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June 11, 2018

Construction Advice for Charities

Construction Advice for Charities

Our Construction Team assists our charity clients with all aspects of construction procurement in order to ensure that their plans are met on time and on budget. We understand the imperatives for charities, in fulfilling their charitable objectives, of ensuring achievement of commercial and reasonable terms from those with whom they do business.

We also appreciate charities’ internal reporting requirements and can assist by providing risk reports, regular updates and by attending meetings (whether with trustees or the executive team).

We work with charities, their professional consultants and contractors to ensure that their construction contracts are put in place in a timely and cost effective manner.

Procuring new works

Starting a new project can seem like a daunting process, especially if a charity has never had responsibility for procuring a building project before. We work with charities to ensure that their interests are protected not only on their first scheme but ensuring, wherever possible, that documents can also be used on future building projects to minimise costs and management time and provide continuity of terms.

The types of documents we regularly advise on include:

  • Building contracts – industry standard forms and preparing bespoke schedules of amendments
  • Consultant appointments
  • Letters of intent
  • Collateral warranties
  • Novation agreements
  • Performance bonds
  • Parent company guarantees
  • Development agreements
  • Funding agreements
Trading subsidiaries for development work

Where appropriate, we work with our charity clients to involve trading companies in development projects. Such companies are separate, independent entities owned by the charity which may have an important role to play in such projects. They may provide a useful focus for specialist expertise in relation to such projects and their involvement may have VAT consequences. We are experienced in liaising with VAT advisors in connection with such arrangements and in putting in place appropriate documentation between the charity and trading subsidiary. Once such structures are established we advise on the procurement route, building contract, consultant appointments and, where appropriate, ensuring collateral warranties are provided to the charity.

Estate management and maintenance programmes

Our charity clients are often involved in building works to maintain and improve existing facilities as part of a wider rolling estate management and maintenance programme. With dedicated specialist knowledge and experience in the charity sector we can assist with streamlining a charity’s construction documents to ensure the charity is not ‘re-inventing the wheel’ and can benefit from the management and administration savings from having continuity in contract terms.

Due diligence and reporting to trustees

If a charity is acquiring a new site and substantial works were undertaken in the 12 years prior to the acquisition, it is often prudent to have undertaken due diligence on the documentation used to appoint the contractor and design team to ensure the charity could pursue a claim if there were ever an issue with the works. We can assist with obtaining copies of those contracts, preparing a report on key liabilities and any missing documents, checking appropriate insurances and assisting you with any documentation needed to transfer the benefit of those contracts to the charity.

We are often asked by our charity clients to provide a project report on the risks and responsibilities in the construction documents for trustee meetings, the charity’s audit trail and ease of future reference. These are often useful where instructing officers are not consultants and feel unsure in explaining the details of the construction documents to the board of trustees. If useful, we can also attend those meetings.