The importance of Reinstatement Cost Assessments
A blog by Lewis Potter
The importance of Reinstatement Cost Assessments
If you own a commercial property, then Building Reinstatement Cost Assessments are a process that you may be familiar with, but perhaps don’t fully appreciate the significance of why they are so important. To help explain the full process, reasoning and importance of these assessments we have created this quick helpful Q&A guide to explain all you need to know.
1) What is a Building Reinstatement Cost Assessment?
Building Reinstatement Cost Assessments (BRCA) are evaluations that calculate the total cost of rebuilding or repairing a property in the event of damage or destruction.
They are an essential element of insuring your commercial property to ensure that owners have adequate cover on their policy to reinstate the building and/or business as it was prior to damage.
2) Who needs an Assessment?
A Building Reinstatement Cost Assessment is beneficial to anyone responsible for a commercial building or property. This includes landlords, property managers and commercial property owners.
If you have a mortgage or insurance policy on the property, your lender or insurer may require a Building Reinstatement Cost Assessment to ensure that you have adequate cover in case of damage or destruction. These are normally completed when someone buys a building, but actually it is also a good idea to also have a Building Reinstatement Cost Assessment if you have recently made significant renovations or improvements to the property as they can affect the overall cost of rebuilding or repairing the property.
Examples of the range of buildings that Eddisons Incorporating Banks Long & Co have recently completed Assessments for include the Grade II Listed Duke William pub in Lincoln, Bird & Co Solicitors offices in Grantham and the Morton Media Centre in Horncastle.
3) Whose responsibility is it to arrange a Building Reinstatement Cost Assessment?
The responsibility for arranging a Building Reinstatement Cost Assessment may vary depending on the specific circumstances. In some cases, the property owner or landlord may be responsible for arranging the Assessment, particularly if they are seeking to obtain insurance cover for the property. In other cases, the lender or insurer may require the Assessment and arrange it themselves.
4) Who completes the Assessment?
A Building Reinstatement Cost Assessment is completed by a RICS Registered professional Valuer or Quantity Surveyor. These professionals are trained to accurately estimate the cost of rebuilding or repairing the property based on its size and location, the materials used in construction, labour costs and materials.
5) How often should a BRCA be completed on my building?
The frequency of Building Reinstatement Cost Assessments can vary depending on a number of factors including the age and condition of the property, changes in Building Regulations, and fluctuations in material and labour costs. In general, it is recommended that a Building Reinstatement Cost Assessment is carried out at least every three years to ensure that the insurance cover is adequate.
With building material costs having risen 25% over the last 12 months, it is good practice to keep your Assessment up to date so that older valuations are not undervaluing the cost needed to rebuild.
6) How much does a BRCA normally cost and how long does it take?
Eddisons Incorporating Banks Long & Co are a local independent business and are committed to providing this service at the most competitive rates available.
In most cases the RICS Registered Valuer visits the property for around 3-4 hours, followed by in-depth online research to complete the valuation of the building and assets.
Hopefully this has helped to give you more insight into the importance of Building Reinstatement Cost Assessments for your commercial property. If you’d like to know more please feel free to email myself at lewis.potter@eddisons.com or call 07501 298138 for an informal chat.