
Agreement 4A specifies in detail the work programme for each form of duty. The
respective programmes are divided into eight stages, which are intended to match
the RIBA work stages.
Unless stated otherwise, the Full and Abridged duties provide for the consultant
to produce a Bill of Quantities (for which an additional fee based on the quantity
surveyor scale is payable). A Bill of Quantities for the M & E services is
infrequently required, but, when it is, it is usually preferable for it to be prepared
by the quantity surveyor. This acts as a check on the quality of information
produced by the consultant and assures uniformity of cost control. By virtue of
other provisions in Agreement 4A, the services consultant still retains
responsibilities for providing budgetary advice and account checking.
Even when a consultant is appointed to Full duties, the subcontractor will have to
produce installation drawings, which Agreement 4A describes as ‘drawings
based on the tender drawings and/or co-ordination drawings (by the consultant)
showing details of the subcontractor’s proposals for the execution of the works.
The drawings will be in such detail as to enable the works to be installed’.
Separate to the detailed list of duties given for the three principal services,
Agreement 4A schedules a number of optional Additional duties. It therefore
requires a laborious cross check to establish what is automatically included in the
appointment, and which of these further duties may be required for a particular
project. Most consultants recognise this problem and are willing to take a broad
view, hence the wording in the draft Appointment. Although Agreement 4A
requires the M & E consultant to carry out commissioning and testing
procedures, to inspect the works on completion and record any defects, there is
no mention of certification to support the architect’s Certificate of Practical
Completion. Given the significance of the consultant’s role, it is desirable that
there should be a clear contractual record of acceptance, and hence the provision
in paragraph 4.1.3.
Agreement 4A contains an Appendix describing the engineering services and

equipment included in the consultant’s appointment; a copy is reproduced in the
following pages.
(6) Record drawings . Both Full and Abridged duties provide in the scale fee for the
consultant to ‘receive and examine, on completion of the work, copies of record
drawings, operating instructions and maintenance schedules prepared by the sub-
contractor and deliver same to the client’. However, if responsibility for
producing this information is placed on the consultant then, unless otherwise
stated, an additional time charge fee is payable.
6 Fee
Agreement 4A contains three graphs for calculating the fee according to each type of
duty, but interpretation requires (in the UK) knowledge of the output price index
produced quarterly by the Department of the Environment. The cost of works,
against which the scale fee is then applied, is the value of the specialist subcontract
together with some additions for attendant builders’ work, and to this aggregate
figure there is a further 15% to cover profit and preliminaries. When assessing fees
on the scale basis, be sure not to overlook the value of these additions.
The fee arrangements are further complicated by a series of notes at the side of the
work programme for each type of duty, indicating that many of the items in the work
stages are subject to other forms of payment – time charge, supplementary scale, and
quantity surveyor scale. In particular, stages 1 and 2 (pre-design work) are entirely
on a time charge unless otherwise stated. It is therefore preferable clearly to record
that the consultant’s fee will be based solely on the scale or otherwise agreed fee,
and will be in respect of all the responsibilities listed in the work plan (except
perhaps Bill of Quantities) unless specific exceptions are made and stated.
Fortunately, services consultants, like other disciplines, are happy to work on either
a lump sum fee or a percentage fee of the total building contract. As a general
indication, a fee for Full duties assessed on the total contract value is likely to rest
between 2% and 2.7% depending upon the size, complexity and value of the M & E
services and building contract.
Expenses. According to Agreement 4A, the consultant will be entitled to

reimbursement of expenses in addition to the scale fee. A percentage fee inclusive of
expenses, or a lump sum, are more positive alternatives.
7 Resident Services Engineer

Similar observations apply as for the Resident Structural Engineer (above).

Agreement 4A includes a Memorandum of Agreement to be completed and signed
by the consultant and client. This should be superfluous if the form set out in
Appendix A4 is adopted.
8.3 M & E subcontractor appointment

In reviewing the appropriate appointment basis for the consultant (ie Full, Abridged
or Performance Duties), the project manager must take into account the service
which will in consequence be required from the M & E subcontractor.
Simplistically, the distinction may be described as the extent to which the consultant
and subcontractor are respectively responsible for producing the M & E designs –
and it should be acknowledged here that many reputable M & E subcontractors have
competent design teams capable of operating from the concept design stage
onwards.
The primary considerations for the project manager are:
l The degree of comparability required in the respective consultant’s design

responsibilities.
l The complexity/simplicity of the M & E installation.
l The degree of co-ordination/integration necessary between the M & E designs

and the architectural/structural disciplines during the pre-contract design
stage; therefore the timing and selection method by which the subcontractor is
to be appointed.
l The extent of tender competition required and the certainty of design and
price that is to be embodied.
l The degree of consultant verification of the M & E subcontractor’s design,

on-site workmanship, variations, commissioning, snagging and maintenance
manuals.
SEQUENCE OF WORK STAGES

(RIBA PLAN OF WORK AND ACE AGREEMENT 4A)
RIBA ACE
PLAN OF WORK AGREEMENT 4A
Work APPENDIX APPENDIX APPENDIX
Title Work stage
stage 1 2 3
Inception &
A Feasibility 1
PRE-DESIGN
B Strategic Briefing 2
C Outline Proposals 3
D Detailed Proposals 4
DESIGN
E Final Proposals 5
Production
F Information 6
Tender
G Documentation
See listed duties 7
H Tender Action
J Mobilisation CONSTRUCTION
Construction to
K Practical Completion See listed duties 8
After Practical
L Completion
INTENDED HARMONISATION
Agreements
Contents
9. Development partnerships – contracts
10. Development/building agreements

10.1 Approved plans, elevations and specifications
10.2 Definitions
10.3 Demolition/site clearance/services diversions
10.4 New main services
10.5 Consultants
10.6 Programme
10.7 Delays during building contract
10.8 Multi-phase development
10.9 Insurance
10.10 Building contract
10.11 Ground landlord’s right to enter on site during building construction
10.12 Progress report to ground landlord
10.13 Transfer of development obligations to ground landlord in event of
developer ’s default
10.14 Archaeological finds
10.15 Site hoardings
10.16 Developers’ boards
10.17 Works for third parties
10.18 Leasing to tenants
10.19 Tenants’ shopfitting
10.20 Displaced traders
10.21 Local authority obligations
10.22 Site access
10.23 Completion certificate
10.24 Development outlay
10.25 Arbitration clause
10.26 Example of development agreement – Process analysis
11. Joint venture agreements

11.1 Definitions
11.2 The company
12. Finance agreements

12.1 Approved drawings and specifications
12.2 Working drawings, services installation drawings, etc
12.3 Consultants’ appointments
12.5 Deleterious building materials
12.6 Contract administration
12.7 Development outlay/developer’s calldown
12.9 Tenants
12.10 Record drawings and manuals
12.11 Finance provisions
12.12 Reflection
9 Development partnerships – contracts

Development projects are frequently conducted through the combined enterprise,
contribution and expertise of two or more parties. Most obviously the assets of a site
owner are combined with the skills of a developer and the funds of a financier. Thus
the respective contributions will differ in character and value.
Whatever the individual circumstances, the activities, obligations and rewards of the
parties will be recorded in a legal document, conventionally titled a ‘Development
Agreement’ or ‘Building Agreement’, or ‘Joint Venture Agreement’. The two
former (whose title names signify the same type of contract and relationship of the
parties) are employed where the parties retain their individual corporate and/or
statutory identity. In a joint venture a new corporate entity is created, with the
interests of the participating parties usually expressed as a shareholding.
10 Development/building agreements
Probably the most familiar application of development agreements has been in the
formation of partnerships between local authorities and developers for town centre
redevelopments. The local authority has typically been responsible for site assembly
and the developer for design, construction and marketing, including the provision of
finance. However, the principles underlying the need for, and terms of, a
development or building agreement, are equally applicable to project partnerships
between private sector organisations where there is no public authority interest
involved. Usually the legal estate or interest of the developer will only be fully
realised on completion of his development responsibilities, the common arrangement
being that the agreed draft form of lease between the superior partner (landlord) and
developer, or other statement of developer’s reward, is set out in the development
agreement. Consequently, one of the project manager’s ultimate objectives on behalf
of his developer client is to ensure the grant of a lease or payment of the reward is
promptly and effectively achieved.
Development agreements contain numerous clauses which by convention, created

through experience and time, are found in virtually all lawyer drafts. There is not,
however, a standard form of agreement. Each will be prepared specifically for the
development contemplated, usually by the lawyers representing the owner of the
major legal interest in the site, and the drafting will therefore display a certain degree
of ‘originality’ even in the standard clauses. I would advise any project manager, no
matter how extensive his experience, to read a draft agreement from cover to cover,
from ‘The Recitals’ to ‘here Witnesseth’. Occasionally the project manager may
conclude that the drafting is fastidious or excessively weighted against his client, but
at least he will gain a feeling of proportion between the respective parties’ rights and
obligations. With this in mind, the project manager can then turn to specific study.
It is as vital to ensure that the responsibilities of the developer client are clearly
stated as it is to ensure that they are not unreasonably onerous. Also, the project
manager has the task of implementing and carrying through the developer’s
obligations. It serves no purpose to the project manager, his team or his client (nor
indeed the project partner) if, for example, the project manager ’s time is absorbed by
a requirement for providing too frequent written reports, or the project partner can
interfere in minor design changes.
By the same token, the project partner’s obligations must be equally certain. These
are likely to be found in the non-conventional clauses as they deal mainly with the
particular circumstances of the site and the partner’s contribution to the
development. Thus the project manager must consider carefully whether the clauses
expressing these responsibilities are sufficient and specific. It is no comfort during
the building contract to find that the site owner cannot hand over possession of part
of the site at a time promised but not recorded in the development agreement. The
contractor will have little sympathy for the client, and the project manager will have
none from either.
The developer client takes on obligations and responsibilities consistent with his role
and expertise. The project manager must ensure that he has the contractual rights and
opportunities to meet them. I cannot recommend too strongly that the project
manager participates in the drafting and negotiation process. In my experience,
solicitors welcome information and guidance which help the clauses of the
agreement to be properly cast, particularly in relation to the practical and physical
aspects of carrying out the development.
The following refer to clauses commonly found in development or building

agreements in the UK, which will directly affect project administration on the
client’s behalf.
10.1 Approved plans, elevations and specifications

These should be in sufficient detail for adequate definition of site and floor layout,
elevation treatment and material (eg drawings to 1:200 scale) to ensure reasonable
understanding of the building form as between the ground landlord and developer.
Detail such as that contained in working drawings and bills of quantity should be
avoided. Obtain early informal agreement from the ground landlord to the calibre of
information required under this heading.
If drawings and/or specifications are to be stated in the development agreement, be

alert to the probability that these may be subject to a number of revisions before
building commencement; advise solicitors accordingly and ensure final or current
drawing numbers etc are provided prior to engrossment.
Alternatively, the agreement may provide for the drawings to be agreed

subsequently and identified, with signed sets held by each party to the development
agreement.
The developer must be entitled to make alterations subject to ground landlord’s

approval, which shall not be unreasonably withheld. Such alterations should be
recorded in writing between the parties.
10.2 Definitions
Terms such as ‘the plan’, ‘development area ’, ‘the site’, ‘the property’, ‘the
premises’, and others similar, are often used to define different elements of the
project. Ensure that there is a clear definition of each phrase (usually provided in the
preambles to the development agreement); and that subsequent references in the
body of the development agreement are consistent with their respective
interpretations. Such terms may also relate to drawings appended to the agreement.
Check that these are correct and also any delineating colouring they contain.
10.3 Demolition/site clearance/services diversions

The ground landlord’s responsibility, if any, should be described. Indicate whether
demolition or site clearance is to include removal of foundations, and stopping up
only or complete removal of mains services. Murphy’s law dictates that if this is not
clearly expressed, the ground landlord will regard his responsibility for demolition
as the superstructure only. This will be followed, once the client has taken
possession of the site, by the unexpected finding of fortified underground structures,
conveniently missed by the trial holes. An early and damaging blow to the client’s
budget!
10.4 New main services

State the ground landlord’s responsibility, if any, for bringing main services to the
site. If such responsibility exists, the point from which the developer must make his
connection should be established by the project manager (eg site boundary or nearest
main road).
10.5 Consultants
Although not essential, the practice of naming the respective developer’s

consultants, and any similar representatives acting for the ground landlord, is to be
encouraged because of the awareness this brings to both parties’ activities.
Consultants and/or contractor collateral warranty

It is to be expected that the ground landlord will require the developer to obtain a
warranty from the developer ’s consultants and/or contractor (and subcontractors)
confirming that they owe a duty of skill and care to the ground landlord. The project
manager should ensure the principle is promptly cleared with the developer ’s team,
notwithstanding any provision in the consultants’ terms of appointment (Appendix
A, Clause 4.2).
The British Property Federation publishes standard forms of warranty, which were
drafted in conjunction with the RIBA, RICS (for quantity surveyors), ACE and
CIOB. The warranties are expressed in the accompanying guidance notes to be used
where consultants and contractors are to provide commitments to financiers,
purchasers or tenants. However, I believe the style to be equally appropriate to the
requirements of a ground landlord, and I therefore suggest that the project manager
consider recommending that this be the form adopted. I should add that the RICS has
recommended the BPF warranty as suitable also for project managers who are
requested to provide this commitment. This should be with the same amendments as
are noted in the standard form as appropriate for quantity surveyors.
Consultants – advice on terms of development agreement

While the development agreement is still in draft form, the project manager should
ensure that he informs the consultants (and the contractor where already selected) of
those terms which directly affect them or their conduct of the project. This should be
in sufficient time to permit advice and/or comments to be absorbed into the legal
negotiations. On completion of the agreement, copies of the final relevant clauses
should be issued to the development team. It is, however, important for the project
manager to ensure that confidential information, for example financial terms, is
excluded from circulation.
10.6 Programme
Date of entry
The date of entry into the site is often specified in the agreement, and is frequently
related to factors such as satisfaction of conditions precedent, exchange of approved
drawings, availability of vacant possession, etc. The project manager should
consider the practicality of the date of entry as defined.
More than once I have known the initial drafting to express the date of entry as so
many weeks after signing of the development agreement or agreement of the
approved drawings. The timescale has appeared to be arbitrarily decided with no
consideration given for the programme period needed to complete detail design,
prepare Bills of Quantity and obtain tenders.
Yet frequently the developer and project manager will have held the consultants on a
tight fee rein to restrict speculative expenditure with consequent limitation on
amount of design work done so far. Months rather than weeks are required to
progress through the pre-contract programme. Often the development clock starts
running from the date of entry, so it is vital to have the appropriate ‘pre-entry’
timescale stated in the agreement.
Vacant possession
If vacant possession of the whole site is not available on the date of entry, ensure the
dates for subsequent areas are specified and advised to the consultants and contractor
for consideration during pre-contract programming, and stated in the building
contract terms.
Building period
The period permitted for construction is usually stated. Given that the agreement is
probably drafted many weeks before skilled (contractor’s?) analysis of the
programme is possible, this can at best be an estimate only. I have been surprised
how rarely this has been appreciated by the lawyers and other professionals in the
team. The project manager must persuade them, and in the cause of securing a
commonsense document, include an element of contingency.
10.7 Delays during building contract

The development agreement must provide that the developer is entitled to an
extension of time resulting from any circumstance beyond the control of the
developer. Limiting the rights for extensions only to those which are granted to the
building contractor is insufficient. The developer enjoys beneficial use only after
practical completion, and that may be a date later than calculated with the addition of
extensions of time formally granted to the building contractor.
The implications of this condition should be fully appreciated by reference to the

remainder of the document. What is the penalty on the developer if the programme
overshoots? Most likely the financial obligation to the ground landlord starts to run
before the developer enjoys the benefit of income from the scheme. Liquidated
damages under the building contract are not an adequate or appropriate recompense.
(NB: the right to damages under the building contract, and the timing of their award,
will be judged by issues distinct from the development agreement. The set value of
liquidated damages should relate to what is appropriate for the building contract; it is
not a figure derived from rents, interest and void costs, although I believe that is how
it has often been assessed.)
10.8 Multi-phase development

Where the development agreement refers to a series of developments – perhaps by
more than one party – two important features should be included in the document:
Phasing diagrams
For each significant stage of the development programme there should be a plan
showing the respective site ownerships, extent of contractor’s works area, route for
contractor’s access, public rights of way, routes of services.
Timetable
A statement, perhaps in the form of a bar chart, should be included showing the
periods of time allocated to the respective building contracts and any consequential
sequence or other interrelationship that is to be observed. Where the timing of one
development is dependent upon another, the development agreement should provide
for the timetable to be extended, and hence the developer ’s obligations protected, in
the event of a preceding development being delayed. Such consequences must also
be reflected into dates for calculation and/or commitments for payment of ground
rent.
10.9 Insurance
Typically the developer will be required to insure for reinstatement and three years
loss of ground rent, and to indemnify the ground landlord against third party
liability. The draft clauses should be referred to the client’s insurance broker for
comment/approval as soon as the draft agreement is received.

Definition
It is usual for the development agreement to define the form of building contract to
be used by the developer (eg JCT 1980 Local Authority Edition, with Quantities).
Approval to conditions
Occasionally the ground landlord requires that his approval must be given to the
conditions of the building contract. This should be resisted if possible, on the
premise that it is the developer and not the ground landlord who is party to the
building contract and it is he therefore who is responsible for the employer’s
obligations. However, this argument may not suffice if the ground landlord has the
right to take over the building contract in the event of the developer’s default, or his
reward is tied to control of development costs, in which case the ground landlord’s
right of approval should be qualified by ‘not to be unreasonably withheld’.
Approval to tender
If the ground landlord insists on the right to review the contract tender, this should
be by liaison with the developer ’s quantity surveyor and only occur following the
latter’s recommendation to the developer that he is satisfied with the terms and price
on which it is proposed to let the building contract, ie following negotiations and/or
tender vetting with the proposed contractor.
The agreement should state that the ground landlord’s tender review must have
regard to the full terms and conditions of the building contract and any notice of
objection against the tender which the developer proposes to accept must specify the
reasons.
Contract administration
Neither the ground landlord nor his professional representatives should have
sanction over the developer’s consultants’ duties to administer the contract, most
particularly in connection with the preparation of valuations and issue of certificates.
It is reasonable to allow the ground landlord access to the developer’s quantity
surveyor to inspect the basis of assessment of valuations, but if the ground landlord
thereafter wishes formally to register concern, this should be directed to the
developer (project manager) and the matter negotiated accordingly.
10.11 Ground landlord’s right to enter on site during

building construction
It is usual to permit the ground landlord or his appointed representatives to enter on
site at all reasonable times (but preferably by prior appointment) for the purposes of
inspecting progress, workmanship or testing of materials, but not to have any right to
issue instructions or affect the progress of works. Any notices should subsequently
be served on the developer and the agreement should allow ‘reasonable time’ for the
developer to comply or serve counter notice.
10.12 Progress report to ground landlord

Only the developer (or the project manager on his behalf) should provide formal
progress reports to the ground landlord. If possible, a commitment to provide the
ground landlord with copies of site meeting minutes, architect’s instructions, etc, and
to permit the ground landlord’s representatives to attend site meetings, should be
avoided. Such requirements do not reflect the estate interest of the ground landlord.
However, ground landlords frequently appoint professional representatives to
monitor the developer’s performance, and the distinction between developers’ and
ground landlords ’ roles has become difficult to sustain. The project manager must
therefore be prepared to acknowledge and treat positively this third party
involvement. He should alert his team to possible representation of the ground
landlord at site meetings, and the circulation of minutes.
10.13 Transfer of development obligations to ground

landlord in event of developer’s default
Where this contingency is provided for in the agreement the project manager should
advise the developer ’s consultants and insert an appropriate clause in their respective
terms of appointment.
The development agreement and consultants’ terms of appointment should provide

that the developer is not responsible for the actions or fees of the consultants,
subsequent to the ground landlord exercising the default provisions.
Transfer provisions must also be inserted in the building contract and any nominated
sub-contracts and/or design warranties by specialist sub-contractors.
10.14 Archaeological finds

Ownership of any discovery is usually reserved to the ground landlord, hence he
should bear financial responsibility for any costs arising from his directions which
may cause delay or amendments to the building contract.
10.15 Site hoardings
The development agreement should specify the responsibility for erecting site
hoardings. These are often used for commercial advertising; accordingly, whether
the hoardings are erected by the ground landlord or through the developer, the
agreement should specify the distribution or treatment of income (eg as a deduction
from development outlay).
Arrangements are often made with specialist advertising companies who will tender
rent against a responsibility also to erect the site hoardings. The licence to the
advertising company should contain provision for the alteration, partial removal and
termination of the licence to suit the building contractor’s works and the completion
of the development. Provision for adjustment of income in the event of alteration or
partial removal should be included in the licence.
10.16 Developers’ boards

Notwithstanding any other restrictions the development agreement should provide
automatic approval to the erection of the usual developers’, contractors’ and letting
agents’ boards.
10.17 Works for third parties

Where the development agreement provides for the developer to undertake within
his building contract specific works on behalf of the ground landlord or a named
third party, but for which he is to be financially reimbursed, the following must be
included and implemented:
l The drawings and specification for such works must be identified in the
development agreement. The document should state that the developer shall
not undertake any alterations or variations unless the ground landlord or third
party has formally approved an estimate of the cost. The project manager
should ensure that the developer ’s estimate is based on discussions with both
contractor and consultants and include allowance for any consequences which
the change may have on the developer ’s own building contract obligations
and costs.
l The financial responsibility of the ground landlord or third parties should

include appropriate allowances for fees and other on costs, eg finance.
l When considering a request to undertake works on behalf of others, the

project manager should clearly indicate to those parties the time by which
such decisions are required. If still in the project preparation stage, specific
dates can be included in the development agreement.
l The basis on which the developer may claim reimbursement should be his
quantity surveyor’s valuation and architect’s certificate. The project manager
should instruct the consultants to identify separately the value of third party
works. The developer’s service of the appropriate certificate to the third party
plus any addition for on costs should constitute notice for reimbursement.
l A time limit of, say, 14 days should be given within which reimbursement has
to be received or else interest at a specified rate, say 2% over commercial
bank lending rate, will accrue. It is important to appreciate that as such works
are included in the developer’s building contract, they are included within the
aggregate of usual monthly building certificates. Consequently, the project
manager must ensure there are effective arrangements for notifying third
parties of impending reimbursements (eg forwarding a copy of the quantity
surveyor’s valuation, which usually precedes the architect’s certificate by a
few days) so that the developer does not incur a negative cash flow by
temporarily financing the third party works. The project manager must notify
the consultants of the arrangements required and agree the timing principles
with the developer and third party personnel.
The importance of adhering to these disciplines cannot be over-stated. In major

shopping centre developments, I have known there to be a number of these
arrangements running simultaneously. It can be a full-time occupation keeping track
of the monthly paperwork and finance! Strongly framed clauses, and meticulous
adherence, have proved essential.
10.18 Leasing to tenants

Ground landlords often reserve the right of approval to proposed tenants. This
should be conditioned by the phrase ‘approval shall not be unreasonably withheld’.
Rights to notification or approval of lease terms are preferably limited to the primary
considerations such as the length of lease, rent and rent review interval. The project
manager should resist any right of approval by the ground landlord to the detailed
terms of tenant leases. The developer usually represents the ground landlord’s
overall security and if the latter becomes involved in lease negotiations this may
frustrate and protract efforts to agree leases with tenants. Reassurance can
sometimes be provided to the ground landlord by agreeing a specimen occupation
lease prior to the first lettings taking place.
10.19 Tenants’ shopfitting

The development agreement should permit occupation by tenants for fitting out or
trading prior to the architect’s certificate of practical completion or ground
landlord’s own completion certificate having been issued to the developer.
10.20 Displaced traders

For town centre retail development, local authority ground landlords frequently
mitigate compensation to displaced traders by requiring the developer to give the
traders a first option on accommodation within the new development. Where so, a
schedule of displaced traders must be included in the development agreement.
To facilitate marketing on the developer’s timescale and to control retail pattern, the
agreement should provide that the developer’s offer to displaced traders accords with
the following:
l Each trader to supply satisfactory references.

l Be at an open market rack rent.
l Be for a unit specified by the developer.
l Be on standard lease terms.
l The offer to be made at the time determined by the developer.
Prior to formal offers being made, it is advisable for the project manager to ensure
that the ground landlord is notified of the proposed location of the units to be offered
to the respective traders, and the rents to be specified. The ground landlord should
also approve the lease to be offered.
Each offer should include a fully completed lease, plans, specifications and rent,
such that the displaced trade has only to sign the agreement for lease and return it
within the specified period (say two months) in order to secure his position. This
procedure enables the developer to insert certainty into his marketing campaign and
ensures that the traders cannot unduly procrastinate or negotiate.
10.21 Local authority obligations

In addition to provisions relating to the giving of site possession, the project
manager should ensure that obligations and timescales relating to statutory
procedures for road closure, pedestrianisation orders, etc, are clearly identified.
10.22 Site access

If specified in the development agreement, the project manager must agree this with
the consultants and prospective contractor, and a similar provision be entered in the
building contract.
Whether or not mentioned in the development agreement, the project manager

should include in the building contract a responsibility on the contactor to keep roads
adjacent to the development site free of mud and debris.

It is vital for the project manager to distinguish between the completion certificate
required for the purpose of the development agreement and the certificate of
practical completion issued under the building contract.
The first is a certificate required specifically for the purpose of determining that the
developer ’s contractual obligations to design and build according to the development
agreement are complete. It is an issue between developer and ground landlord.
A certificate of practical completion arises out of the building contract, to which the
developer (employer), contractor and consultants are the principal parties. The
project manager must ensure the ground landlord has no lien or sanction over the
issue of the certificate of practical completion. The alternative would give the
ground landlord a relationship to the building contract, albeit he is not a party
thereto, and could frustrate the developer (project manager) and his consultants’
ability to meet their contractual obligations under the building contract.
It is, however, appropriate for the development agreement to provide that the
developer shall give notice to the ground landlord in advance – say 14 days – of the
anticipated date on which practical completion will be certified, so that the ground
landlord may have the opportunity of notifying the developer of any matters which
he believes have not been satisfactorily undertaken in accordance with the approved
plans and specifications. The developer and his consultants then have the
opportunity to decide whether they agree with matters notified and, if so, whether
these ought properly to be undertaken by their contractor before a certificate of
practical completion is issued.
The development agreement should next provide that, following the issue of the
certificate of practical completion, the developer may give due notice to the ground
landlord and call for the latter ’s completion certificate. A time limit of, say, 14 days
should be imposed within which the ground landlord must accept or give notice of
any reasons why he does not consider the building to have been satisfactorily
completed. If notice is given, the developer has the option of either remedying the
‘defect’, in which event the notice and response arrangements for the completion
certificate are subsequently repeated, or invoking the arbitration clause under the
agreement.
It is important to appreciate that the grant of the ground lease is normally tied to the
issue of the ground landlord’s completion certificate; also, where calculation of
development outlay is applicable, it is often the completion certificate date to which
subsequent financial calculations are geared (eg capitalisation date, commencement
of ground rent, etc).
10.24 Development outlay

Where the reward to the ground landlord is a function of development outlay
expended by the developer, it is usual for the development agreement to specify the
heads of qualifying expenditure. The project manager should ensure, however, that
there is a general clause stating that development outlay shall include all costs
reasonably incurred pursuant to the development agreement.
Typically, such headings are:
l Building costs
l Consultants fees
l Letting fees
l Legal fees
l Funding fees
l Promotion
l Site survey and soil investigation
l Public inquiry expenses
l Acquisition costs
l Demolitions
l Service diversions
l Insurances
l Non-recoverable VAT
l Project management fees
l Landscaping
l Interest on the rising daily total of all the above at the agreed rate.
l Shortfall between interest payable and rents received prior to the
capitalisation date.
It follows from this that rents or licence fees (eg hoardings) received prior to the
capitalisation date are usually treated as a deduction from the aggregate total of
development outlay.
10.25 Arbitration clause

It is usual for matters in dispute under the terms of a development agreement to be
subject to arbitration. Often the arbitrator is not identified and it is left for agreement
between the parties if and when the need arises; failing this, for there to be reference
to the president of a professional institution whose decision on the appointment of an
arbitrator shall be final.
Where it is agreed to nominate a specific arbitrator in the document, the project

manager should ensure such person is willing to act in this capacity before the
development agreement is exchanged.
10.26 Example of development agreement – Process

analysis
DEVELOPMENT AGREEMENT
FOR
A HOTEL REDEVELOPMENT
The following is an analysis

of the process stages associated with
a small to medium-size development.
By kind permission of Neil Powling DipProjMan FRICS,

PDM Consultancy, Plaistow, UK.
DEVELOPMENT AGREEMENT – dated ................... FOR DREME HOTEL,

LONDON
Clause references are to Schedule 2 of the Development Agreement (Mdev prefix =
clause in Main paret of Agreement)
A Parties
Owner: Owner’s Project Manager:
Developer: Banks: Banks’ Representatives:
Employer’s Agent:
.......... have guaranteed to .................... the observance and

performance by the Owner of the obligations contained in the
Development Agreement including the payment of the Contract
Price £............... Owner retains a retention of 1½% until 7 days
after defects made good (end of defects period). Also see MDev
17.3
Developer to procure that each member of Professional Team

enters into a duty of care warranty (if required) with Mees P
(MDev 2.4)
Freehold interest transferred to Owner for £................ pursuant to

an Agreement .................. MDev 18
B Obligations
Developer: occupies the Premises as licensee from .......... until Completion Date (issue of certificate
of Operability) to undertake the Development Works, the Fitting Out Works and the Hotel Moveable
Items MDev 7.1
Developer’s obligation: to use reasonable endeavours to complete development and fitting out works
in accordance with Base Drawings Specifications, the Design Documents and the Fitting Out Plans by
the Estimated Practical Completion Date and will complete by Longstop Date (X years after date of
Dev Agmnt ................). Time to be extended by extensions allowed to Contractor by Employer’s
Agent unless caused by act default or omission of Developer 1.1, 1.2 & 1.3
Developer: will keep the Owner informed of the progress and any material
problems or delays affecting the Development Works, the Fitting out Works
and/or the Hotel Moveable Items 5.1
Developer: will keep the Owner furnished throughout with a complete set of
Design Documents as amended and revised MDev 3.5
Owner: any extension to building contract caused by act default or

omission of owner will extend time for completion 1.2
Developer remains responsible notwithstanding approvals etc given by Owner or

Owner’s PM re Design Documents, Development or Fitting Out Works MDev 11.2
Standard for Club Rooms and Junior Suites: ...........................................

Standards for all other internal areas inc bedrooms: ...........................................
C Variations
Owner serves “Owner’s Request” for:

(a) Owner’s Development Works Variation
(b) Owner’s Fitting Out Variation Note: a variation described as any
(c) Owner’s Moveable Items Variation 3.1 variation or addition to or omission
from (a) the Design Documents, (b)
10 days the Fitting Out Plans or (c) the Hotel
Moveable Items List requested by the
â Owner in writing
Developer procures: 3.1.1

Estimate with maximum price or
Fixed price quotation (prices to inc fees,
costs of delay, other consequential costs)
10 days 10 days
â â
Owner: accepts in writing Owner: fails to accept
â â
Developer: implements Developer: makes written
demand
for costs of preparing
estimate/quote
â 21 days
â
Owner: aggregate of
estimate/quotes not paid for Owner: pays costs 3.1.4
exceeds £200K, owner
deposits total with Bank
3.1.9
D Restaurant & Bar
Provisional sum allowed by Developer with

approval of Owner
Owner: lets restaurant/bar to 3rd party
Before 9 months before access date

â â
Owner: serves notice to exclude No notice served
â â
Restaurant & Bar excluded Developer: responsible for fitting out Restaurant
& Bar 3.1.10.3 and bears whole cost of provision
â 3.1.10.5
Contract price reduced by £.........

E Notification of Practical Completion
Developer: gives notice to Owner & notice to

Banks’ Representatives of pending issue of
statement of sectional or Practical Completion
â
Owner’s Project Manager: .................... shall
Banks’ Representatives: .................... may
accompany Employer’s Agent in inspection
before issue 7.1
20 working days
(Note: already given 8 working weeks’ notice for
Cert of Op)
â
Owner:
Owner’s Project Manager:
Banks’ Representatives:
may make representations to Employer’s Agent as to whether Statement should be
issued or what qualification should be made 7.2 Employer’s Agent not to be fettered
from issuing such Statement at such time as it thinks fit 7.3
â â
Employer’s Agent: issues statement of sectional
completion of Development Works or Statement of
Practical Completion
F Defects
Date of Practical à Owner: notifies any defects to Employer’s Agent

Completion
12 months â
Employer’s Agent: includes such defects in schedule of defects 8.1.3
â
Under building contract Main Contractor rectifies defects
â
Developer: procures that Employer’s Agent consults with Owner’s
PM
â â
End of defects ç Employer’s Agent: issues statement of completion of Making Good
period Defects 8.1.6
G Owner’s Rights: re attending Premises/Works, meetings & making

representations
Owner, Owner’s PM + other authorised persons: view progress and state of Development Work and
Fitting Out Works and shall address comments to Developer (not ....) 9.1
Owner’s PM + other representatives of the Owner: shall be permitted (procured by Developer and
prior notice of date and time to be given) to attend site and project meetings 9.2. Will be allowed by
Developer to attend formal review meetings (held min monthly) 9.5.2.3
Owner, Owner’s PM: will be allowed by Developer to make representations at the meetings (para 9
meetings or thereafter) to which the Developer will have due regard 9.5.2.4
H Owner’s Rights: re attending Premises/Works, meetings & making

representations (Contd)
Owner’s PM: may make representations regarding deficiencies in design, materials or workmanship
to the Developer who shall procure a proper account is taken 9.4
Owner, Owner’s PM: will be afforded access to the Premises at reasonable times 9.5.1
Owner, Owner’s PM: are (procured by Developer) given access to the records of the Development
Works (inc all drawings & specs) 9.5.2.1
Owner’s PM: will be provided by Developer on request information to enable him to prepare
monthly reports on progress 9.5.2.2
J Banks’ Representatives’ Rights: re attending Premises/Works, meetings &

making representations
Banks’ Representatives: shall be owed by the Developer the same rights available to the Owner’s PM
as above 9.5
K Indemnity by Developer
Developer: shall indemnify the Owner against all costs arising out of any breach by the Developer,
arising out of the ownership of the Premises prior to the issue of the Certificate of Operability or
arising out of the Development Works and Fitting out Works 11
L Provision of Moveable Items & Bond if purchased by Developer
Practical completion The Hotel Moveable Items will be

acquired by .... but the Developer shall
After but within 4 weeks be entitled (notified in writing to ....)
to exclude and purchase direct 12.2
â
Developer: will provide the Hotel Moveable
Items 12.1
5 days’ notice to Owner
â
Owner: shall deposit Bond Sum (total allocated
to Excluded Hotel Moveable items) with
Designated Bank (not defined) 12.3
Note: if the Bond Sum shall be insufficient

the Developer shall pay the balance 12.9
â
If Developer purchases direct he shall (upon
production of purchase invoices) be reimbursed
amounts + VAT (amount limited to allocation in
List) by ............ 12.4
M Certificate of Operability
Developer gives notice to the Manager ..........13.1
8 working weeks à Hotel Opening Certificate as .....
Provision of Hotel Moveable

à Fire Safety Systems Certificate
as .....
The Manager shall arrange to carry out all

appropriate inspections, tests & procedures to
issue: 12.2 à Hotel Operating/Occupancy
Certificate as ......
â
Developer has complied with all obligations
under this Agreement
Note: the Statement of Practical Completion and

Certificate of Operability should be coincident
to avoid liquidated damages liability of 2 working days
Developer to Owner
Developer: to deliver to Owner 2

sets of as built Design
Documents before completion
date
â â
Practical The Manager & the Developer after last 3
Completion ß + à = completion date issued, issue (a copy?) of the Certificate of
Operability (C of O) 13.4
ß Note: the above Certificates may

The Manager & Developer unable to agree on be issued subject to defects –
issue of C of O refer dispute to independent
Developer retains obligation to
surveyor appointed by President of RICS 13.5
rectify 13.7
N Measurement
The Developer & the Owner: shall attempt to

agree (as soon as practicable) the Internal Area
Measurement < 95% – Developer in breach –
of each area set out in Base Drawings and à Owner entitled to damages 14.4
Specifications (in accordance with the Code of
Measuring Practice published by the
RICS/ISVA, 4th ed, 1993) 14.1
10 working days à
â Any Measurements or any ceiling heights less
than relevant minimum specified in CPSS –
The Developer & the Owner: unable to agree PC deemed not to have occurred and treated
measurements as fundamental breach 14.5
â
Dispute: referred to Fellow of RICS acting as an
expert 14.2
P Training facilities
Access Date (date certified by Employer’s Agent for the Owner to

enter certain areas and facilities) but not later than 9 months before
estimated PC
Developer: procures areas and facilities reasonably required are

made available to Owner for staff training and pre-opening activities
15.1
Portakabin or equivalent for Owner’s 4 person pre-sales marketing

team 15.3
9 months
50 m2 Accommodation specified in ......
3 months
Basement Conference room for staff training
4 weeks
Two bedrooms
2 weeks
Back of House
Offices
2 weeks
Kitchens
2 weeks
All public areas on
upper & lower
ground floors
1 week
â â â â â â â
Estimated Practical Completion Date (26 months from ...... + extensions allowed to
Contractor by Employer’s Agent) 15.3
Q Liquidated damages
Liquidated damages: to be stated in clause 24.2

Liquidated damages: payable by Developer to
of Building Contract to be £XXXX per week
Owner £XXXX per week 16.2
16.1
Potential period for which Main Contractor at

risk
for liquidated damages
â
Statement of Practical Completion â
Potential period for which Developer at risk for liquidated damages
à Certificate of Operability
R Claims
Developer: after Completion Date – will prosecute claims for the benefit of the Owner for failures by
Professional team or Building Contractor at Developer’s expense before issue of mg defects cert and
at Owner’s expense after. Owner may assume conduct of claim by giving notice. MDev 10.
11 Joint venture agreements

Whereas with development agreements partners retain a discreet distance, with the
respective identities and roles distinguished, in a joint venture agreement the
interests are merged to form a new corporate entity. Consequently, the client body is
itself corporately structured for the specific purpose of the particular development.
This adds a further dimension for the project manager, who, in addition to the
conventional considerations of day-to-day development, will need to understand this
corporate being and his functions in relation to it.
As always, in an ideal world the best preparation is derived from an opportunity to

contribute to the drafting of the agreement. The chance to direct the partners and
their lawyers on the practical realities of the development can influence and benefit
the corporate provisions of the agreement as much as the direct development
considerations. Of course, that opportunity may not be available; even so, it should
be apparent from the commentary below that the project manager must understand
the full sense of a joint venture agreement. Indeed it is likely that he will be obliged
to do so.
11.1 Definitions
The description of material words and phrases carries the same vital message as
explained under Development Agreements. However, in a joint venture agreement,
there may be the added nuance that the development definitions will carry corporate
overtones. Consequently I must emphasise again the importance of understanding
the meanings ascribed, and ensuring the sense follows through into the body of the
agreement. The following, taken from an example of my own experience, illustrate
the point. Used elsewhere – another agreement, another lawyer – they would likely
have different meanings.
Approved scheme.
The general drawings, plans and specification of works for the implementation of
the building works, annexed hereto, with such modifications, additions and
substitutions as shall from time to time be required or approved by or on behalf
of the company.
Budget.
The budget for the project prepared by the project manager, and approved by
unanimous resolution of the board and as the same shall, with the consent of all
the shareholders, be amended from time to time.
Building contract.
The building contract entered into by the company for the carrying out of the
building works.
Building works.
That part of the project comprising the carrying out and completion on the
property of the demolition and/or refurbishment and construction of buildings
and other facilities in accordance with the approved scheme together with the
construction of such other works as may be approved by the shareholders from
time to time.
Consents.
All permits, permissions, consents and approvals required by any local or
governmental authority, building regulation approvals, building consents and
licences of whatsoever nature as shall be necessary for the lawful implementation
of the project. (NB: note the implications of this given the range of the definition
‘Project’ below.)
Final completion date. Shall mean the latest of:
l The date on which (the company having completed the sale and or letting on
long leases, at a premium of all units) there is no further obligation on the
company to sell or let the units, and the last instalment of any purchase
monies or premiums has been paid to the company.
l The date upon which the final transfer of any reversionary or residual interest
in the property by the company to the management company is effected.
l The date on which the project expenses have been finally determined.
Project.
The acquisition by the company of the property; the obtaining of the consents
and the carrying out of any works required in order to obtain the consents; the
carrying out, management and completion of the building works; the granting of
leases in respect of the units or any of them; the sale of the company’s interest in
the units or any of them; such other matters as the shareholders shall agree from
time to time.
Project account.
The record of income and expenditure relating to the project.
Project expenses.
The total cost and expenses properly incurred or to be incurred by the company
(including all legal, surveyors and other professional and agents’ fees, taxes,
stamp duties and other fees properly payable) in connection with the
implementation and financing of the project, including but not limited to:
l The costs of the acquisition of the property, and the acquisition release or
modification of any rights, easements, restrictions affecting the same.
¡ The costs of obtaining consents.
¡ The costs of carrying out the building works.
¡ All finance charges.
¡ All publicity, marketing and other sales costs and expenses.
¡ All costs incurred by the company in maintaining and providing
services for the property and/or for the units.
¡ Any non-recoverable VAT, properly payable in relation to the above
items.
The above is not an exhaustive list of the definitions in the document from which my
example is taken, but are those which bear the most significance to the project
management responsibilities. The relevance of understanding the particular
meanings should be apparent. So too should be the breadth of the responsibility
consigned to the project manager.
11.2 The company

Objective
Self-explanatory perhaps, but nonetheless of considerable importance, as it provides
the driving aim for the project manager. The agreement should make clear the
objective of the company. In the unfortunate circumstance of a future disagreement
between the partners, the stated objective will be a steadfast rock to which the
project manager can take hold at a time when he is likely to come under pressure
from the respective partners.
The statement may bear close similarity to the company’s memorandum of

association; most certainly it should not be at odds with this or capable of differing
interpretation. It is worth checking.
Conduct of the company affairs

It pays to know the shareholding structure, voting rights, the authorised capital, and
matters requiring the consent of shareholders, such as raising funds. To take a simple
example, if the project manager foresees a cash shortage and a lack of authorised
funds, knowledge of the procedure and time to procure shareholder approval (which
may not be easily obtained) is of profound importance. This is likely to be stated in
the joint venture agreement but alternatively in the memorandum and articles of
association.
Board meetings, and the directors’ exercise of delegated powers, will probably have
direct influence on the project manager. He can expect to be their focus of attention,
and his attendance required at most meetings. Therefore, understand the basics.
First, the board meetings. How frequent are they, the venue, what constitutes a
quorum, what is the standard agenda, will a project management report (written or
verbal) be required on each occasion, what issues require a vote, how is a majority
declared, is there a casting vote?
Second, the directors. How are they appointed, whom do they represent, do they
have alternates, how many are there, do they have executive roles within the joint
venture?
These are all pertinent questions, because inevitably circumstances will occur where
prior consultation will be appropriate with certain directors and/or shareholders to
promote a decision towards the project manager ’s recommendations.
One essential distinction to understand is between decisions that lie within the remit
of the board, and those that require shareholder approval. Although the directors
may represent the shareholding interests, it does not follow that they automatically
have power vested in them to decide on shareholder issues.
Project management duties

If the project manager is acting in a consultancy capacity, it is probable that both his
duties and conditions of engagement will be recorded in a separate document.
Possibly (hopefully) this will be in the form published by the RICS, but alternatively
it will be one drafted by the solicitor to the joint venture company. However, where
project management is provided by one of the shareholding companies within the
joint venture, then the duties are likely to be set out within the joint venture
agreement. Because of this, and the affinity of the project manager with one of the
shareholding parties, it must be recognised that the terms may overtly express the
project manager’s responsibilities to ensure proper and fair dealing. This is
understandable and, indeed, even if not so prescribed, I would recommend the
project manager to demonstrably show consideration for all shareholders’ interests
throughout the development period.
I can illustrate this by an example.
On one occasion my company joint ventured an office building with a commercial

organisation whose intention it was to occupy for their new headquarters. Midway
through a 20 month programme, it was apparent that the four storey curtain wall let
in water in an alarming fashion. Interior walls quickly became soaked, and finishes
such as suspended ceilings could not continue. For our partner, the probability of
delayed occupation was alarming, as also were the financial ramifications for the
joint venture company which had to consider its rights and options under the
building contract in face of a nominated subcontractor who professed he could
remedy the problem.
As might be imagined, the issue was examined from every angle, and I reported
frequently and equivalently to the shareholding companies. By so doing, I am
convinced that when I ultimately decided to recommend removal of the existing
installation and appointment of a new specialist subcontractor, the response from
both shareholders was prompt and positive. Yet the implications were immense.
Putting to one side the long term possibility of legal or insurance recovery, the
partners had to finance a 20% increase in the building cost. Our partner had the
further expense of a twelve months ’ delay to occupation.
When set out in the joint venture agreement, it can be expected that the drafting of
the project management duties will be influenced by the relationship of the parties.
The duties may extend beyond the conventional horizons of project management.
This is underlined by the following resume taken from the document mentioned
earlier.
1. Negotiate the terms of appointment of the professional team.

2. Arrange the strategy for marketing and advertising.
3. Appoint agents to negotiate sales and lettings.
4. Appoint legal advisers to act for the company.
5. With the professional team, negotiate with all competent authorities for
obtaining consents.
6. With the professional team, recommend to the company the method of
construction procurement and thereafter proceed to obtain tenders for the
building works, in the manner decided by the company.
7. Carry out all company secretarial and accounting functions including:
i. Preparing and filing annual returns.
ii. Despatching notices of general meetings to shareholders and others in
accordance with the articles of association.
iii. Organising directors’ meetings including circulation of agenda and
recording of minutes.
iv. Providing a registered office facility.
v. Preparing statutory accounts.
vi. Liaising with the company’s auditors and bankers.
vii. Submitting VAT returns.
viii. Subject to board approval, submitting tax returns.
ix. Subject to board approval, supplying information to the company’s
bankers as required by any loan agreement.
x. Preparing and providing to the directors detailed cost statements and
progress reports for the project and financial statements, budgets and
cash flow forecasts for the company.
8. On behalf of the company, maintain a record (the project account) of
expenses, income or credit items.
9. Provide the company once a quarter with reports, including:
i. Cash flow projections.
ii. Cost and expenditure reports and projections.
iii. Sales and marketing reports.
iv. Status reports, including minutes of monthly site and progress
meetings.
v. Details on progress of negotiations with third parties being conducted
by the project manager.
vi. Other information which the project manager considers material.
10. The project manager shall notify the company of any immediate or
prospective material change in the building programme or cost of the project,
and shall not commit or incur any material liability on behalf of the company
except as previously authorised by the board.
I do not for an instant suggest this list is perfect. It has many inappropriate qualities,
not least the mixing of corporate and project obligations, the relative similarity of
certain duties and the absence of many relevant services, eg insurance. However, the
list illustrates how a hybrid document, drafted with many considerations in mind,
may not provide a routine brief. Nevertheless, the project manager must recognise
that the eyes of the shareholders are focused upon him and he must organise, direct
and implement accordingly.
Project management fee

If the project management duties are contained in the joint venture agreement, then
so too will be the fee. Although of obvious importance, suffice to say that I would
expect the project manager to satisfy himself on the two primary points:
1. That the amount or calculation of the fee is certain.

2. The manner and timing of payment(s).
Distributions, realisation and winding up

The significance of the corporate aspects of a joint venture agreement is underlined
when it is realised these may extend the project management involvement well
beyond the timescale associated with the building works. Consequently the project
manager would do well to review and consider the provisions of this part of the
agreement and reflect on the period over which his attendance will be needed, and
the terms relating to his fee!
12 Finance agreements
Finance agreements – the documents which govern the relationship between
developer and financier or funding institution – are typically similar in form to
development agreements. However, because of the Institution’s significant financial
commitment, it may be expected to demand a close involvement in the
administration of a project. On the principle that ‘he who pays the piper calls the
tune’, the project manager must acknowledge the need for the fund to be satisfied
that its money is being soundly invested; consequently, he should set out to reassure
the fund’s representatives by demonstrating a willingness to liaise and provide
information, provided that contractual responsibilities are not infringed.
The following items are likely to be affected beyond the guidance already given
under the heading of Development Agreements.
12.1 Approved drawings and specifications

Whether attached and/or listed in the finance agreement, or treated as documents to
be separately agreed and signed, the fund may require that, in addition to outline
floor plans and elevations, the ‘approved drawings’ should include other schematic
details (eg structural engineer’s general arrangement drawings, routes of main
services, lighting and power diagrams).
The bills of quantity are likely to be included, as may also the performance
specifications to be issued to specialist subcontractors for elements such as windows,
lifts, etc.
Some funds employ in-house technical staff; others – probably the majority –
appoint professional consultants to check drawings, specifications, etc on their
behalf. The project manager must arrange for the transfer of information from the
developer ’s consultants to the fund’s representatives; he should also ensure that,
whilst the fund’s representative may seek to clarify details by direct contact with the
developer ’s consultants, any matters on which the fund’s representatives are not
satisfied are formally reported to the project manager.
It occasionally happens that the fund’s representative is unwilling to approve a

consultant’s design detail. The project manager has then to determine whether this is
a matter of differing design philosophy between two specialists, as can often be the
case, or whether there is a serious flaw in the consultant’s proposal. The project
manager must be prepared to make the final judgement, but it is vital he remembers
and safeguards the principle whereby it is the developer ’s consultants who carry the
long term design responsibility; consequently, a design method urged by the fund’s
consultant cannot be accepted without the developer’s consultants being prepared to
adopt it as their own. Looked at in the alternative, will the fund’s consultant
guarantee the design detail to the developer? In my experience the answer to that
question has always been ‘No’, and the issue recedes from view.
12.2 Working drawings, services installation drawings, etc
Working drawings, services installation drawings etc are not usually included in
those documents which are to be formally signed and exchanged. However, there is
often a clause in the finance agreement requiring copies of all consultants’ drawings,
specifications etc to be passed to the fund’s representatives. Again the principles of
comment and approval should apply as above.
12.3 Consultants’ appointments

It is common, and indeed advisable, for the names of the developer ’s consultants and
the fund’s consultants/technical representatives to be stated.
Fund’s consultants’ fees

Any fees to be paid to the fund’s consultants are usually treated as part of the total
finance facility and should therefore be stipulated. They are in effect a cost that has
to be serviced by the developer. Certainty is therefore important.
Collateral warranty
An obligation on the developer requiring that he ensure the consultants provide a
warranty to the fund is a virtual certainty. Earlier mention (see Development
Agreements) was made of the standard form published by the British Property
Federation which was drafted for just this circumstance. It is recommended that the
project manager urge this to be the form adopted if the style is either not specified or
left uncertain by the draft wording of the finance agreement. Do not wait until the
finance agreement is signed before tackling this issue, and in any event give early
warning and information to the consultants. (See Appendix A, Clause 4.2.)
Similar warranty or assignment provisions are often required in relation to the

contractor. It is vital that the project manager ensures this is stated in tender or other
building contract invitation documents so that contractors allow for the risk in their
submissions.

The fund may demand the right of approval to the detailed terms of the building
contract. The project manager should seek to have the relevant clause of the finance
agreement qualified so that the fund’s approval ‘shall not be unreasonably withheld’.
The fund’s right of interference in the terms or administration of the building

contract must be treated with the same caution as mentioned under
Development/Building Agreements. It is the developer and his consultants who have
contractual responsibilities under the building contract and these should not be
fettered by conflicting or prejudicial obligations in the finance agreement.
The project manager must, however, appreciate the financial investment being made
by the fund, and the consequent demand for reassurance and protection under the
terms of the building contract. In the author’s opinion this is normally best achieved
by adopting traditional and conventional forms of building contract.
The terms and operation of such building contracts are understood by funds and their
lawyers, and are also frequently supported by case law. Specially created hybrid
forms of building contract produced by the developer ’s lawyers will invite
investigation and potentially lengthy interference by the financier ’s lawyers. This
will likely result in inordinate time being spent on an issue which with few
exceptions is just as well served by traditional forms.
12.5 Deleterious building materials

The finance agreement usually stipulates that the developer shall not use certain
named building materials such as high alumina cement, blue asbestos, and calcium
chloride. Unfortunately there have been many instances of lawyers drafting very
long lists with perhaps thirty or more items. I often doubt whether the origin or
reason for each one has been understood, and my own sceptical suspicion is that
many lawyers simply convert the last longest list they saw presented by another
lawyer on a different project. If this occurs, I urge the project manager to argue
fiercely for a much restricted and authoritative list. The British Property Federation
warranty, although having given the option for items to be added, identifies five
items only. When pressed, I have usually found lawyers and their clients are willing
to accept just these. Once agreed, the project manager should obtain written
assurance from the consultants that no such materials will be used.

Minutes
Consistent with the attitude of submitting information commensurate with the fund’s
interest, the project manager should provide the fund and/or its consultants with
minutes of site meetings and other progress meetings. This may have to be accepted
as a specific obligation under the finance agreement.
Architect’s instructions and variation orders

Institutions are sometimes insistent that they or their consultants should receive
copies of the architect’s instructions and variation orders, in which event the project
manager should arrange that these be supplied via his own office, giving the
opportunity for any explanatory comment to be added.
Cash flow statements

It is common practice, and sometimes a term of the finance agreement, that the
developer provides regular cash flow forecasts eg quarterly. These should be
prepared by the project manager and embrace all headings of development outlay,
with information concerning the building cost, based on advice from the quantity
surveyor and/or contractor.
Certification approval
If demanded by the fund, their representatives must be permitted to inspect the
quantity surveyor’s books of account and valuation assessments, but they should not
have the right to prohibit the issue of valuations or architect’s certificates. If the
fund’s representatives are dissatisfied with the developer’s consultants’ performance,
they should register this with the fund, which in turn should notify the
developer/project manager.
The fund may instruct a quantity surveyor representative to counter-authorise each

certificate which the developer/project manager submits to the fund for payment or
reimbursement. This underlines the need for the project manager to ensure that a
working relationship is established between respective consultants, as the developer
(client) will not be pleased by any delay or financial embarrassment caused by the
prolonged payment procedure.
12.7 Development outlay/developer’s calldown

The headings for development outlay are usually similar to those given under
Development Agreements.
To optimise the developer’s cash flow, the project manager should institute
arrangements whereby, on receipt of the architect’s certificates, fee invoices etc,
copies are forwarded immediately to the fund for payment to the developer. In some
instances the fund will accept the quantity surveyor’s valuation notice, which usually
precedes the architect’s certificate by a few days; this gives more time for the
procedures to take place before the developer is obliged to honour the certificate to
the contractor. The project manager should attend to these arrangements and in so
doing should consider the appropriate period to be inserted in the building contract
for honouring certificates.
Typical complications may be that the fund for its own administrative reasons insists
on paying calldowns on one fixed day of each month, or that there may be only one
calldown per month, or that the aggregate amount of any calldown must not be less
than a minimum amount, say £10,000. The project manager may seek to overcome
these considerations, either by negotiation with the fund when the finance agreement
is in draft form, or by instituting appropriate timing arrangements within his team,
most obviously by working back to the date in each month when the valuation must
be issued. The project manager should particularly consider, in relation to the value
of the development project, whether the sum stipulated as a minimum calldown limit
is appropriate.

The principles should be as set out under Development Agreements. The issue of the
fund’s completion certificate is likely to trigger the capitalisation date for the project,
which has a direct influence on the developer ’s financial reward. The project
manager should therefore ensure a positive liaison with the fund’s representatives in
the period leading up to the developer’s request for the completion certificate, in
addition to any specific arrangements set down in the finance agreement.
Where financial calculations flow from the issue of the completion certificate the
project manager should arrange for data and assessments to be compiled and
submitted for agreement by the fund.
12.9 Tenants
Leases
The funding institution will often demand right of approval to each tenant and
respective occupation leases. The project manager should establish whether the
standard draft form of occupation lease is to be produced by the developer ’s or the
fund’s solicitor, but in either event should ensure that the other parties’ approval to
the text is subsequently obtained.
Approval procedure
If a development is likely to have a multitude of tenants (eg a shopping centre) the
project manager should institute a standard procedure for obtaining the fund’s
approval to the principles of each letting (eg covenant, rent, trade, etc). A simple
device is to record the information on a pro-forma such as that shown in Appendix
B3 which can be circulated and signed by both developer and fund.
12.10 Record drawings and manuals

Even if not formally required by the finance agreement, the project manager should
as a matter of good practice provide the fund with copies of as-built record drawings
and maintenance manuals. Increasingly, however, funds are stipulating their
requirements, which are often extensive, including items such as copy negatives of
drawings and equipment warranties or guarantees.
The project manager must instruct the consultants accordingly. Frequently the fund
sets a time limit, which the project manager should check is realistic.
The project manager should emphasise to the consultants that material supplied
under this heading is in addition to that also to be provided to the developer (client)
on completion.
12.11 Finance provisions

To ensure he is conversant with the interpretation of the finance calculations stated
in the agreement, the project manager should prepare a trial viability study as soon
as practicable following issue of the draft agreement. This should convey to him the
significance of any subsequent variation: for example, increase or decrease in
development costs, advancement or delay of rent flow, early or later completion of
the building contact, and increase or decrease in rental income. Although this is the
last guidance of this section, I am inclined to think it is also the most important. The
implications of change directly affect the developer (client’s) reward and the project
manager’s strategy.
12.12 Reflection
A moment’s reflection will, I hope, convey to the reader the importance of close
attention to the terms and implementation of partnership agreements. It is essential to
each agreement in its own right, it is vital when there are two or more running
parallel on the same project. Two or more partners each with their own consultants
checking on the developer’s team, each with their own rights of inspection, each
with a completion certificate arrangement, and so on. Strong discipline, founded on
properly formed contract clauses, has to be maintained.
The project manager is at the centre, and it is his task.

Procedures
Contents
13. Design and specification
13.1 Surveys and investigation
13.2 The site
13.3 Services
13.4 Development studies
13.5 Building envelope
13.6 Structural frame
13.7 Architecture
13.8 Mechanical and electrical services
13.9 Prefabrication
13.10 Design accreditation
14. Construction (Design and Management) Regulations 1994 (CDM)

14.1 Health and Safety
14.2 Planning supervisor
14.3 Designers
14.4 Principal contractors
14.5 Client’s agent
14.6 Implementation
14.7 Health and Safety Plan
14.8 Health and Safety File
14.9 Miscellaneous
14.10 CDM Briefing Note – Brecher
15. Statutory approvals

15.1 Planning permission (Town and Country Planning Act 1971)
15.2 Building Regulation approval
16. Statutory powers and agreements
17. Rights over land – easements
18. Insurance
19. Specialist subcontractors

19.1 Architect’s recommendation
19.2 Performance specification
19.3 Selection vetting
19.4 Performance bonds/corporate guarantees
19.5 Design warranty
19.6 Record drawings, guarantees, cleaning and maintenance
20. The building contract

20.1 Contract choice
20.2 Contract documents
20.3 Tender/Negotiation
20.4 Advance preparation
20.6 Completion
20.7 Claims
(Continued)
21. Tenants – leasing and occupation

21.1 Agreement for lease
21.2 Fitting out – implementation
22. Commissioning and management transfer

22.1 Management officer
22.2 Management systems
22.4 Record drawings, warranties, guarantees and product literature
22.5 Centre manager
22.6 Service charge
23. Monitoring and administration

23.1 Programme
23.2 Team directory
23.3 Organisation chart
23.4 Site personnel
23.5 Legal agreements
23.6 Administration
23.7 Architect’s instructions and variation orders
23.8 Finance
23.9 Computers and word processors
13 Design and specification

Although expert and qualified consultants may be appointed, the project manager
has a vital role to perform in administering and controlling the designs and
specifications of a development. It is the project manager’s function to draw
together, define and instruct the client’s brief, and at all times to keep these criteria
under review until a development is complete. It is also his role to optimise the
client’s budget, ensure essential base information is obtained, direct relationships
with third parties and, most importantly, be satisfied with the long term integrity of
each development’s structure, services, fabric and function. In practice there will be
other related overlapping matters which will influence final solutions; considerations
such as planning permission and tenant interest. For clarity these are treated
separately within other chapters.
13.1 Surveys and investigation
Information is the lifeblood of all teams. The better its quality and definition, the
more certain the consultants’ advice and response. This is especially so when
developing design solutions; for example judgement of the optimum level at which
to sit a building on a sloping site can have considerable effect on the amount of cut
and fill, and consequential impact on the client’s budget.
Consequently, always in the mind of the project manager should be the nagging
question of the enquiries that could be made sooner rather than later, to assist the
team and serve the client. Prompt the thought; do not wait for the consultants to
suggest. In terms of type and timing, surveys and investigations may be considered
in three categories: the site, services, and development studies.
13.2 The site

Ground investigation for contamination and foundation design
In the UK, concern about contamination of land as a result of previous use has been
fostered by government proposals for legislation, including a statutory register of
contaminated land, plus probable legal and financial responsibilities on those owning
or acquiring land. As a result – and although legislation has yet to be enacted –
clients and their partners (and not least their solicitors and valuers) are now very
wary of development on land that may be chemically tainted or undermined.
Superficially the past history of a site may not be apparent. The project manager may
obtain some guidance by investigation of title deeds, old maps or the local authority
(see also BRE 318 and 322), but the only certain approach is to instruct a ground
investigation and sample analysis from a specialist laboratory.
Dependent on the status of the client’s involvement at the time, this can either be
done as a discreet investigation or combined with the investigation and analysis for
foundation design. Due account should be taken of the preparation time needed to
determine the areas and number of investigations on the site (usually advised by the
structural engineer), the period required for obtaining tenders from specialist
companies, and the anticipated time required for carrying out the works, together
with subsequent laboratory analysis and reports.
The project manager should anticipate arrangements necessary to probe past

physical obstructions within the site, permissions for access, subsequent
reinstatement, and other possible hindrances that may be revealed by inspection.
Dimensions and levels – topographical

This is essential for certainty that the conceptual design can be accommodated on the
site as intended. The architect or the structural engineer may be the consultant
through whom the undertaking of survey work is arranged. The consultant may
possess the expertise in-house or, alternatively, wish to appoint a specialist firm
which he will brief.
Buildings: structural survey, condition survey, measured survey, asbestos

survey
Appropriate where existing buildings on the site are to be retained and/or
refurbished. Little beneficial design work can be produced by the consultants until
reliable information on structural condition and dimensions has been obtained. The
project manager should treat with caution design and cost evaluations provided in
advance of survey information being available.
Asbestos survey. In the UK, the use and/or removal of asbestos based products is
strictly controlled. It may be treated or removed only by specialist contractors who
are statutorily licensed. Their work is carried out under carefully controlled
circumstances.
Asbestos has been used in numerous building materials, but especially those
associated with insulation and fire protection. The likelihood of its presence should
be considered with the consultants, and if thought possible, a specialist survey
instructed. An assessment of how and when it is to be treated, and the cost involved,
can then be made.
Boundaries
The ownership and condition of all site boundaries should be established. Consider
whether works will be necessary to protect (eg rendering exposed party walls) or to
maintain (eg underpinning) boundary features and whether notification to and/or
agreement is required with adjoining owners or third parties (see under Third Party
Rights).
13.3 Services
Existing
l Drainage
l Water
l Electricity
l Gas
l Telecommunications.
Direct inquiries to the statutory authorities and/or utility companies respectively

responsible. It is essential to establish the capacity, route and importance of services
passing through or adjacent to the subject site. Determine the need to stop up, divert
or replace any such services, or take special protective measures. (For example,
piling next to the hotline from London to Washington, as once happened to me!)
Query also whether the service company will insist on undertaking such works
themselves. Where large distribution mains are involved, the service companies may
insist on the work being carried out at a certain time of the year; hence the need to
coordinate this into the development programme.
Service companies sometimes demand a financial contribution to the capital cost of

the works. In this situation, the project manager should ascertain the extent to which
the service company has taken into account revenue which will be received as a
direct consequence of the development.
New services
Service companies sometimes demand that new mains are sized in excess of those
required solely by the development; this may be as a result of a modernisation
programme or as a facility for potential development beyond the subject site. The
project manager should obviously direct negotiations towards ensuring that the
client’s financial contribution is calculated according only to the needs of his
development.
In the UK, and as a consequence of powers included in privatisation legislation,

service companies (notably water) may levy an infrastructure charge in addition to
the cost of the physical connection works. The infrastructure charge can be a
substantial sum and the project manager should ensure that it is properly identified
so that due allowance is included in the client’s budget. As it is in effect a premium
payment, the infrastructure charge may be paid direct by the client and not through
the building contract, thus avoiding unnecessary accrual of contractors’ on-costs, or
consultants’ fees.
The project manager should identify the connection point for the development’s
main service feeds and consider whether these are appropriate to the development.
13.4 Development studies

l Wind
l Daylight
l Noise
l Vibration.
These studies are concerned with the relationship between a development and its
external environment. There are others, more usually associated with the
consultants’ response to the brief, such as energy analysis. These are better
considered with the design discipline review which follows later, eg services.
A building’s shape, its mass, its height and its relationship to adjacent buildings can,
as we have all experienced, create strange and discomfiting wind forces.
These are unpleasant both for the public at large and the regular occupants of a
development. With the aid of local climatology records, a specialist study can be
conducted replicating prevailing wind forces. From this, the degree and form of any
turbulence can be forecast. Where it is desirable to reduce the forces, the effect of
changes to the building profile can be simulated.
Similarly, daylight studies. For some developments it is considered important to

assess the degree of sunlight that will be received, or shadows cast. This can be
analysed by computer model, giving data based on all daylight hours and all seasons
of the year. This will reveal the effect for each face of a building, including shadow
cast by nearby buildings, and the effect on adjacent open space. The information is
particularly beneficial when evaluating building performance, eg the prospects of
glare, heat gain, and differential thermal movement in the building fabric.
In certain locations noise can be a potential major intrusion. Transport routes, eg

major highways, railways and flight paths, are obvious providers of significant
continuous or intermittent sound. If this is of concern, a specialist study can factually
determine ambient noise levels from which objective decisions can be taken. Where
considered necessary the degree of acoustic insulation to be incorporated in the
building envelope can then be ascertained.
Vibration may be the least frequent of the studies but where applicable is extremely
important. Typically such studies have been necessary when buildings are located
over major transport routes such as railways. These can induce significant vibration
through a building structure. A study will help define the degree of the problem and
assist the structural engineer in designing the solution.
13.5 Building envelope

A primary concern of the project manager for every development must be that the
consultants’ designs for the building envelope (roof, walls, floor, basements) will
provide effective and long-term protection from the elements, without the need for
excessive repair or maintenance. Although the importance of this must be
emphasised, the criteria needed will not inhibit the expertise of competent
consultants to produce creative conceptual designs.
The project manager should, however, keep firmly in mind that traditional materials
and designs (eg pitched roofs) have a proven record; designs that seem complex
even at the concept stage are likely only to increase the prospect of novel and untried
solutions at the detailed design stage. These should be rigorously avoided. The
following are issues to which attention is particularly recommended.
Flat roofs
Flat roofs are notoriously prone to failure. The project manager should carefully
study drawings showing the proposed falls, checking that there is a consistent logic
to the angles and direction flow arrows shown on the drawings; also that the
drainage gullies are correctly located and in sufficient number. These criteria apply
even where the architect proposes what is termed in the UK an ‘inverted roof’, ie
with the insulation lying over the waterproof membrane.
For all types of flat roof the project manager should check that adequate falls are
achieved, wherever possible in excess of the minimum standards laid down by
building codes of practice. The principle behind this is that if a leak should occur,
damage will be minimised if water is encouraged to drain away immediately to the
outlets provided.
The practical effect of designing only to minimum standards is that falls are often so
slight that any lack of accuracy during construction may result in ponding or outlet
gullies being proud of the adjacent roof area. A roof which is partly covered with
water will be subject to differential stress as it heats and cools during the daily cycle.
Surface water drainage

From roofs (whatever their type) to the site outfall, the project manager should check
drawings for the passage, routes and quality of the disposal system. Are there
sufficient gullies? Are the downpipes accessible in case of blockage? Do the
‘horizontal falls’ sufficiently incline? Remember, water is the most insistent of the
elements. Tracing and resolving water ingress after development completion is often
difficult, frustrating and expensive. Prevention is far better, cheaper and less
aggravating. I recall a small but pertinent anecdote, borrowed from an architect
friend who trained in Cape Town; his professor one day pointed upwards to the level
of the local water table – the top of Table Mountain.
Flashings, trays, damp-proof membranes, foundations and basements

As project manager, check drawings and specifications. Be satisfied that all water
barriers are clearly defined and aptly chosen. If in any doubt, seek verification from
the consultants and/or product manufacturers, the latter being particularly pertinent
where proprietary materials are intended.
Weather tests for materials

Wherever the choice of materials for the building envelope results in joints being
formed on the exterior face of the building, serious consideration must be paid to the
need for rain and wind pressure tests to verify and/or support the choice of joint
detail. This may be as between materials of similar kind (eg adjacent pre-cast
concrete spandrel panels), between differing materials (eg granite cladding and
aluminium window frames), or for a specialist manufacturer ’s component system (eg
curtain walling). The range of tests can include:
l Works test . Usually appropriate to component systems. Reputable

manufacturers normally have test rigs at their works and can simulate a range
of weather conditions to varying degrees of severity. Manufacturers will also
usually volunteer that their system complies with nationally identified
standards, or similar. All well and good, but if reliance is being placed on
such statements, be satisfied that you understand the terms of the standard,
and more particularly that the system, as being purchased for the subject
development, is not being changed or adapted to suit the design brief.
l Independent laboratory . Testing stations such as the Building Research

Establishment (in the UK), universities, and certain private organisations,
offer facilities for testing sample combinations of materials with jointing
systems in the form proposed for on-site construction.
l On-site test . As a final safeguard, and to be recommended, the contractor

and/or specialist subcontractor can be instructed to conduct on-site water tests
under conditions established by consultants. Although jointing principles or
component systems may have previously satisfied works or independent
laboratory tests, materials can still prove fallible to poor on-site workmanship.
Hence site tests act as a final efficiency check and also as a yardstick of on-
site quality.
The project manager should direct the consultants to define testing requirements in
contract specifications, bills of quantity and specialist performance specifications.
Thus the requirement is clearly stipulated at tender stage.
13.6 Structural frame

The viability of alternative forms of structural frame should be reviewed early in the
design programme. The principal alternatives may be summarised as:
l In-situ reinforced concrete

l Pre-cast concrete
l Steel.
Each of these can be produced with different design subtleties and it may be the
project manager’s task to secure the optimum solution for each development
(depending on his or her terms of engagement).
The choice of frame cannot be viewed in isolation; the effect of each alternative on
other design, construction and in-use functions must be considered. Primary
headings for review could be:
l Programme
1. Pre-construction
2. In construction
l Cost
1. Unit cost
2. Building cost
3. Development cost
l Material
1. Availability
2. Alternative sources of supply
l Frame
1. Structural grid
2. Floor slab profile
3. Floor loadings
l Flexibility for change

1. In construction
2. After completion
l Fixings for other components, finishes and services
l Fire protection/cladding
l Pre-fabrication
1. Off site
2. Deliveries
3. On-site temporary storage
l Inclement weather
1. Effect on progress of works
l Owner’s insurance.
Although a generalisation, the following example may help. The lead time for steel
is often such that an order for mill production and fabrication must be placed many
weeks before the start of construction; it may therefore also precede the main
contract tender and/or the appointment of the contractor. The order will require an
often significant financial commitment by the client. Not only does this have cash
flow implications but it also has to be considered in the context of what happens if
the result of the main contract tender is unsatisfactory or, for some other reason, the
client decides to abort or defer the start date, or change the design concept – eg a
major tenant withdraws just before signing an agreement.
Structural steel is produced to precise dimensions. It therefore imposes a similarly

rigorous demand for design certainty, prior to the date of the steel order, on those
components, finishes and services which are to be fixed, hung or routed through it.
The project manager must assess, many weeks in advance, whether the design
programme will enable this degree of certainty to be achieved in time.
Unit cost comparisons between the three structural forms will vary according to
economic times and the specific building design. The comparison should go further,
however; to take account of related costs, such as fire cladding, floor slab
construction, fixings for other components, overall construction programme times,
and contractors’ on-costs (eg attendances, cranes etc) to provide a building cost
comparison. Development costs might vary yet again because of difference in the
cash flow profile and finance charges over the programme period.
There are also risk factors to be added into the equation, such as the effect on site
production of extreme cold, wind or rain, or strikes which affect the supply of
structural materials.
Industrial disputes or resource shortages may have a significant effect upon the
supply of structural steel in a country, and this could lead to a preference for
reinforced concrete, providing bar steel can be obtained from inside or outside that
country.
13.7 Architecture
The project manager should review drawings and specifications at every stage in the
evolution of design. Further, and this is equally true of the other design disciplines,
he should expect to comment and advise (or instruct if his brief permits) where
necessary. Conventionally, and in the language of the RIBA, design evolution
progresses through concept, scheme design, detailed design and production
information: four stages in all. In practice the step from one stage to the next is
rarely precise. Nevertheless, the project manager should be alert to and guard against
any one area of design, or a particular discipline, forging ahead if it is at risk from
related or adjacent design which is not at a comparable stage, eg detailing a
suspended ceiling before the lighting units have been selected.
The project manager is the client’s watchdog. In addition to checking that the
information on drawings and specification reflects the brief, he should also continue
to think positively and creatively. Much that the consultants produce, the architect in
particular, is an interpretation of the brief. Not every solution, be it concept or detail,
is the only effective way of responding to the brief. The project manager should
encourage the consultant’s freedom of thought within the context of achieving the
brief.
From philosophy to fact: the design review may be considered in two parts –
development function and materials and components.
Development function
The project manager should instruct and review design in the sum of its parts, eg the
dealing room in a broker ’s office, the service area within a shopping centre, the
changing facilities in a leisure centre, the security system in a hospital. The
judgements will be derived from understanding the client’s attitude and, hopefully,
criteria set out in the client’s brief. The project manager should form his own
opinion, directing the consultants on changes and refinements to a point where he is
happy to present to the client, or directly confirm (if he has the authority) a specific
proposal or alternative and/or options.
The judgement criteria will vary according to the client’s need or expectation, but as
a guide to evaluation I suggest the following:
l Design appearance. Style, quality, materials, colour.
l Function. Suitability in use, durability, maintenance, dimensions.

l Cost . Total building cost (with significant elements individually itemised)

and comparison to budget, running cost, maintenance cost and replacement
cost as applicable.
l Construction. Ease, complexity.
l Statutory approvals . Planning permission (where relevant) – the likelihood

of approval. Building Regulations – compliance, need for waivers.
Materials and components

A natural progression from development function, but scaled to focus on detail and
production drawings; also specifications.
l Quality . The quality of every material and component should be considered

by reference to appearance, function, durability and cost in use, although
relative importance will vary according to the item. For example, for external
cladding, durability and appearance will be significant, whilst cost in use is
likely to be minimal. For mechanical plant, appearance would count for very
little, but both durability and cost in use would be important.
l Availability. The project manager must be assured that materials and

components are in ready supply both in number and timing. Lead time for
orders, fabrication and delivery should be examined. For items originating
abroad, transportation method and time can be significant. Due allowance
must also be given for tendering and approval of drawings, including co-
ordination, which precede a final instruction.
l Standard design . Wherever possible the project manager should seek design
specifications which are capable of competitive tender, and building elements
which do not require special manufacture or are unique to one producer.
l Replacement. Design detail and choice of components should have regard to

the prospect of securing adequate replacement in the future, where life span is
known to be limited, and the ease of installing such replacements.
l Guarantees . The project manager should identify the guarantees available for
respective products and ensure that these are furnished on completion.
Guarantees should be distinguished from contractual responsibilities created
under any employer/subcontractor warranty form, or the defects clause
provisions of the building contract.
l Maintenance . Regard should be had to frequency and character of, and

access for, maintenance. For certain products the specialist supply company
may offer a maintenance service contract; tender invitations can require that
each subcontractor should submit a sample maintenance agreement, with
figures, with tender quotations.

This is the central nervous system of many developments and frequently the most
misunderstood. Dissatisfaction is often expressed by owners and occupiers after
completion because systems do not function as fully as, or with the flexibility that
had been anticipated. The faults can be traced to a variety or combination of sources,
but typically can include inadequate explanation of the brief to the engineering
consultant, the consultant’s own failure to appreciate all the features of importance
to the client, divided design responsibility between consultant and installation
subcontractor, inadequate commissioning, inappropriate daily operation by the
occupiers’ personnel, and poor maintenance.
From the outset of design, therefore, the project manager must make clear the
demands of the brief, although this itself may require evaluations of alternative
concepts before final instructions can be given.
M & E services cover a host of facilities, some essential, others optional. ACE
Agreement 4A contains a non-exclusive list of 42 items, starting with acoustical
design and treatment, and ending with window cleaning trolleys. The range is wide
and in the modern era of computerisation potentially very sophisticated.
Evaluation of the design response must be rooted in the brief, eg assessment of the
lighting proposals will differ from that for fire protection and alarms. The project
manager must compile his judgement criteria and be prepared to consider or initiate
options. Simply as an indication, the assessment of alternative air conditioning
systems might comprise:
l Capital cost.
l Energy cost . This includes review of energy conservation options which must
in turn be considered in conjunction with other building components, eg solar
control glass.
l Plant. Location and size. Access for and frequency of maintenance.
l Ducts. Sizes and routes
l Special use requirements, eg computer suite, restaurant, conference room.
l Partitioning . Flexibility for dividing the occupied space and/or moving

diffusers and extracts to suit.
l Control mechanism , eg switching arranged on a floor by floor basis, or as

individual suites such as a computer room, or by respective cellular offices.
l Temperature . Control range relative to external temperatures.
l Future capacity . Facility to add on, or increase loads eg extra cooling for
possible future conference facility.
Importantly the project manager must be prepared to question, constantly having

regard to the client’s objectives/brief and the practical effect of the services
proposals. Thus for lighting it should be automatic to review the diagrammatic
layout plans, looking at the location of each light relative to the likely manner of
occupation in that area (eg proximity of daylight, potential partitioning etc); also the
location of switches, number of lights operated per switch, and facility for individual
light control. These issues may be influenced by industry trends and perceptions. For
offices in the UK traditional lighting levels of 500 lux are often perceived by
occupiers as too bright in areas populated by monitor screens, resulting in glare. 350
lux is regarded as more compatible, yet this does not conform to conventional
specification standards required by funding institutions. The attitude of the funds
may change, but meanwhile the project manager is obliged to exercise judgement,
no doubt in an instance such as this, following due consultation with the client.
13.9 Prefabrication
There is an increasing tendency in building design and construction to opt for
components which are manufactured and assembled off-site. Benefits cited for this
approach are improved production quality, less programme disruption as a result of
inclement weather or on-site disputes, and reduced construction periods because of
fewer sequential trades and reduction of on-site wet trades which require time for
curing. These last also add to the weight and cost of the building fabric due to the
moisture content.
The project manager should do his utmost to ensure, however, that the team
recognise the demands imposed by fabrication. They include the following:
l Substantial pre-planning and rigorous adherence to the overall concept and

detailed design proposals; exacting tolerances have to be observed.
l Careful programming of the building contract to ensure that all units can be
taken into the building and moved to their final position (eg the lifting,
moving and placement of entire bathroom units).
l Sensible detailing, which properly facilitates the insertion of a pre-fabricated
component into its precise on-site location.
Consideration for dovetailing the adjacent building fabric, finishes, and
connection of services, including access for this to be achieved after the
prefabricated component is in position.
l The manufacturer ’s production capacity, and ability to supply at the time, in
the order and quantity needed for on-site installation.
13.10 Design accreditation

National House Building Council
The NHBC sets technical standards applicable to the design of all forms of housing.
Drawings must be submitted for approval and NHBC staff also carry out spot checks
through construction. On satisfactory building completion the NHBC provides two
years insurance cover against defects due to faulty workmanship on materials and
from the third to tenth year the house purchaser is protected against loss due to major
structural damage. To secure NHBC accreditation the client must be accepted on to
the NHBC register (including payment of an annual membership fee), prior to the
drawing approval stage; the contractor must also be registered before
commencement on site. Should a ‘qualifying’ defect occur, the NHBC guarantees
the repair will be carried out at no cost to the purchaser.
(NB: The NHBC may also, if requested, provide independent certification of

compliance with Building Regulations. This is an alternative to an application to the
Building Control Department of the local authority. The project manager should
keep in mind that the NHBC certification is purely an alternative option and
distinguish this from the technical accreditation, with its subsequent insurance
safeguard for purchasers, mentioned above.)
Building Research Establishment Environmental Assessment Method

BREEAM is a method of assessing the environmental quality of buildings. It is
administered by the Building Research Establishment (a specialist agency of the
Department of the Environment). The environmental consequences of a range of
building characteristics are assessed at the design stage and the conclusions of the
assessment are reported in the form of a certificate which confirms the
environmental criteria that the building design has satisfied. The design is assessed
under the following primary headings:
l Global issues and use of resources

1. Carbon dioxide emissions
2. Acid rain
3. Ozone depletion
4. Natural resources and recycled materials
5. Storage of recyclable materials
l Local issues
1. Legionnaires ’ disease
2. Local wind effects
3. Noise
4. Overshadowing of other buildings and land
5. Water economy
6. Ecological value of the site
7. Cyclists’ facilities
l Indoor issues
1. Legionnaires ’ disease
2. Ventilation, passive smoking and humidity
3. Hazardous materials
4. Lighting
5. Thermal comfort and overheating
6. Indoor noise
One objective of the BREEAM assessment is to encourage environmental

improvements to be incorporated before the design is fixed. Details of the
assessment considerations are contained in reports published by BREEAM for each
of the five development titles for which accreditation is presently offered. They are:
l New superstores and supermarkets

l New homes
l New industrial units
l Existing offices
l New office designs.
A charge is payable for the assessment which is in part determined by the size and/or
complexity of the building.
The project manager should do his utmost to ensure that an early decision is taken on
whether design accreditation such as the above is to be sought. Preferably this
should be decided at the time of the client’s brief. Information on the accreditation
approach should then be sought from the agency, and its requirements fully
confirmed to the team. To gain maximum benefit, the accreditation process should
be woven into and be identifiable upon the development programme.
14 Construction (Design and Management)

Regulations 1994 (CDM)
14.1 Health and Safety
Health and safety is now on the development agenda in the UK, as a consequence of
the Construction (Design and Management) Regulations 1994 (CDM), which took
effect at 31 March 1995. This places a statutory responsibility on the client,
designers and contractor(s) and consequently demands the attention of the project
manager. The nature of the statutory obligations makes them a suitable candidate for
a project record – see Appendix D1.
There are three main themes to CDM:
1. That in relation to any construction project – which according to CDM

includes demolition, new build, refurbishment and maintenance – those
who design and construct have relevant health and safety competence
and resources.
2. That a health and safety evaluation must be present in all design, and that
all construction must be preceded by a complementary contractor’s method
statement. In combination, the evaluation and method statement comprises
what CDM defines as the Health & Safety Plan.
3. For each completed contract, a permanent record is maintained by the

client of the design and construction – the Health & Safety File. This must in
future be shown to others who maintain or carry out work on the property so
that they in turn can appreciate and address health and safety issues. The
Health & Safety File must also be passed on to any party who in future
acquires the client’s interest.
CDM also introduces a new member to the development team: the planning
supervisor. The planning supervisor has two main responsibilities:
1. To ensure that the designer’s and principal contractor’s pre-contract

responsibilities are performed.
2. To prepare the Health & Safety Plan which is delivered to the principal
contractor, and at completion of construction to compile the Health & Safety
File and deliver this to the client.
The above is intended only as a contextual description for what follows in relation to
the considerations for project management. A clause-by-clause recitation of CDM is
not provided. If required, there is no better start for the reader than the publication by
the Health & Safety Commission, Managing Construction for Health & Safety –
Approved Code of Practice.
14.2 Planning supervisor

Who to appoint? The client (project manager) is required by CDM to appoint an
individual or organisation who has the appropriate competence and resources.
The project manager (NB: see ‘Client’s agent’ – Section 14.5 – below) is usually
instrumental in the selection of the planning supervisor. If so, the following is worth
considering prior to checking competency and resources:
1 Meeting the client’s needs
a. Matching the business requirements.

Does the client have an in-house design/construction expertise. If not he may
be best suited by the appointment of a planning supervisor with a broad
industry understanding, eg terms and conditions of consultant appointments,
different procurement systems, warranties etc, to be able to put the CDM
obligation into context when reporting to the client.
b. Perhaps the client’s business is of a specialist character, such as
manufacturing, education or leisure. This may place demands and constraints
on the design and construct functions. If so, it will be advisable that the
planning supervisor has relevant experience, and is able to prompt and
contribute to the overall team effort.
2 Continuity
a. Some clients have considerable estate ownerships and/or development

programmes. This prompts two considerations:
i. Application of a consistent corporate policy in matters such as building
function, security, procurement of specialist components etc – and their
consequences for health and safety.
ii. Consistency in the style of the Health & Safety File(s).
b. Consequently the choice of planning supervisor should perhaps take into

account the benefit to the client’s business of a consistent policy towards
meeting and interpreting the obligations of CDM; an appointment based on a
retainer principle may be appropriate.
3 Independence
a. Many design practices and construction companies offer the role of planning
supervisor in addition to their traditional function. Except for small or modest
projects, or perhaps those with an exceptional degree of specialisation, I
suggest the following arguments favour independence;
i. To provide an independent judgement upon the designer’s solutions.
ii. To better ensure a balanced assessment of issues which straddle two or
more of the design disciplines.
iii. To avoid political or personality pressures that can arise within a
consultant or contractor organisation when it performs a multi-headed
function.
4 The project specifics
a. Willingness to speculate. For a project which is likely to have an extended

feasibility or lead-in period, will the planning supervisor be willing to act on a
speculative basis through the early stages, as is usually the case with
designers?
b. Use, size and complexity
i. Use. If a project has a particular bias, there is obvious relevance to

selecting a planning supervisor with associated expertise, eg an
engineer for an oil platform, a building surveyor for an historic
building.
ii. Size. The planning supervisor should have experience of, and be from
a practice which typically deals with, the scale of project being
considered. The issues which arise, and the selection of other
consultants and the principal contractor, will all reflect this criterion. I
M Pei would not be considered an appropriate architect for a church
hall in a small town, any more than a small provincial practice would
be considered as architects for the Canary Wharf tower. The planning
supervisor must be able to work on the same level as other members of
the team, and command equivalent respect.
iii. Complexity. This may derive from various aspects of the
development, such as function of the building, phasing of the works, or
site conditions, eg tunnelling for a new railway. The planning
supervisor must understand the constraints and be able to temper the
Health & Safety Plan to suit.
c. Working with the team. It is essential that the planning supervisor has the
right attitude and is not disruptive. A happy team invariably produces a good
product. A recognition of the issues and responsibilities which generally face
the members of the team, and an interpretive approach to CDM is important.
d. Appointment, fees and warranties
i. Appointment. Whilst CDM has invented the role of planning

supervisor it has failed to recognise the preoccupation of the
development industry with focusing on formal definition of
responsibilities. In the resultant void, those who offer the service of
planning supervisor have presented their own suggested styles of
appointment. This has been followed by the ACE and RIBA with their
respective recommended forms, and there will no doubt be others. In
time, it is hoped there will be consensus, but for the present the project
manager should consider carefully the terms of any particular proposal.
My suggestion would be to have regard to the issues discussed
elsewhere in this guide in relation to the project manager ’s own
appointment and that of the consultants. In particular, I suggest that
appointments which attempt to spell out in detail the services of the
planning supervisor should be regarded with suspicion. Unless they are
a verbatim extraction from CDM, there is potentially a mismatch or
gap between the appointment and the CDM requirement. My own
preference is simply a statement which confirms that the planning
supervisor will provide all the services required by the CDM – simple
and to the point.
ii. Fees. Whilst it is desirable to reach agreement on fees at the time of the
initial appointment this will be difficult in most cases because the
design of the project, its programme and procurement systems etc will
be barely defined, if at all. The response from planning supervisors is
likely to be a time rate. This is fraught with danger for the project
manager wishing to properly control the development budget. The
solution is likely to lie in a compromise approach – working to interim
fixed limits initially and then converting to an aggregate lump sum
when the project is reasonably defined.
iii. Warranties. Funding institutions, purchasers and tenants may be
expected to require warranties from the planning supervisor, in the
same way as they are required of consultants and contractors.
Therefore check that the planning supervisor agrees, and his insurers
also! The BPF warranty (see ‘Finance Agreement’ and ‘Consultant
Appointments’) is capable of simple adaptation for this purpose and,
assuming it is used for the other members of the team, has the benefit
of keeping it in a consistent style.
5 Insurance
In addition to professional indemnity cover, the CDM brings the added implication
that responsibility may be owed to a third party, eg member of the public or tenant
employee, if an accident should occur which can be in some way linked to the
actions of the planning supervisor. Confirmation of public liability insurance is
therefore required.
CDM requires the client (project manager) – or a client’s agent if appointed (see
below) – to be satisfied on the competence and resources of the planning supervisor.
In the Approved Code of Practice it is said that ‘reasonable enquiries only are
required’, and that the Regulations ‘. . . do not assume that those making
appointments, or engaging designers, planning supervisors or contractors, will be
familiar with all the aspects of the functions of the person they are engaging’. The
competency and resource enquiry form in Appendix D2 incorporates the questions
which the ACOP suggests might be made, plus other points mentioned above.
Dealing with the CDM obligation in this manner (together with the project record –
Appendix D1) provides a documentary record to demonstrate compliance.
14.3 Designers
The competency and resource requirement is similar to that for the planning
supervisor. For the project manager, however, it means taking account of this at the
time of original selection of the consultants, even at the earliest feasibility stage.
Often, the project manager is appointed some time later than this, in which event he
will need to check and/or arrange very quickly for the competency and resource
enquiry to be issued to those consultants (typically the architect and quantity
surveyor) already selected by the client. It is worth noting that the CDM obligation
to make the enquiry is upon the person arranging for the ‘. . . designer to prepare a
design . . .’ and similarly for the principal contractor. Consequently and according to
circumstance it could be judged that this is a responsibility which falls to the project
manager.
Appendix D3 provides a sample Competency and Resource Enquiry proforma, again

incorporating questions suggested by the ACOP.
14.4 Principal contractors

Whilst the Competency and Resource Enquiry could be issued with a tender
invitation, it will perhaps more often be prudent to deal with this as part of the
general assessment of contractors prior to forming a tender list. Unfortunately the
ACOP does not support this, because it says that the judgement of competency and
resources should be based on ‘. . . how the construction phase will be managed so as
to implement the Health & Safety Plan. The Health & Safety Plan is likely to be
issued with the tender enquiry. Nevertheless I do not see this as a bar to compliance
with CDM. The contractor is not permitted to start construction until he has
produced a satisfactory development of the Health & Safety Plan (see below) and I
think this is adequate safeguard for the client (project manager). Appendix D4
provides a suggested proforma enquiry for the contractor.
14.5 Client’s agent

CDM permits the client to delegate his responsibilities to a client’s agent. This could
be an independent party, but if a project manager is appointed he would seem to be
an ideal candidate. CDM requires a competence (not resources) enquiry to be made,
hence the reference in the project record.
14.6 Implementation
Features of CDM which require the project manager’s particular attention appear on
the second page of Appendix D1, and may be summarised as follows:
Notification to the Health and Safety Executive (local office).
1. Appointment of client’s agent. CDM specifies the information required, in

what is termed a ‘declaration’. The HSE must formally confirm receipt.
2. Notification of project. This must be given by the planning supervisor.
I suggest the project manager (and client) should have copies of both the above
notifications, hence the reference on the project record.
14.7 Health and Safety Plan

This comprises the health and safety evaluation prepared by the designers, and must
be compiled by the planning supervisor and provided to the principal contractor ‘. . .
before arrangements are made for the contractor to carry out or manage construction
work’. In practice this means at or before the construction tender. To assist
designers, many planning supervisors provide proforma risk assessments, which the
designers then complete with the particular design information for the project. This
is an aid to uniform interpretation by the various members of the design team. The
contractor must develop the Health & Safety Plan before construction starts, at least
to the point where procedures and arrangements for the generality of the
construction phase are identified, and for the specifics of the early work packages.
This must be approved by the client albeit on the advice of a professional advisor
(project manager?) or planning supervisor.
14.8 Health and Safety File

This is the final task of the planning supervisor. The file comprises a design and
construction record of the particular project, which must in future be made available
by the client (or his successor in title) to all who subsequently carry out work on the
building on his behalf, eg for maintenance. No time limit is specified for the delivery
of the Health & Safety File but it clearly is desirable that the project manager give it
due attention as practical completion approaches, by checking with designers and the
principal contractor that they are assembling the final information required by the
planning supervisor.
14.9 Miscellaneous
Client information
CDM requires the client to provide a planning supervisor with information he may
have about the state or condition of the premises at which the work is to be carried
out, and which is relevant to the function of the planning supervisor. It is an
obligation of which the client might not be aware, but which is consistent with the
responsibilities of the project manager. As time passes it is expected that Health &
Safety Files for previous works at a building will be amassed, and will in effect form
a substantial part of the information required by the planning supervisor.
Inspection of Health and Safety File

In the words of CDM, ‘Every client shall . . . ensure that the information in any
Health & Safety File . . . is kept available for inspection by any person who may
need information for the purpose of complying with the requirements and
prohibitions imposed on him by or under the relevant statutory provision . . .’.
Also ‘A client who disposes of his entire interest . . . (shall deliver) . . . the Health &
Safety File to the person who acquires his interest . . . and ensure such a person is
aware of the nature and purpose of the Health & Safety File’. These obligations
make it important for the location of the Health & Safety File (or various copies of
it) within the client’s organisation to be clearly identified. The Health & Safety Files
for any future or subsequent works ought also to be added so that there is a clear
record through time. It is a matter which the project manager should bring to the
client’s attention, and promote agreement on a corporate policy which is understood
by those with responsibilities in the client’s organisation.
It may be prudent for one copy of the Health & Safety File to be held with the title
documents of the property. However, this may not be convenient for those
administering maintenance contracts or an ongoing programme of works. They
would need their own copies. The project manager should therefore establish the
number of copies required and their distribution within the client’s organisation.
There is a further consideration where a building owned by a client is in multi-

occupation. Whilst the client’s responsibility in respect of his own works is apparent
from CDM, it is less defined in respect of works which tenants or others might carry
out (being clients in their own right). There is a strong argument to suggest that the
client should be supplied with a copy of the Health & Safety File received by any
tenant. This can be regulated through lease terms or licences approving works, but
requires a pro-active approach to management. It is a subject which the project
manager should anticipate, and bring to his client’s attention.
14.10 CDM Briefing Note – Brecher

See below
Briefing Note
The Construction (Design and

Management) Regulations 1994
1. Introduction
l Where work is being carried out by domestic
The Construction (Design and Management) householders, CDM will not apply, so long as the
Regulations 1994 (“CDM ”) were placed before residence is not being used in connection with a
Parliament on 10th January 1995 and, subject to trade or business. However, the requirements on
transitional provisions, are effective from 31st March designers and for the project to be notified will
1995. apply.
CDM gives a new prominence to health and safety in l If there is any doubt as to whether CDM applies,
construction projects. The Regulations apply to most you should contact your nearest HSE area office.
construction projects and everyone associated with
them. Those involved in projects must now rethink (b) Construction Work
their approach to ensure that health and safety issues
This term has been widely defined by CDM. It means
are properly taken into account from the outset and
any building and engineering work and includes:
then co-ordinated and effectively managed throughout
the construction process. l site clearance, investigation and excavation and
foundation work,
Defined roles of planning supervisor and principal
contractor have been created and the client is under a l new build and commissioning,
specific duty to ensure that these are duly appointed
for each project. He is under a further duty to ensure l conversion, alterations or fitting out,
that they, and any designer also appointed, are
sufficiently competent and resourced to enable the l renovation and repair,
project to be carried out with regard to health and
l dismantling and demolition,
safety. The main duties placed upon the client, the
planning supervisor, the principal contractor and the l upkeep and maintenance,
designer are set out in summary form in Table A.
l assembly of prefabricated elements to form a
The task of policing CDM is given to the Health & structure or disassembly of the same,
Safety Executive (“HSE ”). There are various
sanctions for breaches of CDM, including in certain l cleaning work where this involves high pressure
circumstances unlimited fines. It is important that systems or corrosive or toxic substances, or
those involved in the construction industry understand involves cleaning windows or translucent walls or
what they need to do under CDM in order to discharge roofs where there is a danger of falling more than
their duties. two metres,
To act as a guide, HSE is due shortly to publish an l installation, maintenance and removal of
Approved Code of Practice (“ ACOP”). The ACOP mechanical and electrical, telecommunications or
will give detailed guidance on, for example, what computer equipment which is normally fixed to a
needs to be included in the health and safety plan and structure; the installation of compressed air or
ultimately in the health and safety file. other gases, and
This Briefing Note is a short guide to CDM and l the installation, commissioning or demolition of
comments briefly on its impact and effect, looking at manufacturing plant where there is a possibility of
the duties and obligations imposed by it and how it is falling more than two metres.
likely to affect standard construction documentation.
(c) The Client
2. How CDM operates
Client for the purposes of CDM means any person for
(a) When does CDM apply? whom a project which includes construction work is
carried out, whether by a third party or in -house.
l CDM will generally apply to construction work
which is notifiable, ie lasts for more than 30 days There can be more than one client for any particular
or will involve more than 500 person days of project. Where there are a number of clients, they are
work. at liberty to elect one of their number, or his agent, to
take the legal responsibilities imposed by CDM on
l CDM also applies to non -notifiable work which behalf of them all.
involves five people or more on site at any one
time. Where a project is being constructed by a developer
for the benefit of a private client who will occupy the
l Where demolition or dismantling works are building as his residence, the developer is treated as a
taking place, CDM applies regardless of the client and not the future occupier.
length of time or the number of workers.
l CDM will apply to any design work no matter

how long the work lasts and how many workers
are involved on site.
This Briefing Note has been prepared by Kevin J Greene, a construction law partner in the firm
of Messrs Nicholson Graham & Jones incorporating Brecher & Co
Briefing Note
The point to recognise is that CDM places positive l to be able to give adequate advice to a client and
duties on the client in making the key appointments contractor so that they can satisfy themselves that
and in setting the scene for the way in which health anyone appointed to prepare designs is competent
and safety is managed throughout the project. A client to do so and has allocated adequate resources to
may need to seek professional help to do this but comply with their obligations as designer under
CDM seeks to ensure that the planning supervisor is CDM,
there to advise him and that designers take steps to tell
him about their duties. l to advise the client that a health and safety plan
has been prepared, before construction starts on
Generally the duties of the client are: site. The client and the contractor should request
l to consider whether CDM applies and whether he his advice in time to avoid delays to the project,
is in fact a client for the purposes of the l to be able to give adequate advice to a client to
Regulations, satisfy himself that a contractor has the
l to appoint a planning supervisor and a principal competence to carry out or manage the
contractor and to ensure the competence of such construction work and has allocated adequate
appointees and that adequate resources for health resources in order to comply with CDM. Clients
and safety have been, or will be, allocated by will probably wish to seek advice from their
them and to have regard to the timing of the planning supervisor about the party or person to
appointments, be chosen as principal contractor and whether this
can be the main contractor. This will form part of
l to ensure that the planning supervisor has been the tender process
supplied with all information relevant to his
l to give notice of the project to the HSE,
functions under CDM,
l to ensure that so far as is reasonably practicable a l to ensure that a health and safety file is prepared,
health and safety plan has been prepared before l to review and if necessary to amend the health and
the construction phase commences (Please see safety file as necessary as work proceeds on site,
further below under ‘The Health and Safety and
Plan ’),
l to deliver the health and safety file to the client on
l to ensure that the health and safety file is kept completion of the construction project.
available for inspection (Please see further below
under ‘The Health and Safety File’), and (e) The Designer
l to be satisfied that designers and contractors are Designers play a key role in construction projects. A
also competent and will allocate adequate designer is defined within CDM as
resources.
“any person who carries on a trade, business or
The client must be able to show that he has taken other undertaking in connection with which he –
reasonable steps to satisfy himself as to the
competence and adequate resourcing of his appointees a. prepares a design, or
at the time of appointment. The ACOP draft
guidelines suggest that “reasonable enquiries” only are b. arranges for any person under his control
required. For what might be regarded as “reasonable (including, where he is an employer, any
enquiries ”, please refer to Table B. employee of his) to prepare a design,
Note – The client may appoint the same person as relating to a structure or part of a structure ”.
planning supervisor and as principal contractor,
Design includes the preparation of specifications and
provided that person is competent to carry out the bills of quantities: it is not limited to drawings.
functions of each required under CDM. The client Therefore, quantity surveyors are treated as designers
may even appoint himself as planning supervisor or for the purposes of CDM. Project managers are also
principal contractor or both, again provided that he is likely to come within the ambit of “designer”. A client
competent to perform the relevant functions. could also find that he is a designer, if he imposes on
(d) The Planning Supervisor the design team his own design parameters or where
part of the design is carried out in -house.
There are, at least at present, no specific qualifications
for a planning supervisor. A number of professional The main duties of a designer under CDM are:
consultants may offer to perform such a role. l to prepare his design only after taking reasonable
The main duties of the planning supervisor under steps to alert the client of his duties under CDM,
CDM are: l to consider the safety needs of those on site and
l to ensure that the design of the structure has those who will be affected by works on site. The
adequate regard to avoiding foreseeable risks to designer’s duties towards these categories of
those carrying out construction work or cleaning people are to have adequate regard to the need:
work and those who may well be affected by such
work being carried out (eg passers-by),
l to take reasonable steps to ensure co -operation

between designers so that they comply with
CDM,
Briefing Note
l to avoid foreseeable risks to their health and

safety, l details of risk to the health and safety of workers, as
far as is possible to know them,
l to combat at source risks to their health and
safety, and l information required by potential principal
contractors illustrating the competence and
l to give priority to measures which will protect all resources of those involved in the project, and,
persons rather than each person individually.
l sufficent information to assist the preparation of the
For example, if refurbishment work is ongoing on health and safety plan for the construction phase.
premises whilst people are still working there, the
welfare of such persons must be considered to ensure For the construction phase, the plan should include:
that the design includes adequate information about l the arrangements for ensuring the health and the
any aspect of the project or structure or materials
safety of all persons affected by the construction
which might affect them.
work,
l to co-operate with the planning supervisor and
l details as to how health and safety is to be managed
with any other designer (including subcontractor
during the construction phase and how compliance
designers) in order to enable all of them to
with health and safety legislation is to be monitored,
comply with statutory requirements.
ie. rules for site operations,
In carrying out their functions under CDM, designers l information about welfare arrangements, eg. health
are only required to take the above factors into hazards associated with materials which cannot be
account to the extent that it is reasonable to expect the avoided, and
designer to address them at the time the design is l procedures for dealing with subsequent design and
prepared and to the extent it is otherwise reasonably
changes.
practicable to do so.
(h) The Health and Safety File
(f) The Principal Contractor
The client must keep a health and safety file and is to
The principal contractor has to take over and develop
take reasonable steps to ensure that it is kept available
the health and safety plan and co -ordinate the
for inspection.
activities of all contractors so that they comply with
health and safety law. The health and safety file is not the same as the health
and safety plan. The file is a record of onformation for
The main duties of the principal contractor are:
the client/end -user, which tells those who might be
l to ensure that the other contractors (ie. sub- responsible for the structure in future of the risks that
contractors) comply with their obligations on have to be managed during maintenance, repair or
health and safety matters, renovation. It should contain information about health
and safety factors affecting the building and
l to ensure co-ordination and co-operation between information about materials and techniques used in
sub -contractors, construction. The planning supervisor has to ensure
that it is prepared as the project progresses and that it
l to keep the health and safety plan updated during is given to the client when the project is complete.
the course of the project,
Once the planning supervisor is satisfied that the
l to ensure compliance with the health and safety health and safety file fulfils the requirements of CDM,
plan at all times, he should then deliver the health and safety file to the
client for safekeeping.
l to display a copy of the notification of the project
to the HSE, and The format of the health and safety file is not specified
but it should be in such a form which makes it easy for
l to provide the planning supervisor with
the client to store securely and which makes the
information he requires for the health and safety
information it contains easy to retrieve. The client has
file.
to make it available to those who will work on any
(g) The Health and Safety Plan future design, building, maintenance or demolition of
the structure. Where the structure is multi -tenanted, we
The planning supervisor appointed must ensure that a would suggest that the file is kept by the freeholder
health and safety plan in respect of the project has who makes it available to tenants as and when
been prepared before the construction phase required. The health and safety file is to be passed on
commences. The client can seek necessary advice to any subsequent purchasers of the building and,
from the planning supervisor as to the adequacy of the therefore, needs to be securely kept.
health and safety plan. It will be submitted, in most
instances, to the principal contractor at tender stage. 3. Alterations to construction documentation
Once appointed, it is the principal contractor ’s
In respect of new projects, consideration should be
responsibility to develop the health and safety plan given to the amendment of standard documentation.
and to keep it up -to -date.
Most building contracts require the main contractor to
In the pre-tender phase, the plan should include: comply with statutory requirements which will include
CDM. We belive that, in any event, it would be
l a general description of the construction work, sensible for the contractor and for the design team to
be reminded in their contracts and appointments of
l the timescale for completion of the work (in any their obligations in respect of CDM, by express
intermediate stages), reference to the Regulations.
Briefing Note
Table C sets out certain general points which we

suggest should be considered. The points listed are not However, care should be taken if a project is likely
intended to be exhaustive and each project must be to over-run into 1996. We would suggest that, in
considered on its own merits. any event, developer clients put CDM into practice
on their projects so that they become aware of the
4. Transitional provisions Regulations and how they should be implemented.
It will be necessary to assess each project against each l Health and Safety Plan: The requirement that the
of the transitional provisions, to establish which of the client should satisfy himself that there is a health
Regulations will apply and at what stage. and safety plan prepared before work starts on site
will not apply to any project where the construction
l The Planning Supervisor: This appointment phase starts before 1st August 1995.
should be made as soon as the client has enough
information about the project and is committed to l Client ’s obligation to provide information to
it. In practice, the planning supervisor should be designers: The client’s obligation to provide
appointed early on in the life of a project. information relevant to health and safety will not
apply to any project where work has started on site
If on 31st March 1995 the time for appointing a before 31st March 1995.
planning supervisor for a project has already
passed, he should be appointed as soon as l Start of project design: If the design of a project has
practicable after that date. already commenced before 31st March 1995, the
Regulations relating to design will not apply until
l The Principal Contractor: The time for 1st August 1995. If, on 1st August 1995, practical
appointing a principal contractor is as soon as the completion has not been achieved, there will be an
client has enough information about potential obligation on designers to design for safety, as
contractors to assess whether the proposed main provided for by CDM. If there is any possibility that
contractor has the competence to carry out the practical completion will not be achieved by 1st
construction work and will allocate adequate August 1995, it is important for designers to review
resources. their design now, to see what (if any) design
changes are required.
If the appointment of the main contractor has
already been made by 31st March 1995, his 5. Conclusion
appointment as principal contractor should also
be made as soon as practicable, assuming that he It is essential that clients, professionals and contractors
is competent to act as principal contractor. are aware of, and comply with, the statutory
obligations and liabilities placed upon each of them by
l Work on site: Where construction work has CDM if they are to avoid the penalties.
already started on site by 31st March 1995, the
planning supervisor and principal contractor do Particular attention should be given to the appointment
not have to be appointed until 1st January 1996. and engagement of a planning supervisor and a
Thus, for example, where a project is commenced principal contractor and to the terms of such
on 20th March 1995 and is planned to be appointments and engagements. Amendments may be
completed by 21st July 1995, there will be no required to many types of construction documents
need to appoint a planning supervisor or principal including standard forms of building contracts and
contractor. professional consultants ’ appointments.
This Briefing Note is only intended as a general guide to the new Regulations and, on any specific issue,
professional advice should be sought.
For Further Information

If you wish to discuss any aspects of the Regulations
either generally or in the context of a particular transaction, please contact
Kevin Greene or Simon Hall of our Construction Unit.
Brecher & Co,

78 Brook Street,
London W1Y 2AD
Tel: 0171 493 5141
Fax: 0171 493 6255
© Spring 1995 Brecher & Co. All rights reserved

TABLE A
SUMMARY OF THE KEY DUTIES OF THE CLIENT, PLANNING SUPERVISOR,

PRINCIPAL CONTRACTOR AND DESIGNER
Client Planning Supervisor
l to select and appoint a competent l to co-ordinate the health and safety

planning supervisor and principal aspects of project design and the
contractor initial planning
l to be satisfied that the planning l to ensure that a health and safety
supervisor and principal contractor plan for the project is prepared
are competent and will allocate before a principal contractor is
adequate resources for health and employed
safety l to take reasonable steps to ensure
l to be satisfied that designers and co -operation between designers, for
contractors are also competent and the purposes of health and safety
will allocate adequate resources l to assist with enquiries concerning
when making arrangements for them the principal contractor and designer
to work on the project and to advise on the health and
l to provide the planning supervisor safety plan before the construction
with information relevant to health phase commences
and safety on the project l to notify the project to the HSE
l to ensure construction work does l to ensure that the health and safety
not start until the principal file is prepared and delivered to the
contractor has prepared a client at the end of the project
satisfactory health and safety plan
l to ensure the health and safety file
is available for inspection, after the
project is completed
Principal Contractor Designer
l to develop and implement the health l to alert clients to their duties

and safety plan l to consider during the development
l to arrange for competent and of designs the hazards and risks
adequately resourced contractors which may arise to those
to carry out the work where it is constructing and maintaining the
subcontracted structure
l to ensure the co-ordination and co- l to design to avoid risks to health
operation of contractors and safety so far as is reasonably
l to obtain from contractors the practicable
main findings of their risk l to reduce risks at source if
assessments and details of how avoidance is not possible
they intend to carry out high risk l to consider measures which will
operations protect all workers if neither
l to ensure that contractors have avoidance nor reduction to a safe
information about risks on site level is possible
l to ensure that the workers on site l to ensure that the design includes
have been given adequate training adequate information on health and
l to ensure that contractors and safety
workers comply with any site rules l to pass this information on to the
which may have been set out in the planning supervisor so that it can be
health and safety plan included in the health and safety
l to monitor health and safety plan and ensure that it is given on
performance drawings or in specifications etc
l to ensure that all workers are l to co-operate with the planning
properly informed and consulted supervisor and where necessary
l to make sure only authorised other designers involved in the
people are allowed onto the site project
l to display the notification of the
project to HSE
l to pass information to the planning
supervisor for the health and safety
file
NB: The information in this Table has been taken from HSE Booklet C500 PML 54.
TABLE B
SUGGESTED ENQUIRIES TO BE MADE BY THE CLIENT

IN THE APPOINTMENT OF RELEVANT PERSONNEL
Planning Supervisor l the manner people are to be employed to
ensure compliance with health and safety
l his knowledge of construction practice law
l the technical and managerial approach
relevant to the project
l his familiarity with and knowledge of for dealing with the risks specified in the
design function health and safety legislation
l his knowledge of health and safety
issues, particularly in preparing health Designer
and safety plans
l his ability to work with and co-ordinate
l his knowledge, ability and resources
activities of different designers l his familiarity with construction
l the number, experience and processes and the impact of design on
qualifications of people to be employed, health and safety
internally and from other sources l his awareness of relevant health and
l the management systems to be used
safety legislation and appropriate risk
l the time to be allowed to carry out the
assessment methods
different duties l his health and safety policies
l the technical facilities available to aid
l the personnel to be employed to carry
staff in carrying out duties out the work, their skills and training
(this may include external resources
Principal Contractor where necessary and review of the
design)
l the time to be allocated to fulfil the
l the personnel to carry out or manage the
various elements of the designer’s work
work, their skills, knowledge, experience l the technical facilities available
and training l the method of communicating design
l the time to be allocated to complete
decisions and information on any
various stages of the construction work
remaining risks
without risks to health and safety
TABLE C
CONSIDERATIONS AND SUGGESTED AMENDMENTS
CONCERNING CONSTRUCTION DOCUMENTATION
Planning Supervisor Principal Contractor
In Appointment:
l health and safety plan should be
l written confirmation that the planning sufficiently developed to form part of
supervisor tender documentation or similar
¡ understands his role and is proposals
prepared to perform it l consider whether standard form building
¡ is aware of and will comply with contracts should be amended specifically
CDM to include principal contractor’s
l a warranty that the planning supervisor acknowledgement that he is aware of and
has and will maintain the necessary will comply with CDM
competence and resources l certain specific duties to be spelt out in
l certain specific services to be itemised contract – eg maintenance of health and
separately – eg advice on whether health safety plan
and safety plan has been prepared in
accordance with CDM Designer
l consider fee structure In Appointment:
l consider rights of termination (eg if
principal contractor can take over role of
planning supervisor) l consider whether obligation should be
l make duties clear included that designers are aware of and
l consider if reasonable skill and care is will comply with CDM
sufficient l consider services to be provided, eg co-
l consider copyright. It is vital that the operation with the planning supervisor
client has the ability to obtain rapid and other designers
delivery of the health and safety plan and l consider whether collateral warranties
the health and safety file normally given by designers need to be
l check that professional indemnity altered to include express reference to
insurance extends to role of planning compliance with CDM
supervisor
l consider whether collateral warranties
are needed for various interested parties,
eg funders, purchasers and/or tenants and
if so the form of such warranties
15 Statutory approvals
Government or Regional Authority regulations governing development, whilst
rooted in the respective laws and custom of each country or state, can nevertheless
be viewed in the context that they are usually intended to control:
l Land use
l Aesthetic quality
l Design standards
l Construction standards.
The project manager therefore requires an understanding of the laws or regulations

which will apply, the authorities that exercise control and approval, and the manner
in which the authorities carry out their duties. All this is likely to have a critical
effect on the speed with which a development can be planned, designed and built,
and most particularly will influence the extent of financial commitment a project
manager may recommend to his client during the formative or speculative stage.
In the UK the formal mechanism is embodied in Acts of Parliament, of which there

are two distinct series:
l The Town and Country Planning Acts – the first of which in 1947 established
the framework which survives today, despite subsequent Planning Acts which
have modernised or extended the system – contain the procedure for gaining
approval to land or building use, and for consent to building mass and
appearance. Note: They are currently under review – see Section 16.
l The Building Acts control detail design standards and matters such as
structure, thermal insulation, public health, fire control and escape. They also
require on-site official inspection during construction as a check on building
standards.
Both the Planning and Building Acts are administered by local Councils but with the
distinction that elected Members make the primary planning decisions, albeit
advised by their officers, whilst assessment and approval under the Building Acts are
made by the officers. In both instances, however, there is a right of appeal for the
applicant, which is scrutinised and determined by central government.
The notes which follow are necessarily founded upon the system operating in the
UK, but are indicative of the considerations necessary under any sovereign
legislation.
15.1 Planning permission (Town and Country Planning

Act 1971)
Local planning authority
Presuming the need for planning permission has been established, the project
manager should clarify who is the determining authority and, for the project under
consideration, the extent to which other authorities must be consulted or have power
of determination on strategic or specific grounds (eg highways).
Type of application
Although planning permissions are commonly described as outline, detailed, or full,
the amount of information for an application under any heading will vary according
to the attitudes of individual Planning Officers and the importance of, or sensitivity
toward, a particular development. It may of course suit the client’s interest to furnish
limited or qualified information at a particular stage, and it is often possible by
agreement with the Planning Officer to arrange that information on specific aspects
will be submitted subsequent to the principal permission being granted; in the
interim the permission is issued with appropriate conditions or reservations attached.
Typical instances are the submission of samples of finishing materials, or
landscaping details.
Application documents
Usually the architect will establish (but the project manager should check) the
quantity and quality of information required by the Planning Office. The project
manager should vet all the application documents before submission, including the
written responses on the application form itself. Planning permission attaches to
land. It is not normally personal and therefore the application need not necessarily be
made by the client; the architect, project manager or vendor are equally suitable
alternatives according to circumstance, but any agency should be disclosed. It is also
vital to identify the official notices that have to be served or published and ensure the
correct timescales for these are observed. Guidance is usually contained in notes
issued by the Planning Authority accompanying the blank planning application
forms.
Illustrative materials
The project manager should consider (usually including informal consultation with
the Planning Officer and architect) whether it would be appropriate to provide
illustrative material such as a model, perspectives, aerial photograph or written
description which, although not forming part of the formal application, would help
Officers and Members of the Council to appreciate better and gain confidence in the
client’s proposals. Much, however, will depend on the approval procedures.
Approval procedure
Prior to submission, the project manager should ascertain the likely timescale for
official consideration of the planning application and the probable date(s) at which it
will be heard by committee and thereafter given full Council approval. Once an
application is complete, a decision is required to be given within two months, in
default of which an appeal may be filed.
In the determination of applications the local planning authority is legally required to
take the development plan and any other material consideration into account. With
the former, the local plan and unitary development plan (UDP) are the most
important, as they are the ones which identify sites. Other material considerations
can include previous decisions on the site, car parking requirements, the effects on
neighbours and many more.
The development plan is the most important consideration when determining
applications. If a proposal is in accordance with it there will be a presumption in
favour of the application. If it is not, the presumption will be towards a refusal.
Use Classes: Town and Country Planning (Use Classes) Order 1987
When seeking planning permission, the project manager should take care that the
permission sought is ascribed to the correct Use Class Order, or combination thereof
in the case of a hybrid development. This is of particular importance to the
investment value of the completed project and to the ability of tenants or occupiers
to dispose of their interest in the open market. The Order gives a certain freedom of
use within the Classes.
The description of the permitted use is most important when dealing with industrial
and warehouse estates where it may be difficult to anticipate the full range of
activities that will be carried on by tenants. Unless the permitted use stated in the
permission is sufficiently broad, it may be found some proposed lettings will be
prejudiced because the trade process of the tenant(s) does not fully comply.
Another phenomenon is the growth of business, science and industrial parks, where
the client will require considerable flexibility to meet the requirements of tenants
whose business may, in varying proportions, comprise warehouse, manufacturing,
assembly, research and development, computer suite, offices, canteen, etc. The
category B1 in the 1987 order makes it possible for change of use between offices
and light industry and vice versa without planning permission. In such instances the
use described on the application is best first discussed informally with the planning
authority. Some are more flexible than others. Lengthy developments carried out in
phases should be given special consideration for their planning time limits.
Grant of permission
On grant of permission the project manager should:
1. Pass the original of the consent to the client and/or his solicitor for
safekeeping with other title documents.
2. Note the expiry date of the permission and the date(s) by which details
pursuant to that permission have to be submitted, or by which works should
start and whether they require any further action to be taken.
3. Review any/all conditions attached to the permission and decide if these are
reasonable and acceptable.
Refusal of permission/appeal against conditions

Where this situation arises the project manager will review with the consultants and
client the overall strategy to be adopted and in so doing he should clearly establish:
1. The date by which the appeal has to be made (six months from refusal or
deemed refusal).
2. Grounds for appeal (eg the Planning Authority’s decision is ultra vires or the
grounds for refusal of imposition of conditions are unreasonable).
3. Conduct of the appeal (eg written submission, public inquiry, informal
hearing, appointment of advocate).
4. The cost and time implications of the alternative appeal procedures and the
chances of success.
5. Alternative means of overcoming refusal (eg submission of fresh application
with compromise amendments).
Listed Building Consent

Where a planning application is submitted which embraces in whole or part a listed
(protected) building (notwithstanding that the element containing the listed content
is untouched by the redevelopment), then application for Listed Building Consent
must be made at the same time. Public notices must be issued as part of the
application procedure, details of which, plus the relevant forms, are contained in the
guidance notes issued by the planning authority. As a matter of strategy, the project
manager will have to determine the extent to which consultation with the
conservationist organisations is prudent prior to, or during, the application
procedure.
If permission is granted by the local planning authority, the Secretary of State for the
Environment (in England) may, if he wishes, call in the application (especially if
there have been a number of objections) for review at a Public Inquiry. In that event
the project manager must determine the nature and number of expert witnesses who
should be called on to argue the client’s case, taking expert guidance as necessary on
their selection and appointment.
Until Listed Building Consent is granted, it is a criminal offence to demolish
property.
Planning fees
Fees payable on application for planning permission are governed by the Town and
Country Planning (Fees for Applications and Deemed Applications) Regulations.
These are periodically reviewed and changed by the Department of the Environment.
15.2 Building Regulation approval

The determination of an application for Building Regulation approval is essentially a
matter of fact, although the rules and regulations may differ between certain types of
authority and be influenced by local by-laws.
The process is in two parts, plans and inspection, and the building inspector will
issue a consent document for each. Whilst it is preferable to secure the plans consent
document before start of construction, this is often impracticable because detailed
design by the consultants continues long after building has commenced. It is
common practice between consultants and the building inspector to acknowledge the
reality of this situation and to allow consultants to ‘feed’ the application as
information is produced from their offices.
If this is the procedure adopted, the project manager must assure himself that there is
a good relationship and understanding between consultants and the building
inspector. The formal application must be submitted (usually by the architect)
substantially in advance of the contract start, and, on the ‘feed’ process, information
for any part of the works must be submitted to the building inspector reasonably in
advance of that same element being constructed on site. Thus there is time for any
queries by the building inspector to be cleared informally prior to the works being
started.
Ideally a full Building Regulation application should be made, and consent received,
before start of construction, but the implications of this on the overall pre- and post -
contract programme should be carefully reviewed by the project manager to
determine if this is consistent with the most effective overall conduct of the project
and its letting.
The inspection consent follows the building inspector’s periodic visits to site and his
satisfaction that the works to which the regulations relate, and for which plans
consent has been given, have been properly constructed.
Fire Officer
The Fire Officer ’s approval to matters such as means of escape, smoke extraction
and fire protection systems is secured through the formal Building Regulation
application, ie the Building Inspector’s office, but informal direct consultation is
usually possible. Although operating within the Building Regulation Codes of
Practice, the fire officer’s powers of interpretation are significant and very often a
matter of individual Brigade Officers’ discretion. It is advisable for the project
manager to ensure that the consultants obtain an early and clear understanding of the
Fire Officer’s attitudes, as these can have a substantial influence on concept and
schematic design, and also costs (eg sprinkler installation).
Waiver
Where designs for the project do not comply with strict interpretation of the Building
Regulations but are nonetheless considered satisfactory by the consultants because
of other factors, application for a waiver may be made as part of the Building
Regulation application. Until waiver consent is received, the client is at risk in
allowing detailed design or construction to continue, but waivers are a common
procedure and the project manager should therefore be able to evaluate the degree of
risk with guidance from the consultants.
Consent document
The original of the Building Regulation approval form should be supplied to the
client and/or his solicitor to be placed with other title documents for the project.
Building Regulation fees

The fees payable are governed by The Building (Prescribed Fees) Regulations and in
respect of all work, other than domestic, are paid according to a scale of charges
(Table 4) based on 70% of the estimated building cost. The fee is paid in two stages,
the first on application for plans and calculations approval, and the second (75% of
the total fee) as and when site inspections occur. The project manager should be
clear whether the inspection fee is to be included in the main contractor’s
responsibilities.
The following are extracts only from Table 4, for guidance:
70% of estimated cost Plan fee Inspection fee

£ £ £
20 000 – 24 999 86.25 258.75
50 000 – 59 999 166.75 500.25
100 000 – 139 999 293.25 879.75
500 000 – 699 999 1 046.50 3 139.50
700 000 – 1 000 000 1 362.75 4 088.25
Thereafter for each
230.00 690.00
additional 100 000
These fees are subject to periodic review.
16 Statutory powers and agreements

Development work often entails agreements or actions governed by statutory
procedures. Those most commonly encountered in the UK are summarised below,
together with the section number by which they are often glibly described.
Note: However, in late 2001, a major review of all development planning was
commenced and so the following is subject to review:
Planning gain
Section 106 Town & Country Planning Act 1990
(Formerly s.52 of the 1971 Act)
Procedure by which special restrictions, attached to or associated with a planning
permission, are embodied in a legal agreement, thus creating a contractual obligation
between the party wishing to exercise the consent and the local planning authority.
These agreements, or obligations as they are officially called, are often used by the
local planning authority where the objective cannot be validly stated as a planning
condition.
Section 106 – Obligations – are a charge on the land, and as such will be entered on
the Local Land Charge Register by the planning authority. The project manager
should endeavour to obtain the authority’s acknowledgement that obligations under
a Section 106 Agreement have been discharged so as to ensure the entry can be
cancelled. There are procedures for clearing off Section 106 Agreements which have
become stale.
Road and footpath closure

Sections 247 and 257 Town & Country Planning Act 1990
Appropriate to closures arising out of, or in consequence of, the exercise of planning
permissions. Administered through the local planning authority (which proposes the
Closure Order) and the Minister (who confirms it), often following a Public Inquiry.
The procedures can consume a great deal of time and effort and must precede
development proper. Development plans and highway plans should be minutely
checked to make sure that all necessary closures have been spotted and are being
arranged.
Stopping up and diversion of highways and bridleways

Section 116 and Section 118, Highways Act 1980
Application may be made direct either by the party concerned who wishes to have
the particular road closed and owns the land in question (or else has obtained
owner ’s consents to the closure); or by the local authority. The application is heard
by the Magistrates’ Court. This is a comparatively straightforward and quick
procedure if the Court can be made to feel confident about full submission of all
facts. Similarly Section 119 is suited to realignment of a footpath.
In the overall planning context, substantial and important highways are better dealt
with under planning law.
Road adoption
Section 38 Highways Act 1980 (Formerly Section 40 Highways Act 1959)
A Highway Authority may enter into an agreement with a third party (developer)
whereby the public acquires rights of way and assumes responsibility for
maintenance and exercise of all normal powers of control over a highway.
The agreement will usually specify the standard of construction to be carried out by
the developer and, from the date the highway is agreed by the Highway Authority as
being complete, will oblige the developer to be responsible for maintaining it to that
same standard for a given maintenance period, usually one year.
Highway Authorities also frequently require the developer to provide a performance

bond related to the construction cost of the highway.
Footpath dedication (‘walkway’)

Section 35 Highways Act 1980 (formerly s.18 Highways Act 1971)
Appropriate where it is intended the local authority should assume responsibility for
maintaining a footpath within a development which is to be used by the general
public or emergency and service vehicles, but ownership is to remain with the
landowner (developer). Such agreements also permit periodic closure of the footpath
(eg out of business hours) for security or similar reasons. Such a footpath becomes
dedicated and becomes a walkway.
It is important to note that the police have no authority in areas to be used by the
public but which have not been dedicated, and are usually reluctant to enter these
areas to indicate a presence. They will enter under police powers legislation where
their presence is requested or the occasion (eg breach of the peace) demands. The
project manager should advise the developer to consider carefully his policy for
developments such as shopping centres and office piazzas, having regard to security,
freedom to undertake future redevelopment, etc.
Oversailing public highways

Section 177 Highways Act 1980
Where a building will overhang a public highway or footpath, permission must be
secured from the local authority. Where a building’s support rests on a highway, part
closure is also necessary.
Public utilities
Electricity, water and gas supplies and diversion of existing supplies are governed
by, for example, the Electricity Acts and Gas Acts. It may be broadly stated, having
regard to the monopolies created by such legislation, that there is an entitlement to
the supply of these public utilities for the benefit of the land.
Where a development involves interference with existing services, it is necessary to

arrange for their stopping up and diversion to be covered by an agreement with the
utility company concerned. Most of the costs associated with stopping up and
diversion works are payable by the developer, but occasionally improvements can be
‘tacked on’ for the benefit of other land and for which the developer should not be
expected to pay.
(NB: Infrastructure charges. See reference under ‘Design’.)
17 Rights over land – easements

Wherever development takes place, the need for consideration to adjoining property
arises. Possibly there may be no more than a passive influence such as the
overshadowing of an existing building, but the effect or requirement may be more
direct, for example where there is a need to lay a drain across adjacent land.
The notes which follow are of necessity closely tied to UK law and custom, but the
principles involved are of general application.
A development site may enjoy, need or be subject to numerous rights over or for the
benefit of adjoining land. Most of those existing should be identified in the
acquisition process, but the project manager should request specific information
from the client or his lawyer. Similarly, rights required should be identified,
typically through examination with the architect and engineers.
Generally, rights cannot arise simply and automatically. They are acquired or
granted either deliberately by statute/by-law or by long usage (‘prescription’: 20
years). They cannot be acquired by stealth, force or permission. They should be
recorded for safety, but can be in the process of being acquired ( ‘prescription ’).
This is particularly important with registered title to land where these rights may
operate as ‘over-riding interests’, if they are visible simply on inspection. The rights
needed will be the subject of negotiation with adjoining owners, and possibly local
authorities or public utilities.
Typical rights are:
l Rights of light
If obstruction is claimed by an overlooked site, the test of whether the
proposed development must be cut back, or the loss is compensatable by
money, relates to the amount of light left and reaching the claimant’s
windows, and not the amount of light lost. Surveyors specialising in this work
are often appointed by developer and claimant to assess and agree the
valuation.
l Wayleaves
Legal agreements primarily used to record the right for services to pass over
or through adjoining lands, whether or not these are publicly or privately
owned. The project manager must review any existing wayleaves over either
his development site (ie for the benefit of other parties) or which the
development site enjoys across adjoining land. The client or his lawyer should
be able to assist with this information.
The project manager should also consider whether any existing wayleaves can
be terminated or need amendment if services are to be repositioned, coupled
with securing wayleaves for any new services required to run over adjoining
ownerships. The agreements required can only be obtained through private
negotiation.
l Rights of way
These are normally reasonably apparent from visual inspection where the site
is in an urbanised area, but in the countryside particular care is needed (eg
land for out-of-town shopping centres). In any event, the project manager
should seek clarification from the client’s lawyer, especially as to the means
of terminating or altering existing rights of way. Often these arise through use
over a long period (prescription) and are not recorded in any formal
document. Preservationist groups can be very knowledgeable and exacting
when fighting to protect rights of way!
Frequently a new development will closely abut or be physically tied in to an
adjacent property which is in separate ownership. In Greater London, the
London Building Acts convey a statutory right for the developer to undertake
his works, provided the right of support of the adjoining building is not
withdrawn, appropriate forms of notice are served on the adjoining owner(s)
interests, the works to be undertaken are properly described in advance, and
the adjoining owner(s) (there may be more than one, eg freeholder, ground
lessee, leaseholder) are correctly protected and/or compensated (eg upholding
of existing foundations during excavation, payment in lieu for cracks or other
damage caused by the undertaking of the development). Invariably a Schedule
of Condition of the adjacent property should be prepared and agreed between
the parties before any work starts on site.
Outside Greater London the automatic statutory right does not apply, although
there are some places with their own special legislation (eg Bristol), and the
only way in which the developer can secure permission to alter or tie in is by
private negotiation.
The work of serving notices (where applicable), agreeing Schedules of
Condition, settling compensation etc is usually undertaken by surveyors who
specialise in this area (frequently building surveyors).
REFERENCES
l Prescription Act 1832
l Law of Property Act 1925
l Land Registration Act 1939
l London Building Act 1939
and various Acts incorporating the Public Utilities whether or not privatised, and all
as subsequently amended.
18 Insurance
Summarised below are a number of insurances and related activities. Each should be
reviewed and applied according to the merits of the project in hand. The client will
probably have insurances in place for existing interests, and through this is likely to
have an established in-house or external brokerage arrangement; possibly too a
direct link with one or more insurance companies. It follows therefore that the
project manager must seek guidance from the client of any preferred liaison through
which insurances are to be placed. For ease of reference I have assumed in the notes
below a direct liaison between the project manager and insurance company, but in
practice it may be that the contact is through a third party.
In approximate order of occurrence for a typical development project, the project

manager should review and implement as necessary the following.
Strategic purchases for future development

Inform the insurer prior to completion of purchase and resolve the value and nature
of cover required. Special regard should be paid to third party liability if the
premises purchased will remain empty; consider ancillary measures such as
terminating services, dangerous or dilapidated structures, and security (including
prospect of squatters).
On commencement of demolition or start of new development, advise the insurer to

alter, reduce or terminate insurance cover on the property concerned.
Consultants’ professional indemnity

Prior to formal appointment of consultants, the project manager, or client if more
appropriate, should request details of each consultant’s professional indemnity
insurance – in particular, the identity of the insurance company, the amount of cover
and any excess, and the effect of one or more claims in each year on the cover
whether or not such claims are in respect of the subject project. If concerned about
the degree of cover, the project manager should prompt a review with that
consultant. It is also advisable to run an annual check of each consultant’s cover.
Circumstances can change at renewal dates.
Design
At schematic design stage, ie 1:200 scale plans or larger, the project manager should
ensure that drawings and specification information are provided to the insurer for
review and comment. (NB: It is important in the UK to ascertain whether design
proposals conform with FOC rules – Fire Officers Committee – which is a standing
committee of the leading insurance companies that sets guidelines by which
buildings are assessed for standard or premium rate.)
Non-conforming features giving rise to premium loading should be identified, as

also should suggestions for alternative/additional designs and/or materials which
may attract reductions in premium rating (eg sprinklers, drenchers, fire alarms, etc).
Development agreements: finance agreements

From the draft documents, when first received, extract relevant insurance and
liability clauses and pass to insurers for comment.
Restrictive covenants (including defective title, rights of access, light, etc)

It is often possible to obtain indemnity insurance, either for the client’s direct benefit
or with protection for associated development partners and/or tenants. The
availability of cover and the premium, usually a once and for all payment, are
dependent on individual circumstance, but this is often a suitable way of overcoming
a development constraint, the original purpose of which is probably now defunct.
Archaeological dig insurance

A form of insurance intended to give the client financial protection from the
consequences of delay caused by encountering archaeological remains which have to
be investigated. Availability of insurance and related premium will depend on the
facts of each case, and the project manager should evaluate accordingly.
Building contract
Advance notification should be given to the insurer of the proposed form of building
contract, the approximate value and the programme period including anticipated start
date. Phased completion(s) may be intended prior to full practical completion, in
which case the project manager should give details, including the character of any
third party occupation/works likely to occur.
The project manager should request the insurer to respond with guidance on
treatment of the insurance clauses under the proposed building contract. Usually the
contractor is responsible for insurance of the contract works, materials and third
party liabilities, but great care should be taken on the following aspects.
l Check whether the contractor’s insurance includes provision to cover the

effect of inflation on rebuilding costs should serious loss or damage occur
when the project is at an advanced stage. The sum insured should be reviewed
at periodic intervals on projects which are substantial and/or of lengthy
duration.
l The sum for third party insurance should be assessed relative to the physical
risks present at the site. The indemnity clauses under standard building
contracts are not all-embracing. The degree of client risk for third party
liability should be reviewed for each respective project. The project manager
must secure instructions as to the amount and scope of cover required.
l The contractor’s employers’ liability insurance policy must be checked and

confirmation obtained that the contractor is himself checking those of his
subcontractors.
Single project insurance

(Alternatively known as ‘BUILD’ – Building User ’s Insurance Against Latent
Defects)
The UK development industry, its consultants and insurers are increasingly

recognising the need to provide a single insurance which will protect any party with
a legal interest in a property who suffers damage as a result of a latent defect – and
without responsibility for the defect having first been proven to be that of any
member(s) of the team. The fact of damage and loss, within the terms of the policy,
is all that is required to trigger payment.
The benefits of this form of insurance were identified in the NEDO ‘BUILD’
Report, published in 1989, and there are now major UK insurance companies writing
policies. Although the cover between different insurers will vary in detail, the
following principles will usually apply:
l Only buildings to be newly constructed (not existing) will be admitted.

l Cover will be for ten years from Certificate of Practical Completion.
l The damage suffered must result from a defect in the design or construction
of the structure, external walls and roofing. Some insurers will also admit
services and other elements of a building in return for an additional premium.
The insurance company will probably reserve its right to claim against
any member(s) of the team it believes responsible for the defect (subrogation), but
this will not prevent or delay payment of a valid claim. Consequently the insurance
is seen by developers, funds, purchasers and tenants as a considerable safeguard.
However, the developer has first to accept this is justified by the size of premium
required. As an approximate guide only, this will be in order of 1% of the total
construction cost for the basic cover.
There will also be fees to pay for the insurance company to employ consultants who
will vet drawings and calculations produced by the developer’s consultants and
inspect construction.
In its present form BUILD is unlikely to remove the requirement for collateral
warranties, or alleviate the need for consultants to carry their own professional
indemnity insurances.
Performance bond
A financial warranty obtained by the contractor or subcontractor in favour of the
client (or possibly in favour of the main contractor in the case of subcontractors)
whereby the bond company commits to payment up to a maximum limit in the event
of failure to perform or complete by the bonded contractor.
Within the UK the traditional maximum sum which the bonding market would
underwrite has been 10% of the contract or sub-contract sum. Outside the UK, but
no doubt dependent on the ‘local’ market, substantially higher cover has been
available, even up to 100%. The project manager should recognise, however, that the
premium for bond cover paid by the contractor has to be financed by the contractor,
and therefore is presumably reflected in his tender. Consequently the project
manager and his team should weigh carefully the need for, and level of, bonding.
Bond companies are notoriously reluctant when called upon to meet commitments,
and are as stout as any contractor or subcontractor in pointing to failures or errors by
the client’s team which have led to a performance failure. Consequently the project
manager should beware absolute reliance on the ‘security’ of a bond. Further, should
there be a construction problem and arguments ensue with the bond company, the
project manager may find the contract becomes legally ensnared, and he is unable to
initiate action on site to progress the works.
However, a positive by-product of calling on contractors to supply a bond is that the

reactions of bond companies to such requests is a useful indicator of the financial
market’s regard and current assessment of each contractor.
Advance rent cover (or loss of interest on trading projects)

Where completion of a project is delayed due to substantial damage during the
course of the building works (ie as for contract inflation above) the client’s
expectation of rent income, whether or not from pre-lettings, will be significantly
deferred. Insurance cover is available in the market to protect against this ‘loss’, and
apart from the client’s immediate interests, is particularly pertinent where ground
rent, equity sharing or a premium payment would fall due to a development partner
or third party. Development and Finance Agreements often stipulate that immediate
cover be placed for loss of ground rent, three or four years being the usually
specified periods.
Practical completion
At the date of practical completion, or partial practical completion, responsibility for
building insurance passes to the client. This applies whether or not the contractor
remains on site to attend to outstanding works or snagging items; it is also regardless
of the date on which the architect may actually issue his certificate of practical
completion or the time it is received by the project manager and/or client.
It is essential the project manager observes the following procedures:
l Prior to the anticipated date of practical completion obtain from the appointed
quantity surveyor an estimate of the current reinstatement cost.
l If the project manager is not present at the practical completion inspection,

specific instruction must be given to the architect to telephone him
immediately prior to practical completion being confirmed on site.
l The project manager must immediately inform the insurer of the extent of the
property for which practical completion is accepted and the current
reinstatement value.
These events should be closely followed by written confirmation. It is also to be

expected that the project manager will give the insurer adequate forewarning of
practical completion and, in cases where tenants or the general public are to be
admitted, will give information on the timing and extent of this.
Tenants’ works
Part of the fitting out undertaken by tenants will, on completion, comprise the
developer ’s structure, for which the latter usually carries property insurance
responsibilities (eg plastering, electrical wiring). The project manager should secure
details and costs from the tenant(s) and inform the insurer accordingly.
Claims
Wherever the project manager believes circumstances may give rise to an insurance
claim, he should notify the insurer immediately.
The project manager must particularly have regard to events which affect insurance
responsibilities on behalf of any development partners and ensure that there is
compliance in all respects with the client’s obligations under legal documents.
19 Specialist subcontractors
A principal feature of the UK design and construction industry is the use of
components which in whole or part are designed, manufactured, assembled and
installed by specialist companies; these form a major physical and financial part of
most commercial development building contracts. The role is performed by
companies who thus cross the traditional boundary of responsibilities between
professional consultants (design) and contractor (building). In consequence,
principles of appointment have evolved which conventionally place a considerable
degree of responsibility with the client. There are numerous variations to the basic
approach and the project manager ought therefore to review with his development
team the particular arrangements to be applied to any given project. The main
considerations for the project manager are set out below.
19.1 Architect’s recommendation

RIBA Standard Form of Agreement for the Appointment of an Architect (Clause
4.2.5) states:
‘The Client shall hold any Specialist and not the Architect responsible for the
products and materials supplied by the Specialist and for the competence, proper
execution and performance of the work with which each Specialists are
entrusted.’
Note the presumption of employment by the client and the responsibility placed
upon the subcontractor – and not the architect – notwithstanding the architect’s role
in nominating and/or agreeing to that appointment. In practice it is invariably
difficult to distinguish between design or construction responsibility where a
difficulty arises between the interface of a particular specialist’s work and that of
another building element. Nor is it often easy to determine where design
responsibility rests as between the subcontractor and consultant. Should the
architect’s performance specification reasonably have anticipated certain features
draughted by the subcontractor, which subsequently give rise to problems?
Prior to selection or appointment of a specialist subcontractor, whether nominated or

otherwise, the project manager should obtain from the architect a written
recommendation to that effect, including guidance on the respective design
responsibilities of the architect and specialist subcontractor (see Appendix A1
Clause 4.1.2).
In certain instances the role of the specialist subcontractor is more aligned to a

design discipline other than that of the architect, the prime example being that of the
M & E subcontractor. The same principle of recommendation therefore applies to
the appropriate design consultant, but, as it is the architect who is specifically named
in the building contract, his endorsement of the recommendation is still required.
19.2 Performance specification

The project manager is obliged to rely on the expertise of the respective consultants
to produce adequate and appropriate performance specifications, against which
tenders by specialist subcontractors can be obtained.
Consultants often rely on one or a number of such specialists to assist them in

developing the outline design prior to preparation of a performance specification.
Unless otherwise agreed, the project manager should ensure that such liaison does
not result in the design being tailored solely to the abilities of only one specialist
company, thereby denying the opportunity for realistic tender competition. The
consultants should be instructed to define from their own expertise the primary
characteristics required from the specialist element and only thereafter to consult
informally with the specialist companies as to any economic or physical refinements
that would be appropriate.
The project manager should study the performance specification for each element
within the bounds of his general understanding, but he should in no way relieve the
consultant of his responsibility for producing a suitable document. Aspects of the
performance specification which the project manager might suitably consider are:
l Information on design and construction programme.

l Statements on the subcontractor’s design responsibility: where does this leave
the consultants?
l Information requested on life of materials or equipment.
l Requests for test certificates and/or works and site tests.
l Need for advance ordering of materials.

l Procedures for payment and delivery of goods.
l Control of exchange rate fluctuations in respect of foreign subcontractors or
suppliers.
l Guidance on future maintenance, cleaning, availability of spare parts, service
agreements, etc.
l Guarantees offered.
l Examples of previous projects for which the specialist has supplied or
installed the product he is tendering.
19.3 Selection vetting

Prior to tenders being invited, the project manager should satisfy himself that
whichever of the companies on the invitation list produce the most satisfactory
quotation will have appropriate corporate resources, expertise and capacity. The
principal methods of inquiry are:
l Vetting or corporate accounts.

l Visit to contractor’s works.
l Checks with clients/consultants of previous and current projects on which the
specialist company is engaged.
l Guidance from the main contractor (where already appointed).
19.4 Performance bonds/corporate guarantees
These are associated with the previous headings and provide some additional degree
of assurance in respect of a contract about to be undertaken. A performance bond is
usually obtained by the subcontractor concerned from institutional or banking
sources, and warrants that if the subcontractor should fail properly to discharge his
contract responsibilities, the bondsman will pay to the client an agreed sum. In the
UK this has traditionally been 10% of the subcontract value, but in recent years
clients have pressed for and have succeeded to some degree in obtaining higher
percentage values. The premium for cover is payable by the subcontractor, although
the cost is likely to be reflected in his tender.
The ability of the subcontractor to obtain a performance bond may be regarded as a

current and additional verification of the subcontractor’s financial stability and
market expertise (institutions can usually be relied upon to vet the bonded company
prior to entering into a commitment).
The project manager must also consider the benefit of a 10% payment against the
costs associated with finding and instructing an alternative subcontractor, in the
event of a failed performance; often it will fall short of the loss incurred but may
nonetheless be considered worthwhile because of the contribution that will be
obtained. In instances where the subcontractor’s product is not one that can be easily
produced or completed by an alternative subcontractor, the project manager should
consider whether there are grounds for seeking an increased percentage value of
performance bond, albeit with a higher premium rate.
Where a subcontractor is a subsidiary company of a larger group, the project

manager should consider asking for a parent company guarantee as an alternative to
a performance bond. The reaction to a parent company guarantee inquiry may itself
reveal an interesting attitude to the prospects and merits of the subcontracting
company. If available, and provided the parent company is considered to be
sufficiently worthy, a guarantee is probably of more value than a performance bond
in that it relates to the entire subcontract value.
19.5 Design warranty

The conventional appointment arrangements for specialist subcontractors in the UK
includes a standardised warranty which is signed by both subcontractor and client, in
which the subcontractor affirms that he will exercise skill and care in the preparation
of his designs and workmanship.
The project manager should ensure that warranty forms are included in tender
invitations issued to subcontractors with a requirement that they be signed and
returned with tenders. The client is thus able to complete the warranty form with the
selected subcontractors so that protection is available from the start of their
involvement.
19.6 Record drawings, guarantees, cleaning and

maintenance
Each subcontract tender invitation should ask tenderers to furnish guidance and/or
specify the material they will provide on completion. This could include a
requirement to provide a sample maintenance agreement and quotation where
appropriate, eg lifts. A favourable attitude is always more likely at tender stage than
at practical completion. The project manager should review the relevant criteria with
the consultants according to the nature of each contract.
20 The building contract

There are many occupations which could claim the satisfaction of producing a
tangible end product; for example the machinist producing an intricate piece of
medical equipment or the fashion designer contributing to a new collection. A
project manager in the development industry, however, has the good fortune to plan
and enjoy a role which arguably exceeds most others. The involvement is frequently
from start to completion and the potential to influence the end product is
considerable. The project is always unique, even if of a generic type, and
consequently there is always a challenge. The lasting satisfaction, however, is in the
creation of a product which is used and experienced by others, is visual, and
frequently has a life span intended to outlast its creators.
It is this translation of ideas, the concept into reality, that concerns us now. The
mechanism through which financial, contractual and functional aspirations are to be
physically expressed is the building contract. It deserves considerable forethought.
20.1 Contract choice

There are a variety of contract styles (eg lump sum, design and build, fixed fee,
management, construction management etc), and authorship (eg JCT 1998, BPF,
ICE, NEC and ACA) in current use. Hybrid forms of contract have also been
devised by many clients, contractors and consultants to suit their own preferences or
special circumstances. It is essential that the project manager should take a detached
view for each project and appraise the most suitable form of contract. The following
criteria are suggested:
l Character of construction work . Is it totally new construction, or does it

entail refurbishment where much of the detailed design cannot be drawn or
confirmed until the contractor has exposed the structure? Is there a simplicity
in the construction as, for example, warehouse buildings, or does it entail
considerable technical complexity as, say, in process plants?
l The speed with which it is essential to achieve a start on site and/or complete
the project. This may influence the quality and quantity of the design
information that can be produced pre-contract and the timing and method of
appointment of specialist subcontractors.
l Consultant familiarity . How much expertise and knowledge do the

respective consultants have of the alternative forms of contract, both as
practices and the particular individuals concerned? All projects are judged
successful whilst moving smoothly; it is when problems arise that the project
manager (and client) are most in need of expert guidance and it is unnerving
if the consultants are unfamiliar with the procedures required by the building
contract.
l Specialist subcontractor responsibility . What is the involvement of

specialist subcontractors both by degree and number? Is it intended they be
nominated by the consultants or a domestic appointment by the contractor,
and how is the selection process to operate?
l Cost assurance. What degree of cost certainty is required prior to the

building contract being let, and how realistic is this, having regard to the
amount of design information available to the contractor(s) for tender, its
complexity and the length of the project? The fundamental question to be
answered is: ‘Does the client/project manager demand a fixed price contract?’
The answer has a strong influence on the choice of contract; it also demands
realistic consideration of the obligations of all parties to that contract (eg
timing of information supply). If not pragmatically assessed and
responsibilities recognised, the result will almost certainly be claims for delay
and expense.
20.2 Contract documents

Conditions
l Standard clauses. The criteria mentioned above offer a basis from which the
consultants can advise the project manager of any adjustment to the standard
terms contained in the appropriate form of contract. In receiving their
recommendations, I do urge the project manager to reflect on whether the
consultants are keeping faith with the principles of the contract adopted.
There are occasions when consultants propose changes which run counter to
the principle, either out of concern for the client’s interest (in my view
misguided) or sensitivity to responsibilities closer to home! The project
manager must maintain the equilibrium of responsibility – this is in the
client’s interest.
Responsibilities are similar to forces: when they are spurned or off-loaded

they often produce an opposite reaction – not always equal, potentially greater
and often misunderstood.
Standard contract forms require the input of data to make them effective, eg
the dates for site possession and completion of the works. Certain of the
responses should be self-apparent, but others hinge on priorities and attitude,
hence the following comments:
l Date for completion . When seeking tenders there is the option to specify the
period for the works or leave it open for tendering contractor(s) to bid. I will
say only that I believe the judgement of the practising expert (the contractor)
is the more reliable bet.
l Defects liability period. In the UK twelve months is the conventional period.

However, consider whether there are circumstances or critical elements for
which a longer period might be more appropriate, or alternatively if the works
are modest or of minimal significance, then consider the merit of a shorter
period. Remember, the greater the period, the longer the time before the final
retention is released to the contractor. This has to be financed, and his overall
risk is also potentially increased. In theory at least, both should be reflected in
higher tender bids to the client.
l Contractors’ insurance against injury to persons and property. This is

one instance where perhaps the figure stipulated owes more to recognition of
compensation sums awarded by the Courts than it does to the specific
character of the contract works. That said, consultants, contractors and their
insurers seem to operate an unwritten code from which derives a common
understanding of values acceptable in the market place. Through discussions
with the consultants and/or the client’s insurer, an appropriate figure can
usually be defined.
l Liquidated and ascertained damages . The presumption seems so often to be

that this should be assessed by reference to the revenue or other return denied
to the client. This of course could vary markedly from one similar building to
another, because of a host of factors such as location, funding, market
conditions etc. These are disconnected from the business of construction.
Damages should be assessed by reference to the contract value and the affect
of damages upon the contractor’s business and attitude. They should be
sufficient to encourage him to perform, but not so great that failure would
drive him to bankruptcy. If the latter, he will either not tender or his bid will
reflect the risk. Remember too that the damages figure will often reappear in
subcontracts. It is in the client’s interest as much as the contractor’s to
encourage interest and competition from these essential contributors to the
construction process. The project manager must moderate attitudes; apply
reason and sense.
l Partial possession/sectional completion . If there are parts of the works to

which either of these requirements apply, the project manager should ensure
they are defined in the conditions and similarly the respective values for
liquidated and ascertained damages which are to apply.
Bills of Quantity
Whilst the Bills of Quantity as a whole may be of interest to the project manager, it
is the preliminaries section (or its equivalent in other forms of documentation) which
should always command attention. It is here that the specific circumstances of the
project (as distinct from the standard conditions) are conveyed. This will form the
backbone to the contractors’ understanding of the working arrangements and may
influence their attitude to a tender. Preliminaries which demonstrate thorough
preparation and a responsible approach can but add to contractors’ confidence when
pricing and, after selection, the attitude of trust required for the construction phase to
be conducted successfully. The following are potential items for inclusion.
l Site description. A physical and legal summary on matters such as location,

boundaries, nature of adjoining ownerships.
l Site possession . The date the contractor is to be given control. If the site is to
be handed over in phases, then the dates for each plus a clear definition of the
respective boundaries.
l Access/egress. The local routes and entries to the site to which contractor
vehicles and work personnel are restricted. Also any particular requirements,
location or restriction on contractors’ parking.
l Site security . Requirements for hoarding, lighting, visitors’ book, security

personnel etc.
l Reports and investigations. Ground investigation, topographical survey etc.

Copies to be issued with the tender documents.
l Statutory approvals . The status of planning permission, building regulations

etc and any remaining conditions to be fulfilled and on whom the onus for
this is to fall.
l Team accommodation/equipment requirements. For example a site

architect’s office, conference room, plan chest, telephone.
l Site meetings, meetings with subcontractors etc. Frequency, location,

chairmanship, minutes etc.
l Consultants’ site representatives . Provide a note of the appointees, eg site

architect, resident engineer, together with a description of their role on site
and their authority relative to the contractor and consultants.
l Disturbance to third parties. Set down the requirements for limitation or

control of noise, dust, working hours, cleaning of adjacent roads. Also any
need for the contractor to liaise, either specifically or informally, with third
parties, eg agreeing schedules of condition, obtaining oversailing rights for
cranes, securing temporary road closure.
l Approval procedures. For the appointment of specialist subcontractors and

to the drawings and information, eg method statements, to be produced by the
contractor and his subcontractors. Also the ratification procedure for site
instructions.
l Warranties/bonds. Refer to and include the full form of any warranty or

bond required from the main contractor and/or subcontractors. Also state
whether signed, completed forms must be submitted with each relevant
tender. This procedure prevents contractor(s) attempting to negotiate changes
after an order has been placed and the team is committed to working with
them.
l Quality checks and samples. Method statements. A statement of the issues

and/or items to which these apply and the procedure for approval.
l Deleterious materials. A list of those items or substances which the

contractor is deemed to warrant will not be incorporated into the works.
l Health and safety . The statutory or other requirements which the contractor
is required to observe.
l Latent defects insurance . State any inspection requirements by insurer’s

consultants, or other criteria which the contractor is asked to follow to assist
the client in securing a policy upon practical completion.
l Site inspection by development partners, eg funding institutions. Where

possible, identify by name those to whom inspection rights are to be afforded,
and also state their role. Confirm the nature of the rights, eg the contractor not
to accept instructions or access to be restricted to a certain part of the site
only, and any other controls which are to apply, such as access only to be
given upon 24 hours’ prior notice to the contractor.
l Programme. Consider the style and detail of programmes required from the
contractor(s) with their tender and/or during the contract. Also stipulate any
particular events, dates or links that are to be included.
l Valuation dates and certification. State the intention. Remember that where
the employer is to recover monies from a third party, such as a funding
institution, the date schedule may need to be worked out by first referring to
the fund’s payment cycle.
l Completion. In addition to any reference in the Conditions (above) confirm

here any requirements for partial possession or section completions, and any
access arrangements across the site for third parties such as tenants and their
contractors to gain access for fit out.
l Records. Confirm both the nature and the timing for the contractor’s
submission of ‘as built’ records, operating and maintenance manuals,
guarantees, and test certificates.
Provisional sums
Usually a schedule within the Bills of Quantity of financial allowances (defined by
the consultants) for work items where the detailed requirement is not adequately
described in the tender documents for the contractor to price. Whilst there is often
legitimate cause for this approach, the project manager must guard against its use to
cover the failure of the design consultants to complete information in time for the
tender.
Drawings
There are two aspects to this: the drawings issued with the tender documents, and
those attached to the signed building contract. Although I would always advocate the
project manager prompting the consultants to complete all construction drawings in
time for tender, in the real world it has to be acknowledged that this is rarely
achieved. Due to the time difference between tender and contract, revisions and
additions to drawings often occur. At both stages the project manager should check
that the drawings adequately define the works to the standard expected, and for the
building contract obtain confirmation that the financial effect of any revisions is
negotiated and included in the contract sum stated in the building contract.
Specification
Either as a separate document or perhaps by incorporation in the Bills of Quantity,
there should be a specification of the working standards required for the works.
Whilst the project manager may not be an expert in such matters, a review of the
document should indicate its efficacy.
Performance specifications
These will be required for specialist items such as lifts and curtain walling. Similar
consideration applies as for the general specification but in addition the project
manager should expect to find, or draft, requirements for tests or certificates, product
guarantees, performance bonds and/or warranties, and advice in respect to repair and
maintenance. For the last item I would recommend that each specialist be required to
include in his tender a sample maintenance contract, including rates, which it is open
for the employer to accept upon completion of the works.
20.3 Tender/Negotiation
The analysis of contract type, mentioned earlier in this chapter, will likely include
discussion on this topic. The reasons usually advanced for competitive tendering are
perhaps self-obvious, being essentially one of achieving the cheapest price and/or
shortest programme. As a generalisation this is true, but to assume these are the sole
criteria for decision-making is to overlook the circumstances needed for a tendered
contract to operate successfully and the benefits that can accrue through negotiation.
Tender
The information provided for tender should be very substantial, if not complete.
Adequate time must be allowed to the contractors to comprehend all the information;
remember they are seeing this for the first time, whereas the client and his team have
probably lived with it for many months if not years. The contractor will be obtaining
many of his prices by sub-tendering and if reliable bids are required time must be
allowed, having regard to the scale and complexity of the works.
The time for return and opening of tenders should be stipulated and wherever
possible the contractors should be invited to attend the tender opening. After the
effort required of them they are at least entitled to see the fruits of their labours and
make a judgment of their bid against others received. In the round this is of benefit
to all in the development industry. Usually the bid(s) most preferred will be called in
to give the client’s consultants the chance to check that the bid is complete (it is
surprising how often items are found which have not been priced) and that the
pricing addition is arithmetically correct. Dependent on the tender requirements,
programmes, method statements etc, may also be requested. At this point the project
manager may also want to take a lead role by interviewing (with the consultants) the
contractor(s) to satisfy himself on matters such as resourcing, programme phasing,
and attitude!
Frequently, the compilation of contract documents for client and contractor signature
takes longer than the mobilisation period needed by the contractor to make a start on
site. A letter of intent is therefore often issued. This must be prompted by the project
manager, who should also review the draft of the letter prepared by the consultant –
usually the quantity surveyor or contract administrator. Thereafter, the project
manager should continue to prompt the early completion of the formal contract.
There is never a good reason why this should take many weeks or months.
Negotiation
As another generalisation it can be said that whereas most clients will probably
accept with little question a recommendation to procure by competitive tender, they
instinctively distrust negotiation. The implication of a commitment to one contractor
before a full price has been submitted sets nerves jangling. Yet there are many good
reasons why negotiation may be the more prudent option.
Negotiation offers the opportunity to include the contractor’s expertise in the pre-
contract preparation. It might therefore be considered appropriate that, for works
which are generally complex or require particular technical expertise, assessment of
alternative construction methods and perhaps more generally on ‘buildability’ is
directly available to the team, as also construction programme analysis. Quality
standards are another aspect which can benefit through pre-contract understanding
and preparation. The contractor’s knowledge of specialist subcontractors may be
invaluable in determining those who have the necessary skills and resources.
A less considered advantage to negotiation can occur in either boom or bust cycles
of the industry. In a strong market there is a lot to be said for commanding the
attention of one contractor and wedding him to your team. The contractor’s own
returns in terms of profit, overhead etc, and his knowledge of contract rates, can be
used to give certainty to the budget estimates instead of lying prone to the hype of a
bullish competitive market. At the bottom of the cycle, when contractors’ resources
may be very lean and a climate of business failures generally abounds, it might be
considered an advantage to identify a proven contractor and secure his commitment
to contribute to the team. Once again, there is the benefit gained of the contractor’s
knowledge of subcontract rates and the current corporate status of specialists.
Selecting a contractor for negotiation will usually require some degree of
assessment, often in the form of presentations and discussions. One approach which
seeks to harness the benefits of both competitive tendering and negotiation is a two-
stage tender. Broadly stated, a selected group of main contractors is asked to tender
their requirements for profit, overhead and possible preliminaries, at an early stage
of the pre-contract programme based on information prepared by the client’s team.
Having made the selection, the chosen contractor then works as a member of the
client’s team and ultimately secures tenders for the subcontract works which are
assessed in conjunction with the consultants. The arrangement may offer programme
advantages, as the contractor can secure specialist tenders as the design information
becomes available, rather than wait for the entire construction information to be
completed. Crucial packages can be highlighted and, if tendering is advanced, time
for reassessment built in without prejudice to the overall programme.
20.4 Advance preparation

With the pressure that invariably exists to minimise programme time, the project
manager must consider the options available.
Demolition/site clearance
The removal of existing buildings and the diversion or stopping up of main services
is an exercise that can often be carried out separately and without prejudice to the
main contract. The work can be carried out during the pre-contract programme.
In the UK, the one qualification the project manager must bear in mind is to check
that planning permission has been granted if the existing buildings are in a location
where prior consent is needed, such as a conservation area.
Consideration must be given to whether foundations and any basement are to be
included in the removal exercise. The relevance of this should be apparent from
discussion with the team. Similarly, a view must be taken of whether it is
appropriate to leave any of the material stockpiled on site to act as hardcore for the
new construction, or whether there are items such as artifacts which are to be
carefully removed and placed in storage. The taking down of part of a structure may
demand measures for upholding adjoining property, eg by shoring or protecting the
remainder which is left standing.
Requirements such as these should be clearly stipulated in the demolition tender and
contract.
Advance orders
A review with the team should highlight materials or elements whose lead-in time is
likely to be too long to fit with a contractor’s programme if an order is not placed
until the main contractor has been appointed. Structural steel and lifts are typical. By
placing an advance order and then novating to the main contractor, the client
protects the programme, but at the risk of a financial commitment to the supplier or
specialist ahead of receiving a main contract tender and being certain to proceed.
The project manager must recognise the risk judgment required and advise the client
accordingly.
Lead-in times can be established by approaching specialists and suppliers through

the consultants (or through a main contractor if already part of the team), and
quotations similarly obtained. Usually it is possible to limit the client’s risk by
agreeing a schedule of cancellation charges related to time and progress through the
specialist’s design and fabrication stages. A formal order will need to be placed on
the client’s behalf confirming this, and also the intention that should the main
contract proceed, the order will be assigned to the main contractor. I would also
recommend the project manager to record that prior to this transfer, materials
produced should be clearly marked as to the client’s ownership. It may be
appropriate to arrange periodic inspection to check on this, and progress in general,
prior to the transfer to the contractor.

It is as well to remind the reader here that under most standard forms of contract the
project manager has no locus. He is independent of the formal obligations placed on
the consultants and the contractor. If the project manager is a member of the
employer’s organisation, ie not a consultant, there will be a degree for formal
influence that can be wielded, but it is still important to distinguish between this and
general project management.
Consequently there must be recognition of the consultants and contractor’s duties

and an approach which promotes their positive execution. The following are
suggested as areas for particular consideration.
Information
In whatever form information is issued to the contractor, the project manager should
be satisfied that it is always provided in ample time for the contractor to perform his
tasks. These, it must be remembered, include obtaining quotations and/or
arrangements with subcontractors, co-ordination with other trades, ordering and
procurement of materials and possibly other special arrangements such as storage,
crane time and access scaffolding. The clarity and content of information should be
reviewed. It is often worthwhile obtaining an opinion from the contractor – but
through informal discussion!
Architect’s instruction
A specific, contractual form of information and one with financial overtones. It is
essential that architect’s instructions (AIs) are issued promptly and in clear terms. So
often they appear to be couched in ambiguous language. If so, it is to no one’s
advantage. The project manager should step in immediately and demand precision.
Just as important, the project manager must be satisfied that each AI is necessary and
its financial consequences, under the terms of the contract, can be correctly
interpreted. Often, architect’s instructions simply act as confirmation of matters
already priced, or which are the subject of allowances, within the contract sum. The
wording of the instruction must be definite and complete.
Architect’s instructions are also used to confirm site instructions. So often the latter
are accumulated over days or weeks, and are grouped together in one all-embracing
instruction. There are two aspects to this. The first is that a site instruction validly
given should be confirmed promptly and not languish in the architect’s office; to do
so mistreats the contractor and misleads the quantity surveyor and project manager
on cost control. The second aspect is that when many site instructions are grouped
together, it can happen that some which might be considered ‘questionable’ will slip
through. Time for effective counteraction is also lost. This is all a matter of good
discipline, enforced by a few friendly persuasive words from the project manager.
One option available to the project manager is to instruct that all AIs must receive
his approval before they are issued to the contractor. To do so draws the project
manager directly into contract administration, slows the process, and undermines the
status of the architect. I would therefore suggest that any such control should first be
considered very carefully, but if needs must . . . !
Subcontractors
Perhaps self-obvious, but the procedures written into the contract for main contractor
recommendation and consultants’ approval of subcontractors should be observed.
These may include specific requirements as to corporate information, test
certificates, sample materials etc. Certainly, where drawings are to be produced by a
subcontractor for approval by the consultants, this process needs to be monitored.
If specialist subcontractors are to provide warranties to the client, as is likely in the

UK, the submission and completion of these too should be included in the
monitoring record. As suggested elsewhere in this guide, I recommend that
specialists tendering to the main contractor should be obliged to include a signed
copy of the warranty form set out in the contract documents. Thus the client has only
to add his signature to the warranty of the chosen subcontractor for the process to be
completed.
Method statements
This too should be a monitoring issue, checking that the statements called for in
contract conditions are submitted in good time by the contractor and
reviewed/approved by the consultants.
Valuations and certificates for payment

Although administered by the consultants, usually without difficulty, it is as well at
the start of the contract for the project manager to ascertain that arrangements have
been mutually agreed with the contractor for practical implementation. Thereafter, it
is a matter of observing that the regular cycle occurs efficiently and that delays do
not creep into the system for causes either within the team or external factors, such
as postal strikes.
The issues are more critical if disagreement occurs between quantity surveyor and
contractor of amounts included in valuations, and/or the architect certifies payment
less than valuation because of concerns about quality, performance etc. Reassurance
as to the contractual basis should be sought from the consultants; it is equally
important that the reason for and amount of deduction is drawn to the contractor’s
attention, with the accompanying certificate. Whilst this might seem obvious,
experience suggests the project manager would be unwise to assume. It is in
circumstances like these that the project manager must act positively. He must
anticipate the wound and foster an understanding and solution. However correct the
architect’s action, watching blood flow without efforts to staunch and heal is of no
help to the client.
Meetings
Being a focus for recording progress and reviewing issues, an early requirement of
any building contract is to establish the regular meetings that are to be held and their
organisation, eg frequency, location, chairmanship, agenda, attendance etc.
Site meetings are normally chaired by either the contractor or the architect/contract
administrator. To avoid imprecision, it is best if the responsibility is stated in the
tender documents. However, this is no guarantee of the quality of chairmanship or
minutes. Some latitude for individual style is desirable if only to make life
interesting, but should not be treated as an excuse for inadequate reports and
incoherent minutes. If he judges the need, the project manager must ‘request’ a more
adequate record.
Progress reporting is particularly important. The assessment of individual activities

should be in a style which enables the critical issues, whether localised or of broader
influence, to be seen in context. To assist this, I recommend that progress reports on
individual activities be stated as so many days or weeks behind/ahead of programme,
rather than in percentages. 30% behind on a two-week activity is very different from
30% on twenty weeks. Six days or six weeks is instantly meaningful.
Building inspector
The project manager is entitled to reassurance that relationships between the
contractor and building inspector are good; that visits are occurring as needed and no
problems arising.
Visitors’ book
A modest but occasionally very useful item, not least because if correctly maintained
will record visits by health and safety inspectors or third parties who may be of
interest to the client, eg prospective tenants.
Before moving on, I would just like to emphasise that whilst each of the above has a
relevance and importance, they should only be regarded as integral elements of the
project manager’s armoury. A ritualised approach will not of itself bring success.
The project manager must be proactive in moving amongst his team, taking
soundings, sensing the confidence factor in comments, observing organisation on
site, noting the telltale signs of (in)efficiency in and around the site manager’s office.
As I once heard it expressed, ‘the smell of the concrete’. This is where the project
manager will feel the pulse of construction and where he too can generate
enthusiasm and belief from his own attitude.
20.6 Completion
Completion arrives in two stages: completion of the works such that the employer
can take possession and use the building and, some time later, completion of the
administrative requirements of the contract.
Commissioning
This particularly applies to the services, but also related equipment such as lifts and
window cleaning equipment. Whilst the specific requirements should be spelt out in
the contract documents, and time allocation be included on programmes, the project
manager ought to enquire reasonably ahead that the consultants and/or contractor(s)
have made preparation. Often they appoint independent engineers to carry out this
task. A related consideration for the project manager is possible introduction of the
management organisation who will be responsible for future maintenance; the
opportunity to observe commissioning can then be treated as part induction and part
reassurance of the integrity of the installations.
Extension of time/Certificate of non-completion

Although an extension of time may be awarded at any time during the progress of
the works, it is at and around the time of completion that it takes practical effect.
Similarly, any certificate of non-completion for the contractor’s failure to complete
on the date specified in the contract, or as amended by an extension of time. The
point here is that the project manager must be alert to either circumstance, partly for
reassurance that contract responsibilities are observed (and in turn the client’s
interest protected) and also because of the practical implications there may be for the
use and occupation of the building. The project manager is the vital link. Foresight
and communication provide the best route to a pragmatic rather than emotional
client response.
Operating and maintenance manuals; as-built records

The contract should state the time by which the contractor is to deliver these
documents. Frequently this is defined as by the completion date so that in effect the
client is able to commence maintenance with full information to hand. Whatever the
requirement, it is worth questioning some weeks earlier the progress in preparing the
documents. There is nothing more frustrating than for a building to be physically
complete but for the issue of the completion certificate to be jeopardised through
failure to have the records available.
Certificate of Practical Completion

The great day! To focus on the attendant issues:
l Have the consultants responsible for other specialisms, eg services and

structure, separately certified or confirmed to the architect/contract
administrator, their respective satisfaction?
l Are there snagging or rectification items to which the contractor is to attend

after the certificate is issued? If so, has the schedule been prepared for
attachment to the certificate of practical completion?
In an ideal world, snagging schedules would not exist. However, we deal in reality
and unfortunately they are capable of exploitation. When it suits the architect and/or
client, they may argue that there should be not a single snagging item. On other
occasions the pressure for handover may lead to schedules of excessive length being
accepted. There is no simple solution, but it is a time for the project manager to be
proactive in the cause of rational thinking.
The UK court action between contractor John Mowlem and financier/client Eagle
Star Insurance Company, although perhaps extreme of its type, nonetheless
illustrates the commercial pressures that can bear down on a building contract
relationship.
The transfer of insurance responsibility must be executed. The project manager must
see to it that the client’s insurers are notified the instant the certificate is issued (or
indeed forewarned) and that they are also provided with an estimate of the
reinstatement cost. The notification should be confirmed in writing immediately.
Labelled and scheduled keys should be received from the contractor and passed on
to the client or its authorised representative.
Mains services metres should be read in conjunction with the contractor in case of
subsequent need to apportion accounts from the supply companies.
Removal of the contractor’s site establishment

Determine with the contractor the date by which this will occur. If there is snagging
work to be done after the practical completion, the contractor may need some
continuing facilities, even if scaled down from what has been required for the main
contract period.
Defects
If and when they arise during the defects period, relevant items should be reported
formally to the contractor. Both the architect’s notice and the contractor’s response
should be monitored to ensure the issue is understood, whether or not remedial
attention is considered urgent.
A full and formal inspection is required at the end of the defects period. A prompt to
the consultants a few weeks beforehand never goes amiss, and arrangements for
access will need to be made if the building is occupied, both for the inspection and
for the contractor to carry out any subsequent works. There is a tendency at this
stage of a project, when the contractor has no permanent presence on site, for the
time taken to attend to defects to drag on. It pays therefore to check that the
contractor has made definite and organised arrangements for the various trades and
subcontractors that may have to return to the site.
Completion of defects is marked by the issue of the architect’s certificate of making

good defects (in JCT language). Again it is a matter of contact with the architect, and
other consultants where relevant, to ensure they are checking satisfactory completion
of the defects works, and the certificate is issued immediately after.
Final account
Although normally a matter for resolution between the quantity surveyor/contract
administrator and contractor, the project manager must keep abreast of progress and
be informed of delays or arguments affecting the settlement. How far the project
manager should interfere is a matter for individual judgement and the particular
circumstances, but he should obviously take into consideration any influence he may
have to hasten attention or promote general understanding of the issues – and
attitudes of those involved!
Following settlement, and the contractor’s signature on the account, the original of
the account should be handed to the client for safekeeping.
Final Certificate
The last act! Once more, this should be a matter of procedure which simply requires
the project manager’s observance to ensure it occurs in timely fashion. It is triggered
by the issue of the certificate of making good defects and the presumption that the
final account has been settled. Accordingly, it will confirm the release of the final
portion of retention for payment by the client. Given the contractual significance of
the certificate, it is particularly important that the original of the employer’s copy is
formally recorded as having been passed to the client.
20.7 Claims
Simplistically the effect may be described as delay, expense, and probably a
combination of both. There are no easy guidelines for the project manager as the
circumstances and validity of claims are invariably diffuse, resulting as much from
the basis of tender, corporate policies and attitudes of people within the team, as
from clearly defined problems encountered by the contractor. Hence the task for the
project manager arises well before any claim occurs, in that he must assess, and
continually observe and reassess, attitudes and personalities within the team, as well
as practical difficulties that occur. There is benefit to be gained, however, from
ensuring fundamental monitoring procedures are maintained, such as the checking of
information flow to the contractor, the timing of specialist subcontract orders, the
checking and interpretation of progress reports, and so on. By so doing, when claims
do arise, their validity should be easier to determine and evaluate.
There are three primary considerations for the project manager when a claim is
submitted:
l To ascertain that the claim accords with the terms of the building contract.
l To secure the consultants’ advice on the formal response to be made on behalf

of the client.
l To decide the importance and speed appropriate to negotiating or determining

the claim. In this context it is vital to keep in mind that the client (employer)
and lead consultants are parties to the building contract. Their formal
obligations must be observed.
The last of these three will invariably be the most problematic and the project
manager must come to his conclusion based on the evidence available and the
perception of motives and real concerns. However, I offer the following short
guidelines:
l Strive to have the facts recorded immediately following the claim; they will
never subsequently be more clearly recalled.
l Direct the consultants’ continuing attention to claims received; they are wont
to ignore the less attractive aspects of contract administration.
l Where a claim is obviously legitimate, do not defer or delay. Responsibility is

a two-way process, and the client should acknowledge his part if he expects
performance by the contractor.
l If a claim is considered to have substance, but value is disagreed or will take

time to verify, consider the merit of part payment on account. Again the
theme of responsibility.
Lastly, it is usually incumbent on the contractor to use reasonable efforts to mitigate

a claim. Thus where an extension of time is sought, it may be advisable to reserve
judgement (so far as the contract permits) until the effects can fairly be assessed.
However, the project manager should never allow the mitigation factor to become an
excuse for inaction by the consultants.
21 Tenants – leasing and occupation

The project manager’s involvement with tenants in new developments falls mainly
into two categories: formal commitment under an agreement for lease, and the
practical issues which arise with handing over and the tenant’s fitting out. The need
for co-ordination and control is most marked in developments which are the subject
of multi-occupancy, for example shopping centres. Whilst the following notes are
oriented towards the relationship between the client/project manager and the tenant,
the project manager should include provisions in the client’s main building contract
to facilitate sensible programming and occupation by tenants.
21.1 Agreement for lease

The project manager should, so far as possible, advocate the use of a standard form
of agreement for lease for multi-occupancy developments, even though individual
tenant characters may vary (eg shops, department store, library). Numerous other
parties, consultants and advisors are often involved and thus standardisation is
important for cohesive administration and programming.
Developer’s building obligations

Where a tenant is taking part only of a development, the developer’s building
obligation in respect of all but the demised premises should be expressed in general
terms – eg ‘in accordance with plans and specifications approved by the Council
(development partner)’ or ‘in accordance with the detailed planning consent’.
In respect of the tenant’s demise, the developer’s obligation should be more specific
so as to identify for the tenant what is (and what is not) to be provided. This is best
set out in a specification attached to the Agreement (see below). Plans for
attachment are usually only of small scale sufficient to identify the location and
extent of demise (eg inclusive or exclusive of boundary walls), but are not usually to
such scale or detail as may be needed by the tenant as a basis for preparing
shopfitting drawings. More detailed drawings may, however, be necessary, or
demanded, when dealing with major tenancies such as variety or department stores.
Fitting out drawings

To the extent that the project manager or client may think it appropriate to control
aesthetics or the physical effect of tenant’s works upon the developer ’s structure, the
Agreement should oblige the tenant to submit appropriate drawings and
specifications to the client (but in practice the project manager or architect) for
approval prior to commencement of fitting out. (See also reference to specification
below.)
Works on behalf of tenant

Where it is agreed that the client shall include in his building contract certain works
on behalf of and to be paid for by the tenant, the project manager should ensure that
they are clearly defined on drawings and specifications with reference to the agreed
cost (or basis of calculation). These are then attached to or specifically identified in
the Agreement.
It is conventional for the costs to be reimbursed on the basis of architect’s

certificates issued as the specific works are undertaken, or as a lump sum on
completion (again testified by the architect’s certificate). In either case the
Agreement should specify that payment(s) shall be made within a specific number of
days of the relevant architect’s certificate being provided to the tenant, with interest
at an agreed rate to accrue in respect of any delayed reimbursement. The project
manager should also identify any allowance for fees on the tenant’s works which are
also to be reimbursed and the entire arrangement should be recorded in the
Agreement.
Once settled with the tenant, the project manager should direct the consultants on the
arrangements and certification procedure to be adopted, which should ensure prompt
and effective notice to the tenant so that reimbursements are received in time for the
client to meet his payment obligations to the contractor under the building contract.
Approval fees
Developers’ consultants, especially the architect, frequently demand a separate fee
for approving tenants’ fitting-out drawings. Any such arrangement should be stated
in the Principles of Appointment. When dealing with a multi-tenant building,
particularly a shopping centre, it is advisable to agree a standard fee per unit for this
service. A clause can then be inserted in the Agreement for Lease obliging the tenant
to pay the fee when submitting his fitting-out drawings for approval.
Fitting out (shopfitting certificate)

For a multi-tenant development, it is often impracticable to obtain a certificate of
practical completion for each unit of accommodation substantially in advance of the
overall practical completion date. However, it is usually possible for tenants to be
given occupation for fitting out while the main contract is still in progress, provided
reasonable means of access is available.
The Agreement should therefore state that the developer ’s architect shall certify
(often in the form of a letter) when the unit has been completed sufficient for the
tenant to fit out in accordance with his approved plans and specification. The
architect’s fitting-out certificate should be issued to the client (project manager) and
a copy immediately served upon the tenant.
It is usual to provide a short period (say seven days) in which the tenant may object
to the notice, giving reasons. If the objection notice is accepted, the certification
procedure should be repeated as soon as appropriate; if the tenant’s notice is
disputed, the Agreement should allow either party to refer to arbitration.
The project manager should direct the consultants and main contractor as to the
required arrangements and ensure suitable provisions are incorporated in the
building contract. Responsibility for security and insurance, once a tenant has
possession for fitting out, must also be defined.
Rent-free period
The project manager must clarify the date of commencement of any rent-free period.
Two principal alternatives are the shopfitting certificate date or the certificate of
practical completion for the building.
Trading commencement date

This is pertinent to retail developments and must be distinguished from any rent-free
period. With due regard for the extent of the tenant’s fitting-out works, the
Agreement states the period following issue of the shopfitting certificate within
which the tenant must commence trading. A proviso may be added that the tenant
shall not be so obliged unless the development is complete and open for public
trading and/or that specific external areas, such as car parks, roads and footpaths, are
available for public use.
Building defects
Tenants often require a developer’s covenant to remedy defects in the building
structure. The project manager must be concerned to limit the developer’s liability,
and therefore a response to this may be that the tenant shall draw the developer’s
attention to any defects of which he becomes aware, but the tenant’s rights against
the developer should be limited to such as may be reasonably enforced by the
developer under the terms of the main building contract.
Landlord/tenant specification
Other than drawings which may be attached or referred to in the Agreement, the
developer ’s and tenant’s building responsibilities should be set out in specifications
attached to the Agreement, thus making the tenant’s works as obligatory as the
developer ’s. For ease of understanding, the respective obligations can be set out in a
combined format, of which a typical example is provided in Appendix B1.
For each development the project manager should instruct the consultants to produce
an appropriate standard specification, paying particular regard to the following:
l The description of developer’s works should not be so specific or extensive as

to limit the developer’s freedom to make reasonable changes in design or
materials. It would be impractical to have to refer back to a host of tenants for
approval to changes which have no real impact on the quality of their
premises.
l The statement of developer’s works forms a legal commitment (being
attached to the Agreement). Consequently, the project manager should guard
against setting down superfluous information (eg cubic density of concrete)
which is not essential to a reasonable understanding of the developer’s
provision for the tenant.
l Special care should be taken over the description of services, in particular
those which the tenant is subsequently required to extend and make
connections to (eg sprinklers, fire and burglar alarms). If the tenant has to
utilise a specific item of equipment, or confirm with a particular
manufacturer’s technical systems, this must be clearly stated.
l The project manager and the consultants should be aware that the statement of
tenant’s responsibilities is enforceable under the Agreement and an errant
tenant can be obliged satisfactorily to complete his fitting out. The standard
specification should therefore give a reasonable but comprehensive resume of
the tenant’s responsibilities.
21.2 Fitting out – implementation

Where a single or very limited number of tenancies occur in a new building, the
project manager ’s role in ensuring a satisfactory interface between the developer’s
and tenant’s responsibilities and works can be maintained by informal lines of
communication. However, where multiple tenancies arise, most particularly in
shopping centres, the problems of control are infinitely more difficult and
consequently procedures have to be standardised.
Tenants’ handbook
Apart from the function of controlling a series of individual tenants’ activities, the
project manager must be aware of the need to encourage a positive tenant attitude
towards shopfitting and participation in the centre; also that there is information
beneficial to a tenant which will not necessarily be made known to him through
normal estates and legal channels. The project manager should therefore direct the
production of a tenant’s handbook, containing policy and guidance notes, intended
for distribution to all relevant personnel within the tenant’s organisation, his
designers and shopfitting contractors. The project manager cannot assume that
copies of the tenant’s obligations under the Agreement will have been distributed in
this same fashion – in fact, it is extremely rare to find this degree of awareness in
tenant organisations. Hence reference to these obligations is both relevant and
necessary. The tenants’ handbook does not, however, carry the authority of a legal
document, unless it is specifically included in the Agreement for Lease. One result
of making the tenants’ handbook a legal document is that it will be scrutinised
closely by each tenant’s solicitor and may well extend the legal exchanges. In my
experience the ‘informal’ method works just as well.
Presentation and content of the tenants’ handbook may alter according to
circumstance, but Appendix B2 repeats the ‘Contents’ pages from a shopping centre
example showing the information customarily included in the UK.
Notification of tenancies to consultants and contractors

As soon as practicable – probably at the time lawyers are instructed to issue the draft
agreement for lease – the project manager should notify the consultants and
contractors of each intended tenancy and supply information relevant to shopfitting.
In multi-tenanted buildings this can be done by the use of proformas, an example of
which is shown in Appendix B4.
Certain of the information may not be available when pro-formas are issued, in
which case the project manager should make subsequent periodic checks and reissue
as appropriate. The consultants may be directed to treat receipt of a pro-forma as
their instruction to issue design information to the tenant’s representative.
Control of shopfitters
Experience has shown that this is one of the most perplexing difficulties in finishing
a centre. Shopfitting contractors generally act entirely in accordance with self-
interest and often without regard for the developer ’s works, whether completed or
on-going. The project manager should not place reliance solely on the handbook but
should make specific arrangements for on-site checks, either by arrangement with
the main contractor, by instructing the clerk of works, or by direct monitoring.
Damage by shopfitters is not only aggravating, it is also usually very difficult to find
the culprit. The project manager must maintain a strict discipline on site, confining
each shopfitting contractor solely to the respective tenant’s demise, including
unfixed materials. Deliveries should be made only via the service ways, and vehicles
should be removed from site immediately unloading is completed. Where shopfronts
occur, the shopfitter should provide a dustproof hoarding on the shopfront line, and
only be permitted to step this forward for installation of the shopfront on prior notice
and agreement with the project manager and client’s contractor.
Shopfitting completion
It is often a prudent requirement to insist that the tenant secures a developer’s
certificate stating that his shopfitting works have been satisfactorily completed. This
enables a check to be made against the previously approved shopfitting drawings,
and to ensure that connections to the development’s system (eg sprinklers, fire
alarms etc) are functioning and drains are not blocked by waste shopfitting material.
The tenant’s obligation to secure the developer’s certificate can be incorporated in
the terms of the Agreement of Lease.
22 Commissioning and management

transfer
As with all previous phases, it is important that adequate forethought be given to this
final stage in the development process. The design of the development will already
reflect certain decisions on the administration of the building but the project
manager must check that the appropriate management functions are fully considered
and in place, albeit he does not bear the long-term responsibility.
22.1 Management officer

Define who is to be responsible for management policy and whether this is to be
directed from the client’s office, by managing agents, or by the resident management
officer at the development.
22.2 Management systems

Provide the management officer with a summary of the design and development
policy to date in respect of all regular and periodic functions including:
l Cleaning
l Building maintenance
l Refuse collection
l Security
l Reception facilities
l Postal deliveries
l Landscape care.

Provide copies of any utility company supply agreements already entered into on
behalf of the client and point out those yet to be completed.
Identify requirements for care and running of plant and machinery, and whether this
is to be administered by a resident engineer, through a maintenance agreement with
a service company, or a combination thereof. If a resident engineer is to be
employed, adequate time must be allowed for training on the specific equipment
installed in advance of responsibility being transferred – usually at the date of
practical completion.
Where a service company is to be employed, time must be permitted for competitive

quotations to be obtained and a contract completed before handover.
Define the extent to which the M & E subcontractor responsible for installation will
need to attend the development during the defects period to carry out balancing and
performance checks.
Obtain copies of the maintenance manuals for use by the management officer and
services engineers.
22.4 Record drawings, warranties, guarantees and

product literature
This material should be collated by the consultants (see Appendix A, Principles of
Appointment) and include documents, drawings etc supplied by specialist
subcontractors. It may be considered preferable for drawings to be provided as
negatives, for the convenience this affords in obtaining further and fresh copies in
the future. Sets should then be passed to the client and management officer.
22.5 Centre manager

In a complex development where the appointment of a centre manager is envisaged,
the timing of recruitment and appointment should be considered even at the pre-
contract stage. Although it is sometimes impractical to make the appointment until
near to the opening date, the guidance of an experienced centre manager – if possible
the person who is to take up the permanent appointment – usually proves invaluable
to the design and arrangement of management systems. An early appointment also
provides time for the appointee to prepare management policies, conduct interviews
for staff and run through training procedures in good time. The centre manager will
also have time to make the acquaintance of the local Chamber of Trade, the Police
Superintendent etc and thus establish confidences important to the successful
integration of the centre into the local community.
22.6 Service charge

In conjunction with the management officer, the project manager should obtain
estimates of the anticipated running and maintenance costs and agree the appropriate
basis for apportionment amongst tenants (eg rateable value, floor area, etc).
The project manager should distinguish between the services to be metered and
charged direct to tenants, and those which are metered on the main incoming supply
only, with responsibility for apportionment and obtaining reimbursement from
tenants resting with the management officer. The project manager should define and
advise the management officer on the maintenance and insurance responsibilities for
different areas of a development such as common parts, demised areas, dedicated
and adopted highways.
23 Monitoring and administration

Throughout this Companion Guide I have referred to monitoring and administration
procedures to which the project manager may have recourse according to the
demands of any individual project. Effective control of a development is, however,
based also on simple and practical procedures which direct the project manager’s
own attention, and that of the development team around him, towards an orderly
assessment of priorities and optimum contribution of effort.
By comparison with most managers in industry, the project manager of a
commercial development has perhaps an unusual bias in that he is the pivotal control
of many separate and individually appointed external organisations brought together
in a combination which will survive only the period of a single development project.
Thus the project manager should preferably use methods which have gained
common understanding within the development industry and which are of broadly
universal application. The following are mechanisms which can be instituted by the
project manager, aiding his personal review and evaluation of a development at any
stage and fostering the ties between himself and the development team.
23.1 Programme
Development bar chart and/or network
Prepared by the project manager with contributions from other team members
defining all critical or major events (eg site acquisition, planning permission,
settlement of pre-lettings, exchange of funding agreement) and including primary
elements from the consultants’ detailed design programme (eg building regulation
submission).
A network format can be particularly useful in the early stages of a project, because
it depicts the separate activities of site ownership, finance, pre-letting and design,
signifies the priorities as well as the linkage. It is vital for the project manager to
convey to both client and consultants the interdependence of events, and the risk
(particularly financial commitment) that can arise if the appropriate sequence is
ignored.
Consultants’ design programme

Produced by the consultants, usually led by the architect, and with a contribution
from the contractor if appointed. Usually in bar chart form, showing the timing and
relationship of information production between each consultant, and any design
liaison with specialist subcontractors.
Preparation of the Bills of Quantities is identified, followed by the period allowed
for tendering and any subsequent negotiation, and the client’s decision to proceed.
Frequently, for the construction programme to proceed at optimum speed, it is
necessary to place orders in advance of the construction start date. Typically, this
might be for reinforcing or structural steel, or design and fabrication of external
cladding. Dates for tendering and placing orders for these elements can be shown on
the programme, serving to highlight the priority attention needed and the client’s
capital commitment.
Client decision schedule

A summary usually produced jointly by the project manager and consultants,
defining the issues which must be approved by the client and/or the project manager
and the dates by which they must be achieved (eg external cladding treatment,
entrance hall finishes).
Building contract programme

Normally presented as a bar chart and produced by the contractor; it may form part
of his formal tender. The project manager should seek the consultants’
acknowledgment or otherwise that the programme is realistic. The contractor should
submit regular progress reports from which the project manager can transfer
information on to the programme so as to gain an overall impression of progress and
consider the significance of those items which vary from the forecast.
Critical path analyses

The development programme, consultant’s design programme, and building contract
programme are all capable of production in this alternative form. Whether desirable
or beneficial must depend on the demands of the project and the attitude of the team;
my experience in commercial developments is that they prove time-consuming to
produce, are rarely understood by anyone except their author, are usurped by shifts
in client policy, and quickly become ignored by everyone. I suspect they are a valid
tool and discipline in technically complex projects such as processing plants and
refineries, but for a commercial development the project manager must first be sure
of the competence of his team to interpret and utilise critical path programmes.
Schedules of information
l Bills of Quantity . To aid production of the Bill the quantity surveyor should
circulate a schedule showing dates by which design information is required
from consultants to enable billing to take place.
l Construction drawings, specification, schedules etc. Customarily in the

UK, the consultants have preferred to let or ask the contractor to produce a
schedule of dates by which information outstanding at the construction start is
required. I recommend the alternative. The project manager should direct the
consultants to issue such schedules of their own volition, before construction
starts, preferably to be included in the tender information documents. It is the
consultants who know the scope of their work outstanding, not the contractor
(who is, effectively, second guessing), and if the dates given do not meet the
contractor’s desired programme he can advise accordingly.
23.2 Team directory

A document containing information about all persons principally involved in a
project, and issued by the project manager to everyone in the development team.
(Not least, it may be appreciated by secretaries.) The information may be
summarised as:
l Organisation name
l Each individual’s name, and
¡ his project role, and
¡ his position in organisation (eg partner), and
¡ the address and telephone number of his office.
If appropriate, the team directory can be supplemented by marking those who are to
attend certain regular meetings, and those who are on the circulation list for minutes,
or other regular distributions. Can be included in the team directory.
23.3 Organisation chart

Particularly for the project manager ’s own use, but also for discussion with the client
and members of the development team as appropriate, the project manager should
set down on paper the formal chain of communication/instruction within the team,
and note any informal links likely or necessary for the development to evolve
effectively. Can be included in the team directory.
23.4 Site personnel
The terms of reference of the site personnel (eg site architect, resident engineer),
their relationship to each other, the contractor and the consultants, and particularly
their responsibilities for issuing instructions, should be set down in a statement
collated and issued by the architect. This can be issued to the contractor or
incorporated in the building contract.
23.5 Legal agreements

Retaining a memorised record of the clauses of every agreement that affects a
project, throughout its development life, is clearly impractical. A useful aid,
therefore, is for the project manager to prepare his own synopsis of every agreement,
covering only those clauses which have a direct bearing on the conduct of the team
and the development process. Each clause note should be preceded by its page and
clause number, so it is then easy to refer to the appropriate part of the agreement for
the full text if required.
23.6 Administration
Meetings
The project manager should identify the various meetings to be held regularly; their
purpose, frequency, personnel attendance and venue. Decide on the responsibilities
or chairmanship and taking of minutes for each respective meeting – also the
circulation of minutes. The project manager should insist on minutes being issued
within 48 hours of each meeting.
Recording and filing of plans and specifications

Institute an orderly system of plan and specification filing (eg by drawing number)
and obtain from the architect and other consultants as necessary a copy of their
drawing schedule. For documents recording special approvals (eg planning
permission), or giving definition (eg compulsory purchase order or existing network
of site services), maintain specially labelled packets with copies of the relevant
documents and plans. (NB: It is also suggested that such packets be labelled ‘not to
be removed from the office’.)
Statutory approvals
The originals of all consents (eg planning permission) should be obtained from the
consultants and passed to the client or his solicitor with specific instruction that these
be placed with the title documents for the development.
Project records
Maintain and update at, say, quarterly intervals, a ‘project record’ in the form shown
at Appendix C which provides a synopsis of the development for the project
manager and any principals to whom he must report, together with acting as a simple
check on the progress to date.
23.7 Architect’s instructions and variation orders

Copies of all AIs and VOs should be automatically sent to the project manager, but
before this the project manager should establish with the architect the latter’s
automatic discretion for issuing these contract instructions. (NB: The project
manager should be careful not to infringe the architect’s responsibility for issuing
instructions under the building contract.)
Provisional sums
Regularly review those items identified in the Bills of Quantity as provisional sums,
with the purpose of ensuring that tenders are obtained, reviewed against the
allowance, and instructions issued within the agreed programme.
Nominated and specialist subcontractors

The monitoring procedure is similar to that for provisional sums, but due time must
be allowed for tender evaluation and negotiation prior to contract instruction.
Appendix C3 gives the outline of a proforma which can be updated at, say, monthly
intervals by consultants and contractor and reported to the project manager.
Checklists
Probably the most familiar term of project management jargon, checklists perform a
useful function, and should be created to serve particular needs or aspects of control
(eg responsibilities under legal agreements, information flow to contractor).
23.8 Finance
Speculative development budget
By reference to the pre-contract development programme, negotiate limits to
speculative fee expenditure with each consultant, and prepare a cash flow of these
costs together with others such as planning permission fees, site surveys etc.
Cost record
The project manager should maintain his own ledger in which is entered all
expenditure by reference to individual headings such as architect’s fees, tenant
reimbursements etc, together with a summary of gross and net expenditure.
Construction cost
Quantity surveyors and contractors are well versed in the practice of preparing
frequent reports identifying changes known and anticipated in the contract sum.
Usually these will be represented under headings such as Provisional Sums,
Nominated and Specialist Subcontractors, and Architects’ Instructions. It is usually
only necessary for the project manager and quantity surveyor to agree on the
presentation format; the principle is well understood. The project manager should
ensure a copy of each report is given to the respective consultants, as they are
effectively accountable for any extras (or savings) shown, including those springing
from a client’s change of mind!
Development appraisal
At regular intervals, say quarterly, produce an appraisal and cost summary in the
form shown at Appendix C2, which identifies the client’s approved budget, the
comparative anticipated totals of development cost at previous current quarters, and
the aggregate payment made to date. This enables the project manager to highlight
any increases or savings in cost and their impact on overall viability; also to check
that payments are in line with progress to date on the project.
Cash flow
At commencement of the building contract the quantity surveyor and contractor
should jointly prepare the anticipated monthly cash flow of building certificates,
which according to need should be adjusted at subsequent regular intervals to reflect
actual payments and apportionment of the amount outstanding. The project manager
can in turn use this information as a basis for a development cash flow reflecting
fees, acquisition costs and finance, etc.
The project manager should treat the comparison between forecast and actual
expenditure as a basis for reviewing effective progress and the general wellbeing of
the development.
23.9 Computers and word processors

Virtually all the procedures described in this chapter are capable of preparation,
printing and storage using generally available software and word processing
facilities. This makes the task of analysis and production infinitely quicker and more
accurate, as for example in the calculation of future interest charges based on a cash
flow.
Alternative forms of presentation are also available, some of which create visual
interpretation. Forecast and actual cash flow can be converted into graph form.
Heads of development expenditure can be shown as pie diagrams. The extent of
computer use is a matter for individual preference; clearly they can play a very
useful role. I do think it important, however, for the project manager to regard
computers only as a tool. There is a potential danger of too much analysis.
Reading list
RECOMMENDED READING
Topping R and Cadman D (1995) Property Development (4th edn) Spon Press,
ISBN 0419202404.
Latham M (2002) Code of Practice for Project Management for Construction and
Development (3rd edn) Longman, ISBN 0582276802.
FURTHER READING
Egan J (1998) Rethinking Construction, DETR, ISBN 1851120947.
Franks J (1998) Building Procurement Systems (3rd edn) Longman, ISBN

0582319269.
Latham M (1994) Constructing the Team, HMSO: London, ISBN 011752994X.
Mintzberg H (1990) The Structuring of Organisations , Prentice Hall, ISBN

0138537712.
Turner R (1995) The Commercial Project Manager , McGraw-Hill, ISBN

0077079469.
Walker A (2002) Project Management in Construction (4th edn) Blackwell Science,

ISBN 063205736X.
Appendices
Contents
1. Appendix A: Drafts of consultant appointments
2. Appendix B: Developer/tenant outline specification; Tenants’ handbook

– contents; Letting memorandum; Shopfitting pro forma
3. Appendix C: Project record; Quarterly financial appraisal; Cash flow;

Nominated specialist status report
4. Appendix D: Health and Safety: Construction (Design and Management)

Regulations 1994 – Project record addendum; Competency and resource
enquiries
A project manager’s guide to development strategy Paper 0143 131
Appendix A:
Drafts of consultant appointments
A1 Architect’s appointment
A2 Quantity surveyor’s appointment
A3 Structural engineer’s appointment
A4 Mechanical and electrical services consultant’s appointment
PROJECT TITLE APPENDIX A1
Architect’s appointment Date
1 Project
Address/name of project; form of development; approximate content.
2 Client
Name and address.
3 Consultant
Name and address.
4 Service
4.1 1 The Consultant’s services shall include all those specified in Schedule 2 of the RIBA’s
Standard Form of Agreement for the Appointment of an Architect (the edition current at the
date of this Agreement) as are necessary for the project.
4.1.2 Specialist sub-contractors and suppliers. The Consultant shall provide written recommendation
to the Client wherever the appointment of a specialist subcontractor or supplier is proposed
and shall include advice as to the division of design and installation responsibilities between
the Consultant, specialist contractor and/or Main Contractor which will apply in each
instance.
4.1.3 Before commencing Work Stage E of the RIBA Standard Form of Agreement the Consultant
will prepare a programme identifying for each building element the number of drawings,
specifications, schedules or other information to be prepared, the timing of its issue and the
manpower resources that will be committed at each stage of the programme. The programme
shall also specify any Client decisions required, statutory approvals needed, and any other
significant issue which may affect information production. Where information for construction
is not included in a tender invitation the Consultant shall provide the tendering contractor(s)
a detailed Information Issue schedule specifying the dates this will be provided.
4.1.4 The consultant will incorporate and coordinate in the programme, and Information Issue
schedule, comparable information from other members of the consultant team, relevant to
their discipline.
132 Paper 0143 A project manager’s guide to development strategy
4.1.5 The consultant shall satisfy himself that each provisional and prime cost sum contained in the
Bills of Quantity prepared by the Quantity Surveyor, is adequate for the intended design.
4.1.6 Prior to tender action the Consultant shall provide the Client with a schedule of floor areas,
together with a set of drawings showing the principal internal dimensions of all leasable space.
4.1.7 The Consultant will advise, act for, and represent the Client in respect to any claim(s)
presented by the Contractor, or specialist sub-contractor(s).
4.1.8 Deleterious Materials:-

The Consultant Warrants that he has exercised, and will continue to exercise, reasonable skill
and care to see that, unless authorised by the Client in writing or, where such authorization
is given orally, confirmed by the Consultant to the Client in writing, none of the following has
been or will be specified by the Consultant for use in the construction of the Project:
a high alumina cement in structural elements;
b woodwool slabs in permanent formwork to concrete;
c calcium chloride in admixtures for use in reinforced concrete;
d asbestos products
e naturally occurring aggregates for use in reinforced concrete which do not comply with
British Standard 882; 1983 and/or naturally occurring aggregates for use in concrete
which do not comply with British Standard 8110: 1985.
f any other materials generally known to be deleterious.
4.1.9 Health and Safety:-
4.1.9.1 The Consultant will, prior to the payment of any part or the whole of the fee (Clause 6),
whether or not this Agreement has been executed, provide information to the Client to
demonstrate his competence and resources to comply with statutory requirements applicable
to the Consultants discipline.
4.1.9.2 During the continuance of this appointment, the Consultant will maintain the expertise and
resources needed to perform all statutory requirements applicable to the Consultant’s
discipline and to provide evidence of this upon request by the Client.
4.1.9.3 The Consultant will provide to the Planning Supervisor (if appointed) such information and
assistance as the Planning Supervisor may require to perform his duties according to statutory
requirements.
4.1.9.4 Without prejudice to the provisions of Clause 4.6, the Consultant will provide or procure any
relevant information required for the Health & Safety File, to be produced on or before the
certificate of practical completion for any relevant structure (as defined by the CDM
Regulations 1994).
4.1.10 Latent Defects:-

If requested by the Client, the Consultant shall provide information and assistance relevant to
the Consultant’s discipline, to enable the Client to make a proposal for, and meet the terms of,
a policy of insurance.
4.2 Development Partner (eg Fund, Local Authority. Purchaser or Tenant)

4.2.1 Upon instruction from the Client the Consultant shall provide any drawings, specifications
and other architectural information required by a Development Partner, its agents and/or
Consultants, and will liaise with these parties according to the direction of the Client.
4.2.2 If requested by the Client, the Consultant shall provide each and any Development Partner a
warranty in the form published by the British Property Federation. Each warranty to include
the following terms:
a Number of permitted assignments - each warranty.......;
b Professional indemnity insurance £..:
c Limitation of liability - commencement of action. ..years from date of practical

completion.
4.3 Letting
Provide any architectural drawings and specifications that may be required in connection with
the letting of the project. The Consultant will have regard for the requirements of the Property
Misdescriptions Act 1991.
4.4 Legal
Provide any architectural drawings, specifications or other information that may be required
for any legal documents.
4.5 Tenant works/fitting out
4.5.1 Liaise with tenants and their consultants in resolving any requirements to be included in the
Client’s building contract. Where the Client is to obtain reimbursement from a tenant for the
costs of any works, the Consultant shall provide appropriate certification.
4.5.2 Assist the Client in preparing a Tenant’s Handbook if appropriate and/or provide plans and
any other architectural information on which tenants and their Consultants may base fitting
out proposals. The Consultant shall also monitor the works to ensure they are implemented
according to approvals given on behalf of the Client.
4.6 As-built record drawings/operating and maintenance manuals/ guarantees/maintenance

contracts
The Consultant shall provide two sets of all relevant material, including that of any specialist
sub-contractor, within two months of practical completion, including:
a All drawings information in the form of negatives unless otherwise agreed.
b For each and all architectural elements:

i the specification and/or manufacturer’s reference
ii the anticipated life
iii written guidance on the cleansing, maintenance and repair.
c All available product guarantees and test certificates.
The information required by items (b) and (c) above are to be presented in the form of an
owners handbook.
The Consultant will advise and assist in the arranging of any maintenance contracts.
5 Copyright
The copyright in all drawings, reports, models, specifications, calculations and other documents
and information, prepared by or on behalf of the Consultant in connection with the project,
shall remain vested in the Consultant but, subject to the Consultant having received payment
of any fees due under this appointment, the Client shall have licence to copy and use such
documents and to reproduce the designs and content of them for any purpose related to the
project following its completion including, but without limitation, the construction, completion,
maintenance, letting, promotion, advertisement, reinstatement, refurbishment and repair of
the project. Such licence shall enable the client, and its appointee, to copy and use the
documents for the extension of the project but such use shall not include a licence to reproduce
the designs contained in them for any extension of the project. The Consultant shall not be
liable for any use by the Client, or its appointee, of any of the documents for any purpose other
than that for which the same were prepared by or on behalf of the Client.
6 Fee
(To be calculated either;
a As a specified percentage of the initial contract sum or final account value or
b As a fixed sum.)
The fee is inclusive of expenses unless otherwise defined.
7 Site architect clerk of works (if appointed)

Site architect: Payment for any site personnel is incorporated in the principal fee.
Clerk of works: Payment by the Client to be based on salary cost and other properly
attributable expenses.
8 Terms of payment
8.1 The period(s) prior to the Client’s decision fully to proceed with the project
(The extent of commitment(s) to be stated having regard to:
a Time.
b Form of work to be completed, eg. feasibility studies, concept design, production

drawings.
c Manner of payment, (eg monthly tranches, lump sum on completion) . )
Payments are inclusive of expenses and site personnel.
8.2 From Client’s decision fully to proceed
8.2.1 The full fee terms as described in 6. above to apply and be paid as follows:
(Statement of basis on which fee to be paid up to Certificate of Practical Completion (eg. equal
monthly/quarterly tranches, or fixed proportion of fee for differing work stages).
8.2.2 Payment of fees in the manner prescribed, is conditional upon the Consultant adhering to his
commitments shown in the programme and Information Issue schedule.
8.2.3 5% of the Consultant’s fee to be paid immediately after issue of the Final Certificate.
9 Suspension or abandonment of project
Payment due to the Consultant shall be as follows:
9.1 If during the period(s) described in 8.(1) the sum(s) specified in that clause for work up to the
time at which suspension or abandonment occurs.
9.2 If during the stage described in 8.(2) the measure of payment will be by agreement, and have
regard to work completed in relation to the programme and Information Issue schedule
(Clause 4.1.3).
10 Professional indemnity insurance
The consultant shall maintain professional indemnity insurance in the amount of not less than
£..for any one occurrence or series of occurrences arising out of any one event for a period of
..years from the date of practical completion of the building contract for the project, provided
always that such insurance is available at commercially reasonable rates. As and when it is
reasonably requested to do so by the Client, the Consultant shall produce for inspection,
documentary evidence that its professional indemnity insurance is being maintained.
(NB. This clause, and clause 4.2.2, may, if the Consultant wishes, be omitted from the final
form of this appointment, provided the Consultant confirms the same commitments to the
Client in a side letter at the date the appointment is signed.)
11 Consultant team
11.1 The Consultant acknowledges and agrees that the other members of the Consultant Team shall
be:-
Planning Supervisor:
Structural Engineer:
Mechanical and Electrical Services Consultant (.... Duties):
Quantity Surveyor:
Project Manager:
and such other or further appointments as the Client shall from time to time consider
necessary.
12 Signature
In Witness whereof this agreement was executed as a Deed and delivered on the above date.
Executed on behalf of
the Architect __________ __________
Witness
(NB: All partners, or __________ __________ (n.b for

two directors, or one Address partnership
director and company __________ __________ only)
secretary.)
Executed on behalf of __________ __________

the Client
__________ __________
__________
(NB: Same signature requirements as for Consultant)

Design and build – Addendum to consultants’ appointments
The following changes shall be made to the appointments where procurement is to be by

Design and Build.
11 Add “Employer Agent”.
12 Insert new clause in the appointments of those consultants who are to be novated to the
contractor.
Novation
12.1 The Consultant acknowledges and agrees that this Agreement is to be novated so that ..(Client
name) is replaced as Client by the Contractor~ when appointed. All other terms and conditions
of this Agreement shall continue in full force and effect. (Client name..) and (..Consultant
name) shall each be responsible to the other for obligations arising under this Agreement, up
to the time and date of Novation.
12.2 Subsequent to Novation it is agreed that the Consultant will inform (..Client name):
1 If the Consultant considers any aspect of the detailed or construction design to conflict
with the drawings and specifications previously approved by (..Client name..) and/or
a Development Partners, or with Planning Permission or Building Regulation ap-
proval.
2 If the Consultant considers the Contractor’s working methods or quality of workman-

ship to be not in accordance with the contract requirements or good practice.
3 If the Consultant considers the building is not suited for Practical Completion at the
time this is sought by the Contractor.
4 If the Consultant considers the snagging or defects lists prepared by the Contractor are
insufficient.
Quantity surveyor’s appointment Date
1 Project
Address/name of Project; form of development; approximate content.
2 Client
Name and address.
3 Consultant
Name and address.
4 Service
4.1 The Consultant’s service will be in accordance with Scale (?) of the Professional Charges of
the Royal Institution of Chartered Surveyors. (Define whether this includes air-conditioning,
heating, ventilating and electrical services as provided in paragraph 2.2 of Scale 36.) The
Consultant will advise, act for, and represent the Client/ Project Manager in respect to any
claim(s) presented by the Contractor, or specialist sub-contractor(s).
4.1.2 The following clause appears in the Architect’s Appointment:
‘Before commencing Work Stage E of the RIBA Standard Form of Agreement, the Consultant
specifications, schedules or other information to be prepared, the timing of its issue, and the
manpower resources which will be committed at each stage of the programme. The programme
significant issue which may affect information production. Where any construction information
a detailed Information Issue schedule specifying the dates this will be provided. The
Consultant will incorporate and coordinate in the programme, the Information Issue schedule,
comparable information from other members of the consultant team, relevant to their
discipline.’
The Consultant will coordinate his service with the Architect and provide information to him
to enable production of the programme and Information Issue schedule.
4.1.3 Health and Safety:-
4.1.3.1 The Consultant will, prior to the payment of any part or the whole of the fee Clause 6), whether
or not this Agreement has been executed, provide information to the Client to demonstrate his
competence and resources to comply with statutory requirements applicable to the Consultants
discipline.
resources needed to perform all statutory requirements, applicable to the Consultant’s
assistance as the Planning Supervisor may require perform his duties according to statutory
requirements.
4.1.3.4 The Consultant will include in the terms and conditions of any construction contract for a
structure (as defined by the CDM Regulations 1994), that the contractor will provide all
information for which he is responsible, that is required for the Healthy & Safety file, as a
precondition of the issue of a certificate of practical completion.
4.2 Development Partner (eg. Fund, Local Authority, Purchaser or Tenant)
4.2.1 Upon instruction from the Client the Consultant shall provide information, including Bills of
Quantity, required by a Development Associate, its agents and/or Consultants, and will liaise
with these parties according to the direction of the Client.
4.2.2 If requested by the Client, the Consultant shall provide each and any Development Partner a
warranty in the form published by the British Property Federation. Each warranty to include
the following terms:
a Number of permitted assignments - each warranty
c Limitation of liability - commencement of action. ...years from date of practical

completion.
4.3 Letting
Provide cost advice, area calculations or other related information that may be required in
connection with the letting of the project. The Consultant will have regard for the requirements
of the Property Misdescriptions Act 1991.
4.4 Legal
Provide Bills of Quantity, and any cost or measurement information that may be required for
any legal document.
Liaise with tenants and their consultants in agreeing the value of any tenant requirements to
be incorporated in the Project; where reimbursement is to be obtained by the Client, provide
separate valuations.
4.6 As-built record drawings, operating and maintenance manuals, product guarantees. warranties.
test certificates and maintenance contracts
4.6.1 The appointments of the design consultants contain the following obligations upon them:
“..provide two sets of all relevant materials, including that of any specialist sub-contractor,
within two months of practical completion (services to be at practical completion) including:-
b For each and all (architectural/structural/services) elements:-

i the specification and/or manufacturer’s reference,

ii the anticipated life,
iii written guidance on cleansing, maintenance and repair.
c All available product guarantees and test certificates.
d (Services only). Operating and maintenance manuals. “
4.6.2 The Consultant shall have regard to these requirements, and the need for warranties from all
specialist sub-contractors, in the procuring, vetting and completion of all contract works, and
liaise with other members of the Consultant Team.
4.7 Insurance
Advise the Client on the value of any insurances to be placed, particularly at the time of
practical completion.
4. 8 Capital Allowances
If requested by the Client, advise the value of any works qualifying for tax allowances.
4.9 Consulting Engineers’ fees
If requested by the Client the Consultant shall advise the value of structural and/or mechanical
and electrical works within the contract in a form enabling fees for those disciplines to be
calculated according to the code of the Association of Consulting Engineers.
5 Copyright
The copyright in all reports, specifications, Bills of Quantities, calculations and other
documents and information, prepared by or on behalf of the Consultant in connection with the
project, shall remain vested in the Consultant but, subject to the Consultant having received
payment of any fees due under this appointment, the Client shall have licence to copy and use
such documents and to reproduce the designs and content of them for any purpose related to
the project following its completion including, but without limitation, the construction,
completion, maintenance, letting, promotion, advertisement, reinstatement, refurbishment
and repair of the project. Such licence shall enable the client, and its appointee, to copy and
use the documents for the extension of the project but such use shall not include a licence to
reproduce the designs contained in them for any extension of the project. The Consultant shall
not be liable for any use by the Client, or its appointee, of any of the documents for any purpose
other than that for which the same were prepared by or on behalf of the Client.
6 Fee
To be calculated either;
a In accordance with RICS Scale (?), Category (?) or,
b As a percentage of the initial contract sum or final account value or,
c As a fixed sum.)
7 Resident site quantity surveyor
Payment for any site personnel is incorporated in the principal fee.

8 Terms of Payment
8.1 The period(s) prior to the Client’s decision fully to proceed with the Project
a Time.
b Stage of work to be completed (eg. feasibility studies, concept design, production

drawings).
c Manner of payment (eg. monthly tranches, lump sum on completion) . )
monthly/quarterly tranches, or fixed proportion of fee for differing work stages).)
commitments described in the programme and Information Issue schedule (paragraph 4.2).
9.1 Payment due to the Consultant shall be as follows:
9.1.1 If during the period(s) described in 8.(1) the sum(s) specified in that clause for work up to the
time at which suspension or abandonment occurs.
9.1.2 If during the stage described in 8.(2) the measure of payment will be by agreement, and have
regard to the provisions of the RICS Scale of Charges.
10.1 The consultant shall maintain professional indemnity insurance in the amount of not less than
10.2 (NB. This clause, and clause 4.2.2, may, if the Consultant wishes, be omitted from the final
11 Consultant Team
The Consultant acknowledges and agrees that the other members of the Consultant Team shall
be:
Architect:
Project Manager:
necessary.
12 Signature
the Quantity Surveyor __________ __________
Witness
(n.b. All partners, or __________ __________ (n.b for

secretary.)

the Client
__________ __________
__________

Design and Build – Addendum to consultants’ appointments

Design and Build.
11 Add “Employer Agent” .
contractor.
Novation
name) is replaced as Client by the Contractor, when appointed. All other terms and conditions
name) shall each be responsible to the other for obligations arising under this Agreement, up
12.2 Subsequent to Novation it is agreed that the Consultant will inform (..Client name....):
1 If the Consultant considers any aspect of the detailed or construction design to conflict
with the drawings and specifications previously approved by (..Client name..) and/or
a Development Partners, or with Planning Permission or Building Regulation ap-
proval.
2 If the Consultant considers the Contractor’s working methods or quality of workmanship

to be not in accordance with the contract requirements or good practice.
3 If the Consultant considers the building is not suited for Practical Completion at the
time this is sought by the Contractor.
insufficient.
Structural engineer’s appointment Date
1 Project
Address/name of project; form of development; approximate content.
2 Client
Name and address.
3 Consultant
Name and address.
4 Service
4.1.1 The Consultant’s service will be in accordance with Agreement 3 of the ACE Conditions of
Engagement (current edition) including such additional services described in Clause 7., as
may be necessary. (Define whether service includes design of below ground drainage, and
checking of structural worthiness of designs by Architect and/or specialist sub-contractors;
also supervision of their on-site construction.)
‘Before commencing Work Stage E of the RIBA Standard Form of Agreement, the Consultant
specifications, schedules or other information to be prepared, the timing of its issue, and the
manpower resources which will be committed at each stage of the programme. The programme
significant issue which may affect information production. Where any construction information
Consultant will incorporate and coordinate in the programme, the Information Issue schedule,
comparable information from other members of the Consultant team, relevant to their
discipline.’
The Consultant will coordinate his service with the Architect and provide information to him
4.1.3 The Consultant will advise, act for, and represent the Client/Project Manager in respect to any
claim or claims presented by the Contractor, or specialist sub-contractor(s), in so far as this
relates to the Consultant’s service and expertise.
4.1.4 Deleterious Materials:-

d asbestos products
4.1.5 Health and Safety: -
4.1.5.1 The Consultant will, prior to the payment of any part or the whole of the fee (Clause 6),
requirements.
relevant information required for the Health & Safety File, to be produced on or before the
Regulations 1994).
4.2 Development Partner (eg Fund. Local Authority Purchaser or Tenant)
4.2.1 Upon instruction from the Client the Consultant shall provide any drawings, specifications,
calculations or associated information required by a Development Partner, its agents and/or
Consultants, and will liaise with these parties according to the direction of the Client.
4.2.2 If required by the Client, the Consultant shall provide each and any Development Partner
warranty in the form published by the British Property Federation.
4.2.3 Each warranty to include the following terms:
a Number of permitted assignments - each warranty.......;
b Professional indemnity insurance £...
c Limitation of liability - commencement of action. ..years from date of practical

completion.
4. 3 Letting
Provide drawings, specifications or other structural engineering information that may be

required in connection with the letting of the project. The Consultant will have regard for the
requirements of the Property Misdescriptions Act 1991.
4.4 Legal
Provide drawings, specifications or other structural information that may be required for any
legal documents.
Liaise with tenants and their Consultants in resolving any requirements to be included in the
Client’s building contract.
4.5.2 Assist the Client in preparing a Tenants’ Handbook if appropriate, and/or provide drawings
and any other structural engineering information on which tenants and their Consultants may
base fitting out proposals. Comment upon and recommend approval of any tenant structural
proposals; also monitor the works to ensure they are implemented according to the approvals
given by or on behalf of the Client.
4.6 As-built record drawings/operating and maintenance manuals/guarantees and contracts
The Consultant shall provide two sets of all relevant material, including that of any specialist
sub-contractor, within two months of practical completion, including:
b For each and all structural elements:

i the specification and/or manufacturer’s reference
ii the anticipated life
iii written guidance on the cleansing, maintenance and repair.
All available product guarantees and test certificates.
The information required by items (b) and (c) above are to be presented in the form of an
owners handbook.
The Consultants will advise and assist in the arranging of any maintenance contracts.
5 Copyright
The copyright in all drawings, reports, models, specifications, calculations and other documents
project following its completion including, but without limitation, the construction, completion
6 Fee
(To be calculated either:
a In accordance with the provisions of Agreement 3, or
b As a percentage of the initial contract sum or final account value (excluding the value
of any finishes of a fitting out character, eg carpets, canteen equipment) .)
c As a fixed sum.)
7 Resident Engineer (if appointed)
Payment by the Client to be based on salary cost and other properly attributable expenses.
8 Terms of payment
8.1 The period(s) prior to the Client’s decision fully to proceed with the Project
a Time.
b Form of work to be completed, eg. feasibility studies, concept design, production

drawings
c Manner of payment, (eg. monthly tranches, lump sum on completion).)
Statement of basis on which fee to be paid up to Certificate of Practical Completion (eg. equal
commitments shown in the programme and Information Issue schedule (para.4.1.2).
9.1.1 If during the period(s) described in 8.(1) the sum(s) specified in that clause for work up to the
time at which suspension or abandonment occurs, or some other specified figure.
9.1.2 If during the stage described in 8.(2) the measure of payment will be by agreement, and have
regard to the provisions of the ACE Agreement 3.
10 Professional Indemnity Insurance
The Consultant shall maintain professional indemnity insurance in the amount of not less than
years from the date of practical completion of the building contract for the project, provided
11 Consultant Team
The Consultant acknowledges and agrees that the other members of the Consultant team shall
be:
Architect:
Quantity Surveyor:
Project Manager:
necessary.
12 Signature
the Structural Engineer __________ __________
Witness
(NB: All partners, or __________ __________ (NB: for

secretary.)

the Client
__________ __________
__________


Design and Build.
contractor.
Novation
name ) shall each be responsible to the other for obligations arising under this Agreement, up
12.2 Subsequent to Novation it is agreed that the Consultant will inform (..Client name ....):
1 If the Consultant considers any aspect of the detailed or construction design to conflictwith
the drawings and specifications previously approved by (..Client name..) and/or a
Development Partners, or with Planning Permission or Building Regulation approval.
2 If the Consultant considers the Contractor’s working methods or quality of workmanship

to be not in accordance with the contract requirements or good practice.
3 If the Consultant considers the building is not suited for Practical Completion at the time
this is sought by the Contractor.
insufficient.
Mechanical and electrical services consultant’s appointment Date
1 Project
Address/name of Project; form of development; approximate content.
2 Client
Name and address.
3 Consultant
Name and address.
4 Service
4.1.1 The Consultant’s service will be in accordance with the Full/Abridged/Performance

Duties specified in Agreement 4A of the ACE Conditions of Engagement (current edition) and
shall include all items set out in the Appendix thereto, in so far as they may be applicable. (NB
Consider and state any additional items to be included, eg. design of below ground drainage,
lifts etc.) The service includes such Additional, Supplementary and Quantity Surveying duties
as are necessary, including advice to the Quantity Surveyor on budgets, cost planning, tenders
and valuation of works, but not the provision of Bills of Quantities.
‘Before commencing Work Stage E of the RIBA Standard Form of Agreement the Consultant
specifications, schedules or other information to be prepared, the timing of its issue and the
manpower resources that will be committed at each stage of the programme. The programme
significant issue which may affect information production. Where information for construction
Consultant will incorporate and coordinate in the programme, and Information Issue schedule,
comparable information from other members of the consultant team, relevant to their
discipline.’
The consultant will coordinate his service with the Architect, and provide information to him
4.1.3 When the Consultant is satisfied practical completion of the services installation has been
achieved to a standard comparable to that required of the Architect under the building
contract, the Consultant shall certify accordingly to the Client and Architect.
4.1.4 The Consultant will advise, act for, and represent the Client in respect of any claim(s)
presented by the Contractor, or specialist sub-contractor(s), in so far as this relates to the
Consultant’s service and expertise.
Deleterious Materials:-
d asbestos products
Health and Safety:–
The Consultant will, prior to the payment of any part or the whole of the fee (Clause 6),
requirements.
relevant information required for the Health & Safety file, to be produced on or before the
Regulations 1994).
4.1.7 Latent Defects:–
4.2 Development Partner (eg Fund. Local Authority Purchaser or Tenant)
4.2.1 Upon instruction from the Client the Consultant shall provide any drawings, specifications,
or other services information, required by a Development Partner, its agents and/or Consultants,
and will liaise with these parties according to the direction of the Client.
4.2.2 If required by the Client, the Consultant shall provide each and any Development Partner a
warranty in the form published by the British Property Federation.
4.2.3 Each warranty to include the following terms:
a Number of permitted assignments – each warranty.......;
c Limitation of liability – commencement of action. ..years from date of practical

completion.
4. 3 Letting
4.3.1 Provide drawings, specifications, or other services information that may be required in
connection with the letting of the project. The Consultant will have regard for the requirements
of the Property Misdescriptions Act 1991.
4.4 Legal
Provide any drawings, specifications or other services information that may be required for
any legal documents.
4.5.1 Liaise with tenants and their Consultants in resolving any requirements to be included in the
Client’s building contract.
4.5.2 Assist the Client in preparing a Tenant’s Handbook if appropriate, and/or provide drawings
and other services information on which tenants and their Consultants may prepare fitting out
proposals. Comment upon and recommend approval of any tenant services proposals; also
monitor the works to ensure they are implemented according to approvals given on behalf of
the Client.
4.6 As-built record drawings/operating and maintenance manuals/guarantees/maintenance

contracts
4.6.1 The Consultant shall procure and pass to the Client, at practical completion, two sets of all
relevant material, including:
b Operating and maintenance manuals.
c For each and all services’ elements, and to the extent not included in (b) above:-
i the specification and/or manufacturers reference,
ii the anticipated life,
iii written guidance on cleansing, maintenance and repair.
d All available product guarantees and test certificates.
4.6.2 The information required by items (c) and (d) above are to be presented in the form of an
owners handbook.
4.6.3 The Consultant will advise and assist in the arranging of any maintenance contracts
5 Copyright
5.1 The copyright in all drawings, reports, models, specifications, calculations and other documents
project following its completion including, but without limitation, the construction, completion,
6 Fee
(State the agreed fee basis which shall be calculated according to one of the following.
a In accordance with the provisions of Agreement 4A, but note whether this includes or
excludes any time charges, supplementary scales and QS scale rewards.
b As a percentage of the initial contract sum or final account value (excluding the value
of any finishes of a fitting out character, eg carpets).
c As a lump sum.)
7 Resident Engineer (if appointed)
7.1 Payment by the Client to be based on salary cost and other properly attributable expenses.
8 Terms of Payment
8.1 The period(s) prior to the Client’s decision to fully proceed with the project.
a Time.
b Form of work to be completed (eg. feasibility studies, concept design, production

drawings).
c Manner of payment, (eg monthly tranches, lump sum on completion).)
commitments shown in the programme and Information Issue schedule (para.4.1.2).
9.1 If during the period(s) described in 8. (1) the sum(s) specified in that clause for work up to the
time at which suspension or abandonment occurs, or some other specified figure.
9.2 If during the stage described in 8.(2) the measure of payment will be by agreement, and have
regard to the provisions of the ACE Agreement 4A.
The consultant shall maintain professional indemnity insurance in the amount of not less than
11 Consultant team
The Consultant acknowledges and agrees that the other members of the Consultant team shall
be;
Architect:
Quantity surveyor:
Project Manager:
necessary.
12 Signature
the Architect __________ __________
Witness
(NB: All partners, or __________ __________ (NB:for partnership

two directors, or one Address only)
director and company __________ __________
secretary).

the Client
__________ __________


Design and Build.
12. Insert new clause in the appointments of those consultants who are to be novated to the
contractor.
Novation
name.........) shall each be responsible to the other for obligations arising under this Agreement,
up to the time and date of Novation.
12.2 Subsequent to Novation it is agreed that the Consultant will inform (..Client name....):
If the Consultant considers any aspect of the detailed or construction design to conflict with
the drawings and specifications previously approved by (..Client name..) and/or a Development
Partners, or with Planning Permission or Building Regulation approval.
If the Consultant considers the Contractor’s working methods or quality of workmanship to

be not in accordance with the contract requirements or good practice.
If the Consultant considers the building is not suited for Practical Completion at the time this
is sought by the Contractor.
If the Consultant considers the snagging or defects lists prepared by the Contractor are
insufficient.
Appendix B
B1 Developer/tenant outline specification (example)
B2 Tenants’ handbook – contents (example)
B3 Letting memorandum (example)
B4 Shopfitting proforma (example)
APPENDIX B1
TREATY CENTRE, HOUNSLOW
7.0 Outline specification of developer’s and tenants’ works

By developer By tenant
7.01 Structure Obtain approval for any alterations to the structure

Provide in-situ reinforced concrete columns, including any holes or chases to be cut in the
beams and waffle slabs with non-loadbearing structure
walls.
7.02 Floors Provide first floor 300 mm reinforced concrete

Provide ground floor slab in 200 mm reinforced slab and beams with areas of waffle slab or 200
concrete on a polythene damp-proof membrane mm solid reinforced concrete slab having a
on hardcore, having a maximum loadbearing loadbearing capacity of 7.5 kN/m2 including an
capacity of 20 kN/m2, excluding any allowance allowance for the finish. Provide all floor finishes
for the finish. within demise including screeds to total thickness
of 75 mm average (ground floor) and 75 mm (first
floor) even where entrances or shop fronts are set
back from the demise line. Extend wall finishes in
matching conglomerate marble (internally) or in
matching paving (externally). Provide approved
movement joints in all floor finishes to coincide
with structural movement joints.
7.03 Ceiling Provide all ceilings to comply with ventilation

Provide plain finish concrete soffit. and smoke extract requirements. Obtain approval
for all fixings into structural soffits. With the
exception of units 7, 8 and 20, any false ceilings
that are erected shall have a 70% free area for that
area within 5 metres of shop front. The remaining
ceiling shall have a 35% free area.
7.04 Roofs Provide all internal walls and partitions within

Provide all roofs and external finishes including demise. Provide all toilet partitions as necessary.
insulation to Building Regulation requirements.
7.05 Walls
Provide all enclosing walls to demise except
shopfront.
7.5.1 Internal walls

Non-loadbearing walls are generally in 200 mm Provide all wall finishes. Provide shopfront
thick blockwork. Wall thicknesses are indicated incorporating main entrance from mall.
on the information sheets relative to each unit
which may be obtained from the architect.
7.5.2 External walls

A combination of cavity walls in facing brickwork Provide all enclosures for tenant’s plant
and tiling, with dark red anodised aluminium
windows and louvres. Internal leaves of cavity
walls in light-weight concrete block.
Internal faces of walls will be shell finish.
7.06 Floor openings

Provide openings in structural slabs for tenant’s Provide stairs as required. Fill in superfluous
stairs between ground and first floors. openings to the approval of the Structural Engineer.
7.07 Drainage
Provide cast iron drainage for two water closets Provide sanitary fittings and waste pipeworks.
and two wash hand basins.
Provide shop units 28-29, 31-32 with additional Where used provide ventilation pipework and
drainage for two water closets and two hand basins. connection for one wash hand basin connect to the
existing ventilation pipework at high level.
7.08 Doors
Provide doors between shop units and service Provide all internal doors, frames and ironmongery.
corridors. Doors will be solid, flush, fire resisting Provide locks, latches or other security fittings to
timber in softwood frames, painted finish, fitted Developer’s doors.
with butts, overhead closers and barrel bolts.
7.09 Painting: woodwork

Paint doors and frames. Paint all woodwork within demises.
Externally woodwork will be painted primer, 2
undercoats and one finishing coat gloss. Internally
woodwork will be primed only.
7.10 Windows and ventilators

Provide louvred ventilator between
shop unit store and service corridor.
7.11 Postal services Provide a standard GPO letter box in the shopfront
incorporating the shop number agreed by the
Developer and the local authority together with
the Post Office, of which the tenant will be advised.
7.12 Sign to malls and service corridors Provide name on outside of entrance from service
Provide signs as follows: corridor. Provide all names, signs etc on shopfront.
Provide exit signs etc as required to comply with
7.12.1 Tenant’s nameboard at entrance to service Fire Officer’s requirement.
corridor
7.12.2 Centre name and logo at all public entrances.

7.12.3 Traffic signs to show vehicle circulation

within car parks and service deck.
7.12.4 Directional signs in malls to indicate

location of public toilets, centre
management, vertical circulation to car
parks, emergency exits.
7.13 Goods lifts

Provide 8 goods lifts as indicated on floor plans to
connect ground level service corridors with service
deck.
7.14 Passenger lifts

Provide four electrical passenger lifts by Thyssen
with variable voltage motors to connect all levels
of the car park with the west mall.
Lift doors and interiors will be stainless steel with
ribbed rubber floors.
7.15 Trolley lift

Provide one trolley lift to connect supermarket to
levels 1 to 11 of the car park.
7.16 Escalators
Provide four escalators by Thyssen in two pairs,
up and down, to connect the three levels of the
atrium and provide access from the east car park to
ground and first floor levels.
7.17 Refuse
Provide a refuse container for each shop unit. Provide a refuse store to accommodate a refuse
Provide a refuse compaction system within the container measuring 1.27 ¥ 0.81 m.
first floor service area.
APPENDIX B1
8.0 Specification of mechanical and electrical works
8.01 Domestic cold water

Provide a 15 mm cold water copper supply pipe Provide all internal water pipework, storage
terminating at high level with a stopcock. cisterns and hot water heaters, including insulation
and all plumbing as required.
8.02 Sprinklers
Provide a branch pipe terminating with a sealed Provide a sprinkler system within the shop to the
flanged loose key valve, sited at high level. approval of the Local Authority Fire Officer, and
designed to Fire Officers Committee Rules for an
Ordinary Hazard Group 3 classification. Sprinklers
are not required for shop units numbered 7, 8,
and 20.
Provide interface box for connection of sprinkler Provide a flow switch within the installation, after
alarm to central security office. the sealed termination valve.
Provide electrical connections to the Developer’s

interface box.
8.03 Hose reels
Provide hose reels to external public areas, as Provide hose reels within shop unit, if required by
decreed by the local Fire Officer. local authority Fire Officer. The tenant’s
installation will include all supplies, storage and
pressure boosting equipment.
8.04 Gas
Gas is supplied only to the larger stores.
8.05 Soil & waste drainage

Provide soil and waste drainage connections for: All sanitary fittings and appliances, including any
2 WCs necessary extension to the drainage in addition to
2 Wash hand basins that provided. Provide toilet partitions where
required.
8.06 General extract ventilation

Provide cooled/tempered outside air for ventilation Provide ductwork and inlet grille on shop side of
purposes which is drawn from the Mall and through extract system.
the shop to an extract point at the rear of the
premises.
Provide a smoke stop damper at general or corridor

extract point, which closes with advent of smoke/
fire.
For ventilation rates of General or Corridor Extract For shop units 22-25 inclusive: Provide ductwork,
see Schedule No 1 attached. extract fan grilles and louvres to draw air through
the shop and discharge to atmosphere at the rear of
the premises.
8.07 Smoke extract

Provide smoke extract dampers at the rear of the Should full height partitions be erected by the
shop, which open with the advent of smoke/fire tenant across the rear width of the shop the tenant
shall extend the smoke extract duct to that partition,
to ensure the front portion of shop is adequately
smoke ventilated.
For units inside the Centre any false ceilings that

are erected shall have a 70% free area for that area
within 5 metres of shop front. The remaining
ceiling shall have a 35% free area.
Provide sufficient fresh air to shop unit to replace

air extracted by smoke extract system. For shops
with open frontage, air will enter shop naturally
from mall area.
For shops with a closed shop front, air will enter Provide a deflector screen at above false ceiling
shop at false ceiling level, from mall false ceiling level and approx 2 m from shop front to deflect
void. incoming fresh air to a lower level to assist in
smoke ventilation of public areas.
8.08 Toilet extract

Provide a central ducted toilet extract system Provide ductwork and inlet grille on shop side of
terminating at the rear ground floor of each shop extract system. For Shop Units 22-25 inclusive
unit and include a fire damper in the wall between and Shop Unit 35.
shop and service corridor.
Provide ductwork, duplicate extract fans, grilles
For ventilation rates of toilet extract see Schedule and louvres to discharge vitiated air to atmosphere.
No 1 attached.
8.09 Condenser water loop

Provide sufficient water for cooling purposes from Provide recirculation type air conditioning unit
the Developer’s central condenser water loop and complete with pipework valves and controls
terminating with a capped flow and return in each up to Developer’s condenser water connections.
shop. Unit to have electric heater battery (see Schedule
No 3 attached for typical proprietary units.)
For temperature and flow rates of condenser water
see Schedule No 2 attached.
Note: no service is given to shop unit outside Provide drainage from unit to discharge into the
enclosed malls. shop waste and drainage system.
8.10 Heating
No heating is provided to the shop units, except Provide electric heating as necessary.
for the tempered air supplied for ventilation
purposes. (See Condenser water loop above)
(See General extract ventilation.)

8.11 Service corridor extract ventilation

Provide an extract fan in each service corridor to
provide ventilation to the area, using air drawn
from the shop units, via a relief grille.
Provide a smoke stop damper at each relief grille,

which automatically closes upon an appropriate
electrical signal from the developer’s building
management or by the local thermal detector.
8.12 Electrical supply

Provide, in conjunction with Southern Electricity Provide, by application to Southern Electricity
Board, low voltage supplies to each tenant. Board, for a supply connection (including meter).
For capacity of electrical supplies being provided Provide connection cables between meter and
by SEB see Schedule 4 attached. tenant’s main switch.
Provide all necessary lighting and power circuits

and fittings.
8.13 Lighting to developer’s and tenant’s area

Provide illumination to all developer’s and public Provide illumination to shop unit.
areas to comply with statutory regulations.
Provide illumination where required for security

purposes.
Provide standby or emergency lighting for public Provide emergency illumination to shop unit.
areas to cater for potential mains supply failure.
8.14 Standby power generation

Provide standby generation equipment to maintain Provide standby generation if required. If not
essential services to developer’s and public areas. provided, breakdown of mains supply will require
tenant to evacuate premises.
8.15 Emergency alarms, security & public
address
8.15.1 Fire alarms – smoke detection alarms

Provide a comprehensive automatic fire alarm Provide an automatic fire alarm system to BS
and smoke detection system to Developer’s areas 5839 incorporating an indicator panel, break glass
with an alarm interface box to each shop unit. call units and smoke detectors. All to be compatible
with developer’s system.
Central alarm control will be at console type Tenants’ panels to be sited on tenants’ premises.
equipment located in the Security Room.
Alarms identification in zones, where each tenant Tenants’ panel to provide an automatic alarm
is designated as one zone. connection to the interface box.
Break glass call units and smoke detectors are Alarm warning to be by bells. Alert warning to be
provided in malls and service corridors and at by intermittent ringing. Evacuation warning to be
exits. by continuous ringing.
Fire telephones are provided at mall entrances

with direct link to the Security Room.
8.15.2 Security alarms

Provide an intruder sensor at all vulnerable points
of entry to the development.
Provide an interface box located at each shop unit Provide an intruder sensor to all doors and
which will enable the developer’s security staff to entrances and connect these to interface box. If a
monitor the tenant’s system. reed relay system is used, a direct connection to
the developer’s system could be made without the
need for a tenant’s additional control unit.
8.15.3 Closed circuit television

Provide a closed circuit television system giving Provide closed circuit television to shop areas as
partial surveillance of Malls, Service Corridors deemed necessary by tenant.
and loading bays.
Provide monitor screens in the Security Office.
8.15.4 Public address system

Provide a Public Address System throughout the Where the tenant installs a music/public address
developer’s areas excluding the car park to give system, the system will include an interrupt facility
facilities for broadcasting background music, for emergency override by the developer.
speech, announcements and fire evacuation
instructions.
The central amplifying equipment will be located

in the Security Room.
8.16 Telephones
A telephone link will be provided between the
service deck and each shop unit excluding units
22, 23, 24 and 25 which have direct rear access
from the Douglas Road Service Yard.
Provide a main frame room at ground floor level

to receive incoming underground cables provided
by British Telecom.
Provide a network of empty cable trunking between Provide, by tenants’ application to British
the main frame and each tenancy, for use by the Telecom, a telephone service to each shop.
tenant.
8.17 Television aerials

Provide a UHF/VHF colour and monochrome Provide aerial amplifier should more than one
aerial array with coaxial down leads to each tenancy aerial outlet be required.
terminating at the interface box adjacent to each
shop. Signal strength suitable for a single television
for each tenant.
8.18 Access to developer’s services

The developer shall require access to certain shop
units for the periodic inspection and maintenance
of common services. This may include one or
more of the following installations:
• Smoke ventilation damper mechanism

• General/corridor extract damper mechanism
• Ventilation ductwork
• Condenser water pipework
• Rain water down pipes
• Soil, waste and ventilation pipes
• Sprinkler/hose-reel pipework
• Mains water pipework
• Town’s gas
• SEB electrical supplies
• BT cable trays/conduits
• General electrical cable tray, conduits and
pipe ducts.
APPENDIX B1
SCHEDULE NO 1
Ventilation rates M3/s
Shop no Toilet extract General or corridor
1 0.1 0.283
2 0.1 0.188
3 0.1 0.190
4 0.1 0.153
5 0.1 0.365
6 0.1 0.039
* 7 No Service
8 No Service
9 0.1 0.152
10 0.1 0.479
11 0.1 0.192
12 0.1 0.192
13 0.1 0.269
14 0.1 0.269
15 0.1 0.115
16 0.1 0.311
17 0.1 0.148
18 0.1 0.148
19 0.1 0.262
* 20 No Service
* 22 0.1 0.031
* 23 0.1 0.191
* 24 0.1 0.300
* 25 0.1 0.300
*Ventilation rates given are supply volumes available from the developer systems. Tenants are required
to provide complete extract systems to handle the rates stated.
APPENDIX B1
SCHEDULE NO 1
Ventilation rates M3/s
Shop no Toilet extract General or corridor
26 0.1 0.642
27 0.1 0.323
28 0.1 0.347
29 0.1 0.347
30 0.1 0.229
31 0.1 0.292
32 0.1 0.601
33 0.1 0.601
34 0.1 0.950
35 * 0.1 0.950
36 0.1 0.330
37 0.1 0.290
38 0.1 0.290
39 0.1 0.498
40 0.1 0.640
*Restaurant – 3.6
*Ventilation rates given are supply volumes available from the developer systems. Tenants are required
to provide complete extract systems to handle the rates stated.
APPENDIX B1
SCHEDULE NO 2
Condenser water flow rates and temperatures
Flow temp: 270C

Return temp: 390C max
Floor rate base on 0.00 4 litres/sec per m2 of floor area
Shop no Flow rate (1/s) Shop no Floor rate (1/s)
1 0.677 26 1.313
2 0.51 27 0.748
3 0.514 28 0.791
4 0.448 29 0.791
5 0.823 30 0.582
6 0.246 31 0.968
7 * No service 32 0.984
8 * No service 33 0.925
9 0.446 34 1.048
10 1.024 35 2.988
11 0.517 36 0.62
12 0.517 37 0.602
13 0.652 38 0.602
14 0.652 39 1.058
15 0.380 40 1.31
16 0.727 Restaurant 2.76
17 0.438
18 0.438
19 0.641
20 * No service
22 0.232
23 0.516
24 0.708
25 0.708
* Heat rejection facility by tenant (eg air-cooled

roof-mounted refrigerant condenser) if required.
APPENDIX B1
SCHEDULE NO 3
Sample list of proprietary air conditioning units
The following is for information only, being the tenant’s responsibility to select,
purchase and instal air conditioning units for shop heating and cooling.
The models listed do not indicate any preference by the landlord for any particular
manufacturer or supplier.
The units are sized for a typical shop only and the tenant should in all cases
contact the supplier and/or the manufacturer to ensure the correct unit is being
supplied for his needs.
Climate Equipment Ltd Model RP1012U

Cranford Lane No. units: one
Heston Free standing
Hounslow Fitted with electric heater
Middlesex, TW5 9ND
Girdwood Halton (Air Conditioning Ltd) Climate Control

18-20 Thorpe Road Incremented type WH150
Norwich No. units: seven
Norfolk, NR1 1RY Fitted with electric heater
Free standing
Temperature Limited Prestair President

Newport Road Model 158WCL
Sandown No. units: seven
Isle of Wight, PO36 9PH Fitted with electric heater
Free standing.
Unicoils Air Conditioning Model No TW120/1

Palmerston House No. units: one
Commercial Square Fitted with electric heater
Haywards Heath Free standing
Sussex
Weathermaker Equipment Limited Model 50BF012

Priory House No. units: one
Marsh Road Free standing
Alperton Lane
Wembley
Middlesex HA0 1ES
APPENDIX B1
SCHEDULE NO 4
Electrical supplies available
Proposed SEB Proposed SEB

electrical supply electrical supply
Shop No KVA Nature of Shop No KVA Nature of
supply supply
1 34 3 phase 26 43 3 phase
2 26 3 phase 27 34 3 phase
3 27 3 phase 28 39 3 phase
4 25 3 phase 29 39 3 phase
5 40 3 phase 30 36 3 phase
6 9 1 phase 31 24 3 phase
7 18 1 phase 32 40 3 phase
8 19 1 phase 33 40 3 phase
9 16 1 phase 34 40 3 phase
10 48 3 phase 35 100 3 phase
11 25 3 phase 36 34 3 phase
12 25 3 phase 37 30 3 phase
13 32 3 phase 38 30 3 phase
14 33 3 phase 39 34 3 phase
15 13 1 phase 40 46 3 phase
16 44 3 phase Restaurant 70 3 phase
17 16 1 phase
18 16 1 phase
19 23 3 phase
20 18 1 phase
22 19 1 phase
23 18 1 phase
24 25 3 phase
25 25 3 phase
NB: Single phase and neutral supplies will be a declared voltage of 240 v 50 Hz.
Three phase and neutral supplies will be a declared voltage of 415v/240v 50 Hz.
The SEB incoming supplies will provide PME (ie TWC-S) earth terminals adjacent to the SEB
cutouts
The space requirements for the SEB metering equipment will be as follows:
1 Small shop units – 1,000 mm ´ 1000 mm
2 Large shop units – 1,000 mm ´ 2000 mm high
A free space of 1000 mm minimum will be required in front of all SEB metering equipment for
maintenance and meter reading. All meter tails are to be provided by each tenant and these
should be PVC/PVC and a maximum length of 3000 mm.
APPENDIX B1
SCHEDULE NO 5
Building management & integrated systems cost advice to tenants
Thorn EMI Protech Limited are the developer’s specialist installer for the Building Management
and Integrated Systems and to ensure compatibility with the developer’s systems the developer
strongly recommends tenants to appoint Thorn EMI Protech for the installation of electronics
monitoring and alarm systems within the units. For tenants’ guidance we have obtained the
following budgetary advice based on supply, installation, testing and commissioning in an average
sized unit, eg Shop Unit 12. However, we stress that tenants should obtain their own specific
quotation from Thorn EMI Protech as cost will vary according to individual requirements.
BUDGET COSTING
1 Complete fire alarm system £2 000
1 ´ Control unit
5 ´ Smoke detectors
3 ´ Manual callpoints
4 ´ Alarm bells
2 Complete security system £ 350

6 ´ Door contacts including wiring to the interface box.
3 Complete closed circuit television system £1 500

This is completely independent of the Developer’s CCTV system
2 ´ Fixed cameras
2 ´ Brackets
1 ´ Monitor unit
1 ´ 2-way sequential switching unit
4 Complete public address system £1 720

A unit comprising
1 ´ Tape recorder
1 ´ Radio
1 ´ Amplifier
4 ´ Speakers at ground floor level
The interrupt facility for announcements is approximately £230 extra.
5 Cost associated with interfacing the above systems £ 52

with the developer’s via interface box
Total commissioning cost for these connections.
6 Cost associated with the wiring and connection from £ 100

tenant’s sprinkler flow switch to interface box
APPENDIX B2
TENANTS’ HANDBOOK
TREATY CENTRE – HOUNSLOW
CONTENTS
1.00 Introduction 1
1.01 Treaty centre 1
1.02 Parking and servicing 2
1.03 Entrances 2
1.04 Summary of finishes 2
1.05 Summary of M & E works 2
1.06 Centre logo 3
2.00 Centre management 4

2.01 Managing agents 4
2.02 Management offices 4
2.03 Car park opening and charges 4
2.04 Service charges 4
3.00 The lease – Summary of Trading Regulations 5

3.01 Tenant’s demise 5
3.02 Shopfront & shopfitting 5
3.03 Repair and maintenance 5
3.04 Alterations and additions 5
3.05 Loading and deliveries 5
3.06 Trading hours 5
3.07 Floor loading 6
3.08 Advertising 6
3.09 External fittings 6
3.10 Noise vibration and nuisance 6
3.11 Cooking 6
3.12 Refuse collection and disposal 6
3.13 Security fire alarms and public address system 7
3.14 Shopping trolleys 7
3.15 Heating and air conditioning 7
3.16 Management directions 7
4.00 Shopfitting design 8

4.01 Design concept 8
4.02 The demise 8
4.03 Shopfitting 8
4.03.1 General requirements 8
4.04 Shopfronts 8
4.04.1 Shop lines 8
4.04.2 Fascia 8
4.04.3 Open shopfronts 9
4.04.4 Closed shopfronts 9
4.04.5 Divisions between shopfronts 9

4.04.6 Movement joints 9
4.04.7 Shopfront security 10
4.04.8 Graphics and signs 10
4.04.9 Floor finish 10
4.04.10 Materials 11
4.04.11 Letter box 11
4.05 Interior design 11
4.06 Lighting 11
4.07 Merchandise display 11
4.08 Mechanical and electrical services 12
4.08.1 Heating and air conditioning 12
4.08.2 Service meters 12
4.08.3 Telephone 12
4.08.4 Security, fire alarms and public address 12
4.08.5 Sprinklers 13
4.08.6 Storage 13
5.00 Shopfitting approval 14

5.01 Developer’s drawings 14
5.02 Design meeting 14
5.03 Consultations 14
5.04 Planning permission 14
5.05 Outline proposals 14
5.06 Local authority & statutory authorities 15
5.07 Developer’s approval 15
5.08 Final details 16
6.00 Shopfitting regulations 17

6.01 Schedule of Condition 17
6.02 Pre-start site meeting 17
6.03 Tenant’s shopfitting contractor 17
6.04 Shopfitting Regulations 17
6.05 Hoardings 19
6.06 Alterations during works 20
6.07 Inspection 20
6.08 Completion 20
6.09 Insurance 20
6.10 Record drawings 20
7.00 Outline specification of developer and tenant works 21

7.01 Structure 21
7.02 Floors 21
7.03 Ceiling 21
7.04 Roofs 21
7.05 Walls 21
7.05.1 Internal walls 22
7.05.2 External walls 22
7.06 Floor openings 22
7.07 Drainage 22
7.08 Doors 22
7.09 Painting – woodwork 23

7.10 Windows and ventilators 23
7.11 Postal services 23
7.12 Sign to malls and service corridors 23
7.13 Goods lifts 23
7.14 Passenger lifts 24
7.15 Trolley lift 24
7.16 Escalators 24
7.17 Refuse 24
8.00 Summary of mechanical & electrical specification 25

of works
8.01 Domestic cold water 25
8.02 Sprinklers 25
8.03 Hose reels 25
8.04 Gas 25
8.05 Soil and waste drainage 25
8.06 General extract ventilation 26
8.07 Smoke extract 26
8.08 Toilet extract 27
8.09 Condenser water loop 27
8.10 Heating 27
8.11 Service corridor extract ventilation 27
8.12 Electrical supply 28
8.13 Lighting to developer’s and tenant’s area 28
8.14 Standby power generation 28
8.15 Emergency alarms security and public address 28
8.15.1 Fire alarms – smoke detection alarms 28
8.15.2 Security alarms 29
8.15.3 Closed circuit television 29
8.15.4 Public address system 29
8.16 Telephones 30
8.17 TV aerials 30
8.18 Access to developer’s service 30
Schedule No 1: Ventilation rates to each shop unit 31/32

Schedule No 2: Condenser water flow rates and temperature 33
Schedule No 3: Sample list of proprietary air conditioning units 34
Schedule No 4: Electrical supplied available 35
Schedule No 5: Building management & integrated systems cost advice to tenants 36
9.00 Insurances 37
10.00 List of statutory authorities 38
11.00 List of development team consultants 39/40
12.00 Floor plans & shop front recommendations 41/51
13.00 Diagram of M & E services to typical shop unit 52
14.00 Disclaimer clause 53
APPENDIX B3

LETTING MEMORANDUM
Re: unit Dated
1 Name of proposed tenant:

a Business address and registered office
b Tenant’s principal trade or business
c References: Landlord/Bankers/Trade/Supplier/Accountants/Solicitors
Attached/To follow – delete where appropriate
d Accounts for last three years attached: Yes/No
2 Tenant’s proposed use:
3 Names of proposed guarantors:

a Business address and registered office
b References:Landlord/Bankers/Trade Supplier/Accountants/Solicitors
Attached/To follow – delete where appropriate
4 Term of lease: years from
5 Annual rent: £
6 Rent reviews: years of term upwards only
7 Rent commencement date:
8 Service charge percentage:
9 Possession proposed on:
10 Is any planning permission required

for the proposed use? Yes/No
11 The tenant’s solicitors are:
12 Additional details:
We recommend acceptance of the above terms ............................................................................
on behalf of ................................................................................................... Joint Letting Agent
Sent by TWP to Eagle Star Properties Limited/London Borough of Hounslow

on ....................... 199
Sent by the Developer on ................ 199 to Messrs McKenna & Co with instructions to despatch
draft lease to the Tenant’s Solicitors.
APPENDIX B4
SHOPFITTING PRO FORMA
Unit No:
Tenant: Trading as:

(address)
Use:
1 Tenant’s representative: Tel No:
2 Tenant’s shopfitting designer: Tel No:

(address)
3 Tenant’s shopfitting contractor: Tel No:
Special instructions:
To whom should Developer/Consultants Issue:

Tenant’s Handbook:
Development Drawings:
Issued by ......................................................... to TWP Project Management (date) ..................
Approved and confirmed by TWP Project Management ................................................ (signed)
(date) ......................
Tenants Handbook issued to ........................................................................ (date) ......................
Fitzroy Robinson Partnership to issue development drawings to Tenant’s Designers and/or

Contractors
cc: FRP TAYMECH TWC (site)

RHP TAYWOOD ENGINEERING
Appendix C
C1 Project record
C2 Quarterly financial appraisal
C2(i) Cash flow
C3 Nominated specialist status report

Appendix D:
Health & Safety:
Construction (Design and Management) Regulations 1994
D1 Project record
D2 Competency and resources enquiry – Planning supervisor
D3 Competency and resources enquiry – Designer
D4 Competency and resources enquiry – Principal contractor

A561
Taylor Woodrow Property Company Limited
PROJECT RECORD APPENDIX D1

CONSTRUCTION (DESIGN & MANAGEMENT) REGULATIONS 1994
Regulation PM File
CLIENT’S AGENT
Name:
Address:
4(2) Competency enquiry:- Issued: Reply approved by Client:

by whom:
4(4) & (5) Declaration:- Issued to HSE: Declaration date:

Confirmed by HSE:
Copy to Company
Secretary: Copy to Company
Secretary:
PLANNING SUPERVISOR
Name:
Address:
8(1) Competency and Issued: Reply approved:

9(1) resources enquiry:- by whom:
Appointment Draft issued:

Completed: Original to
solicitor:
DESIGNERS
8(2) Name Competency & resources enquiry

9(2) Issued Reply approved By
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
PRINCIPAL CONTRACTOR(S)
8(3) Name Competency & resources enquiry

9(3) Issued Reply approved By
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
A646
APPENDIX D1 (continued)
PROJECT RECORD
CONSTRUCTION (DESIGN & MANAGEMENT) REGULATIONS 1994
Regulation PM File
PROJECT
7(1) Notification by Planning Supervisor to HSE (Form F10): (date)
Copies to: (date) (date)

(Company Secretary) (Solicitor)
11(1) Health and Safety Plan Completed Where PM copy held
15(1) by Planning Supervisor: _______________________________________________
15(4) by Principal Contractor: _______________________________________________
Revisions:
Subject
1 ___________________________________________________________
2 ___________________________________________________________
3 ___________________________________________________________
4 ___________________________________________________________
5 ___________________________________________________________
6 ___________________________________________________________
7 ___________________________________________________________
8 ___________________________________________________________
9 ___________________________________________________________
10 __________________________________________________________
10 Confirmation of Client satisfaction with Contractor’s Health and Safety Plan

(before construction starts): (date)
Health and Safety File
14(f) Received from Planning Supervisor:
12(1) Copies: Number received:
Where PM copy held:

Others – Passed to: Date
1 ________________________________________
2 ________________________________________
3 ________________________________________
4 ________________________________________
5 ________________________________________
6 ________________________________________

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A project manager’s guide to development

8. Mechanical and electrical services consultants

10. Development/building agreements

11. Joint venture agreements

12. Finance agreements

14. Construction (Design and Management) Regulations 1994 (CDM)

15. Statutory approvals

16. Statutory powers and agreements

17. Rights over land – easements

19. Specialist subcontractors

20. The building contract

21. Tenants – leasing and occupation

22. Commissioning and management transfer

23. Monitoring and administration

B. Developer/tenant outline specification; Tenants’ handbook – contents;

C. Project record; Quarterly financial appraisal; Cash flow; Nominated

D. Health and Safety: Construction (Design and Management) Regulations

The term ‘Guide’ is deliberately chosen. There is no single definitive approach to

However, such a document – a contract – has necessarily to be objective. It cannot

l administration and co-ordination;

The understanding between client and project manager is therefore of vital

Whilst careful selection of a development team is important to the successful

‘Risk’ is an abstract characteristic, difficult to define but ever present in

It is as important for the project manager to disseminate information as it is for

Design information is fundamental to effective preparation and planning for

The project manager’s usual relationship to a building contract is that of an

8. Mechanical and electrical services consultants

3 The project management appointment

Title Institution Agreement

Project Royal Institution of Memorandum of Agreement between Client and

1. The project specifics, eg the parties, scope of development, duration of

Whilst there is some inevitable intermingling of these in all contract drafting, I

3.2 The project

Fees in the UK are usually expressed as a percentage of the building cost. By

3.3 The services

3.4 Obligations and standards

l Servant. An employee subject to client control, eg in-house project manager.

l Independent contractor. Engaged through a contract to complete a specified

l Agent. Contains elements of both servant and independent contractor.

Directing the team

1. Organisation of the team.

3.5 Reporting to and obtaining instructions from the client

A distinction is required between reports for routine decisions (which might be

Royal Institute of Standard form of Agreement for

Royal Institution of Professional Charges – Scales 36

Individually and collectively the Conditions have important shortcomings.

1. Because each of the Conditions is presented in different style, each requires a

3. There are features of typical development consultancy not mentioned.

4. A number of responsibilities are qualified or excluded.

Nevertheless, each of the Conditions is the recognised conventional basis for

Example of professional charges (but not always used)

QUANTITY STRUCTURAL MECHANICAL AND ELECTRICAL

Basic Services Design

100% Final Account 100%

To study and negotiate in detail on the Institution’s Conditions before each

Addressing appointment terms early in the life of a development does, in my

Invariably, a development team will include an array of professional advisors whose

4.1 Appointment terms – general criteria

A further refinement, which the project manager might consider appropriate

In commercial development it is essential the consultants function as part of a

(2) Development associates (funding institution, local authority, tenants)

Collateral warranties are an established feature of commercial development,