We received instructions to prepare a Reinstatement Cost Assessment for a restaurant in Chepstow, South Wales. Our Client, the Tenant was negotiating the terms of their Lease renewal and was concerned that the building was under-insured.
The building, a former market hall, comprised of thick stone walls with pitched roofs. The nature of the structure was not a typical construction. In this instance applying standard published rates for the reconstruction of typical buildings was not appropriate. This required a bespoke assessment based on building up the reconstruction costs elementally.
We undertook a site inspection and took details of the construction along with measurements to calculate the reinstatement costs.
The Tenant had been in occupation for years undertaking alterations and improvement works during that time. The Tenant was liable for the insurance costs for their alterations whilst the Landlord was liable for the building structure. The Reinstatement Cost Assessment therefore needed to show the liabilities of the Landlord and Tenant separately.
We prepared the Reinstatement Cost Assessment by calculating the elemental costs due to the unusual construction of the building. The Landlords costs, including the shell and some internal parts formed the first part of our assessment. We then assessed the Tenants liabilities by completing an elemental build-up of the Tenants fit out and improvement works. Adding the Landlord and Tenant costs, with associated costs and professional fees, provided the Reinstatement Cost Assessment for insurance purposes.
At Tim Greenwood and Associates we are experienced in preparing Reinstatement Cost Assessments. We can prepare more complex Reinstatement Cost Assessments where published reconstruction costs for more standard building structures are not appropriate.
