What is a bank monitoring surveyor?

In accordance with the Royal Institute of Chartered Surveyors' definition, a bank monitoring Surveyor, also known as a fund monitoring surveyor, safeguards a client's interests by "identifying and advising on the risks associated with acquiring an interest in a development that is not under the Client’s direct control."

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What’s their role and purpose?

In simple terms, a is employed by a bank or private lender to oversee the financial, construction, and statutory risks to a project the financier is funding.

Lenders must exercise caution in determining loan recipients, particularly for construction projects, which inherently carry higher risks compared to financing completed properties. The uncertainties at the project's outset pose challenges that may affect profitability.

Monitoring surveyors leverage their expertise in building surveying, construction project management, and cost management to provide a comprehensive and high-quality service to their clients. Through their strategic actions, they effectively mitigate clients' short-term financial risks while aiming to ensure the long-term success and benefits of the project.

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What’s the process?

The initial and crucial step involves verifying the feasibility of a project and ensuring comprehensive due diligence has been conducted. This typically entails the creation of an initial report, which examines various factors, including the acquisition of proper planning permission and building regulations approvals. Additionally, the report assesses the arrangement of warranties and the presence of suitable insurance. Monitoring surveyors provide feedback on the developer, evaluating the competency of their team and the suitability of contractors. The role of monitoring surveyors also extends to assessing the sensibility and realism of the project's timeline and most importantly assessing the proposed build costs.

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Below is a typical list of information which will be requested and reviewed by monitoring surveyors:

·        Development appraisal

·        Construction costs – Bill of quantities / SOW

·        Professional fees breakdown

·        Planning fees- CIL / S106?

·        Warranties & utility costs / quotes

·        Contingencies allocation

·        Proposed drawings

·        Planning drawings

·        Detailed design/ building regulation drawings

·        Structural drawings

·        M&E Design information

·        Overall Project Programme

·        Duration of design works

·        Duration of construction works

·        Projected start date for construction works

·        Planning approvals

·        Planning conditions confirmation

·        CIL / S106 confirmation

·        Listed Building status

·        SAP calculations / EPC

·        Party wall requirements

·        List of professional consultants, including appointments and insurances (PII)

·        Contractor’s insurances (PII, all risks, EL & PL)

·        Building contract information

·        CDM Regulations- Principal Designer and  Principal Contractor confirmation

·        Warranty information- Provider information and policy details

 Upon the bank's approval of the initial report findings, or following any necessary adjustments, partial funds can be released, allowing the project to commence. Throughout the construction phase, monitoring surveyors conduct regular site visits, usually on a 4 weekly basis to tie in with typical build contract payment runs. These inspections ensure that the project is progressing according to plan and that the work meets the required standards. A monthly interim report is standard practice, detailing the monitoring surveyor’s observations and addressing any concerns uncovered. The bank relies on this report to authorise the release of funds for works completed on site since the start date or from the previous visit by the monitoring surveyor.  

Upon the project's culmination, their monitoring surveyor performs a comprehensive final inspection visit. This entails meticulous verification to ensure that the building specifications precisely align with the initial plans, accounting for any variations that have been agreed upon during the course of the project. In addition, the monitoring surveyor meticulously reviews all essential documentation, ensuring that all necessary permissions and approvals are securely in place. Any remaining issues are diligently addressed, and upon successful resolution, the lender releases the final sum to their client, thereby facilitating the seamless handover of the completed project.

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Top Tips!

For banks, lenders or financiers looking to appoint a bank monitoring surveyor and for developers looking to understand the process further, Survey Network have provided our top tips below:

What to look for when appointing a bank monitoring surveyor:

1)    Substantial experience in the field.

2)    Strong technical skills.

3)    Profound understanding of the construction process.

4)    Comprehensive knowledge of Procurement and Construction Contracts.

5)    The capacity to proactively mitigate project risks from the project's inception for a fund.

6)    Exceptional communication skills.

7)    Proficiency in identifying and advising on risk mitigation strategies.

8)    Familiarity with various funding models.

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‍Below are our top tips to developers when working with bank monitoring surveyors, to assist you in getting funding approved and ensuring a smooth drawdown process during the build:

1)    Clear broken-down costings in an elemental format. Or a detailed specification which has been tendered to the open market showing a reasonable market rate has been received.

2)    Surveyors tend to be busy so book in interim inspections a minimum of 2 weeks in advance.

3)    Stick to the original specification. i.e. don’t over or under specify elements of the build.

4)    Statutory compliance takes longer than you think! Sign-off of planning conditions can take over 6-8 weeks in the current market.

5)    Use a well-known and reliable approved inspector for Building Control sign off. Regular site visit reports from Building Control relay confidence to the surveyor and lender that the works are compliant and there is less potential of latent defects.

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Choose a Development Monitoring Surveyor from Survey Network for your project:

Survey Network brings extensive experience in the role of Development Monitoring, having represented numerous banks/lenders, and successfully supervised the completion of various new construction projects in the South, encompassing locations such as London, Essex, Brighton, Reading, Bristol, Southampton, and Bournemouth. The type of projects we have worked on includes office to residential conversion, new build houses and blocks of flats, barn conversions into residential dwellings, commercial properties, listed buildings and luxury home refurbishments.

To learn more or initiate an initial discussion about integrating our Development Monitoring services into your project, please feel free to contact us.