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Development Monitoring for Funding Institutions. 

VFM provides specialist project monitoring services to banks and other funding institutions that are in the business of lending monies to developers for the purpose of funding development projects.

Debt funding of this nature has inherent risks and as a result it is essential that funders receive professional advice throughout the process in order to manage those risks.

At VFM we pride ourselves as specialists in this field possessing the necessary expertise to cover the relevant aspects of any development project from inception to completion and beyond.

The scope of our services can generally be categorised into two distinct phases. The first covering pre-commencement and the second, the construction phase. 

Pre-Commencement Phase

This first element involves diligence in assessing the viability of the proposed scheme and ensuring that all matters are in order prior to allowing the scheme to progress. 

Typical pre-commencement checking and reporting procedures are significant and may cover a broad spectrum of issues including :- 

• project risk overview 

• feasibility studies 

• development budget appraisal

• sensitivity analyses

• financial projections and calculations

• financial and company checks

• project documentation is scrutinised

• insurances

• planning conditions and requirements

• building control checks

• local authority notices and restrictions

• restraints reporting

• site limitations and access

• site investigation report

• health and safety requirements

• building contract

• contract price

• cash flow

• programme

• consultant appointments and fees

• collateral warranties

• project quality and specification

• funding agreement compliance

• general feedback

In summary the project documentation is scrutinised including all insurances, planning conditions and requirements, building control checks, and local authority notices and restrictions. The health and safety plan must be approved, and generally we have to further satisfy ourselves that all is in order before reporting and recommending that the scheme is compliant in all respects. 

A pre-commencement report is then prepared by VFM and issued with recommendations to the funder in order to allow a reasoned judgement to be made for the purposes of approving the proposed loan arrangement. 

Construction Phase

The second element of our service allows for regular monitoring of the project following successful agreement and approval of financing arrangements. We ensure that the funder is kept fully briefed on progress and expenditure throughout the construction phase which includes completion and handover procedures of the finished development.

Duties covered during this stage include the following areas which we would generally report on a monthly basis or as otherwise may be requested :-

• Risk register

• Quality and specification

• Expenditure / cash flow analysis

• Variance reporting and recommendations

• Discharge of planning conditions

• Progress in relation to programme

• Health and safety compliance

• Cost reporting and forecast

• Building Control approvals

• Local authority agreements

• Completion of warranties

• Maintaining insurances

• Attend project meetings

• Regular site visits

• Value and certify drawdown monies

• Material design changes

• Contract records and certificates

• Practical completion certificate

• Completion procedures

• Final account agreement

Our service would typically include for providing monthly or periodic reports addressing the above issues as appropriate.  In particular we would include an updated assessment of the projected Final Cost, commenting on project progress as regards both time and cost, comparing actual to budget, detailing the reasons for any variances and making appropriate recommendations in respect of our findings.

It is also important to ensure that project insurances are kept up to date.  Appropriate professional indemnity insurances must also be included to cover designers and any latent defects policy must be properly administered for compliance.

Useful Links:

Royal Institution of Chartered Surveyors ° Association for Project Management  ° Building Cost Information Service
Association of Property Bankers ° The Joint Contracts Tribunal Ltd ° Chartered Institute of Building ° Building Magazine ° Contract Journal

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Tel: 020 8658 6824 Fax: 0871 990 2366
VFM Group
Chartered Quantity Surveyors
Development and Property Consultants
Project Managers

Web :   www.vfmgroup.com
E Mail : vfm@vfmgroup.com