Connect to Real Estate

One of the worrying issues that emerged during my time as president of the City Property Association was just how segmented the property market is in the City. The top-quality, well-let offices and retail buildings are commanding increasing rents and higher market values: a subject of considerable rejoicing. However, there is also a substantial amount of far less desirable buildings that fall short of current requirements for carbon emissions and other green demands of prospective tenants.

There is little chance such properties will be let without substantial refurbishment and adaptation.

This leads me to an insurance problem causing concern in property and legal circles: when a contract involves an extension or alteration to an existing underproperty, the standard Joint Contracts Tribunal contract -- in schedule 3, option C in the 2005 version, and its equivalent in other forms. This requires the employer to arrange joint names insurance against specified perils for the structure and contents, which are the responsibility of the employer. The clause also requires the employer to arrange all risks cover for the works.

This is not likely to pose a problem when the client is the owner of the property and arranges the building insurance.

However, when dealing with a property actually insured by a third party, an approach has to be made to that party at an early stage. It is important to assess their attitude towards providing some protection to the contractor, and the tenant, in respect of damage done to the existing structure, because of the negligence of the contractor or others under the control of the client. In those cases, it is highly unlikely that cover will be provided

Find out more in my full Property Week article here