This is a fast evolving environment and whilst there may be nothing new in this briefing note, it consolidates recurring themes from the many, many conversations our FMs and property management teams are having with you all.
Since our last update
We have seen building occupancy respond to Government instructions to stay home except for a few specified reasons (for example, to purchase essential supplies or to seek medical assistance). For a variety of reasons, our occupiers have not been in a position to send all staff home and your building has had to be kept operational to support business critical functions and teams.
MAPP’s teams are, where possible, working remotely. However with some 150 of our fantastic people based on site, working from home is not feasible and these teams have had to make a number of adaptations to observe Government guidance and handle travel restrictions. We thank them all for their flexibility and dedication.
As with your own business, MAPP has been continuing to develop the business continuity plans we have in place. Our key suppliers are central to service delivery and we have been in regular contact to understand their policies, plans and challenges with their own people. Security, cleaning and M&E are all facing challenges with staff absences for example, parenting or carer responsibilities and travel.
We have been looking to share responsibilities and introduce basic training to minimise temporary staff costs. Staggered shifts and different travel times have helped some of our site based contractors to observe social distancing. Through the open and transparent relationships MAPP has with its suppliers, we’ve been able to understand those who are in best shape to handle a prolonged crisis, should it be required.
Government guidance on key workers particularly around the FM industry has been slow to emerge. For that reason, MAPP has taken the decision that any member of our team with specialist knowledge of the building, its systems (such as air conditioning programming or access control), statutory requirements (such as weekly fire panel testing) or shut off points for power, water and gas are key workers. We have asked these individuals to continue to support our buildings and occupiers through attendance. We believe the adaptations they have made, have helped to minimise putting them at unnecessary risk but will continue to review this closely.
Many of our occupiers are asking whether we will be closing buildings due to low occupancy.
We are keeping them open. Closing an office building is potentially catastrophic for a business if occupiers are denied access to critical comms rooms or post (containing payment and invoices for example). MAPP is also managing buildings where critical work to support the battle against the virus is going ahead.
Safety of people is not being compromised by being kept open. Where possible, we are allowing people to drive in, park at buildings or close by buildings, and with low occupancy, there is very little interaction with others. There is always a balance and we will review these arrangements as people start returning to work.
From an operational perspective, locking down a building will need a longer lead in to re-open it and expenditure will be needed to deliver that with HVAC works and chlorination of water supplies for example. The Fire Service expects skeleton teams to remain in place to assist them should there be a fire.
However, certain Police forces are interpreting essential travel differently, and we will be continuing to monitor this situation over the next few days and weeks.
The legal position
In the event of zero occupancy, MAPP is required to ensure that the building owner and the occupiers comply with their respective Insurer requirements in order that cover is maintained. MAPP also has minimum statutory obligations particularly around testing of life safety systems, legionella prevention and in respect of other aspects of Health & Safety which require attendance. Your landlord insures your building and the insurer’s requirements are very strict, including requirements for premises that are left empty for a period of time. Insurers have made it clear that where possible a 24/7 security presence is continued or put in place, and site staff are required to continue running the building while also inspecting vacant premises to check for any ongoing risks.
During this time, it’s particularly important to retain security staff. There is a very real risk of increased criminal activity in buildings with low occupancy and we have an obligation to keep the premises secure with adequate protection not just for the landlord or their insurers but for your business and your insurance policies. We are treating security staff as key workers and only reducing levels of cover where absolutely necessary in agreement with all parties.
Partial closures and preparation for shutdown
Given the situation is changing so quickly, MAPP is preparing each of its site teams for sudden closure in the event of lockdown.
Detailed site plans have been developed which cover a wide range of activity. Whilst some equipment and plant can be isolated, others need to be kept running albeit in minimal or energy efficient mode. Life and building safety systems need to remain fully operational, and hygiene needs to take account of leaving premises clean with sufficient vermin prevention for prolonged periods. Secure alternative locations for post deliveries have been identified, and notification of emergency services and regulatory authorities has been pre-prepared. We very much hope these arrangements won’t be necessary and that we can continue to keep our buildings open, supported by a ‘lite’ version of service delivery.
We have written to all of our occupiers separately regarding service charge and VAT. Our credit control teams and property managers have been discussing payment of this quarter’s rent with all of our occupiers. We fully understand the enormous difficulties that all of our occupiers face in managing cash flow this quarter, and the decisions they are making around non-essential spend given that the length of this crisis is unknown.
Now, more than ever, payment of your on-account service charges is of paramount importance. Given the commitments we have with suppliers and the need to keep your building operating, even with some services partially scaled back, we cannot offer any form of payment plans for your on account service charge contribution. It is due in full, and late payment will put essential service delivery in jeopardy. We do hope you understand this situation and are able to work with us in keeping a positive cashflow for the service charge.
Where it is possible to do so, we will suspend discretionary services to provide effective cost management. We can make no commitments about reducing future quarterly on account service charges because of uncertainty over the next few months which may require additional services which haven’t been budgeted for, for example additional security, additional deep cleans or the costs of re-commissioning plant.
We are noticing that some occupiers have misunderstood the position around payment of VAT. Please note that where VAT is applicable, VAT remains payable in full on service charges as shown on your invoices. The HMRC deferral of any VAT payments due relates to an occupier’s periodic VAT returns and not to the payment of VAT on the charge itself.
What are we doing to help you?
At this time, each occupier’s needs are different. We are balancing keeping buildings open, keeping staff in roles where practical to do so, and taking careful steps to reduce non-essential spend. We are ready to respond to building closures and preparing for a prolonged period of staff absences. We are protecting your building and taking additional precautions against cyber activity.
Our teams are available to answer your questions, and our Help Desk 0800 389 0100 remains available to everyone on a 24 hour basis. We want your business and staff to get through this and for us all to get back to business as usual as soon as we can.
We urge you to touch base with your Management Surveyor if you have not already done so, and will keep in regular communication to explain our approach and respond to your concerns.