Académique Documents
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Objective
These notes are for reference only by the TAQEEM trainees. The objective of this
publication is to provide knowledge on cost approach of Valuation and construction
material, technology and services in relation to cost approach in valuation.
DISCLAIMER
The publisher makes every reasonable effort to ensure the accuracy and completeness
of the information in this book. Due to the dynamic nature of the material and the
possibility of human or mechanical error, the reader is encouraged to refer to original
sources as the ultimate authority on this subject. Please keep in mind that the examples
presented in this text are for demonstration purposes only. Actual values may vary greatly
in different regions, countries/states, and cities.
TAQEEM Academy
Saudi Authority of Accredited Valuers (TAQEEM)
Level 3, Alamani Centre, Al-Sahafa Area
13321, Riyadh, Saudi Arabia
www.taqeem.gov.sa
TRAINING PROGRAMME SCHEDULE
Date/ DAY 1
Time
Session 1
Introduction
0800 - 0945
Definition
Underlying principles
Session 2
1000 – 1115 Approach to Cost Method
Steps in Applying Cost Method
Notes:
Every 45 minutes lecture participants will be given 15 minutes break IF THE CLASS EXCEED
ONE (1) HOUR (if necessary)
TRAINING PROGRAMME SCHEDULE
Session 1 Session 3
Continuation Continuation
1000 - 1115 Exercise 2
Session 1 Session 3
Session 2
Session 4
Session 5
Continuation
1315 - 1500 Session 2 Examination
Property Management
and Maintenance
Note:
Every 45 minutes lecture participants will be given 15 minutes break IF THE CLASS EXCEED ONE (1)
HOUR (if necessary)
7"-6"5*0/$045"1130"$)
$0/5&/540'5)*4.0%6-&"3&
$045"1130"$)
$0/4536$5*0/."5&3*"-4&37*$&4
$045"1130"$)
7"-6"5*0/$045"1130"$)
Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
Objective
At the end of the programme the participants will gain knowledge on the basic principles and
application of the Cost Method of valuation.
Contents
Introduction
Definition
Underlying Principles
Methodology
Lecture
Discussion
Examination
Duration
1 day
Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
SESSION PLAN
DAY : 1 DAY
OBJECTIVE : At the end of the programme the participants will gain knowledge on the basic
principles and application of the Cost Method of valuation
Session 1
Day 1 At the end of the session, Introduction
0800 - 0945 Introduction participants are expose Definition
Definition introduction to cost method o Price
Underlying and its definition and the o Cost
principles principles o Value
Principles of Cost Method
Day 1 Session 2 At the end of the session, Determining the Site or Land Value
1000 - 1115 participants will gain Determining the Building Value
Steps in Applying knowledge on the steps in o Newly Constructed Buildings
Cost Method applying the Cost Method o Older Buildings
Determine depreciation
Day 1 Session 4 At the end of the session, Calculation on Newly Constructed Building
1130 - 1245 participants will gain Calculation on Older Building
Application of Cost knowledge the application of Calculation on Specialised Property
Method Cost Method in valuation
TABLE OF CONTENTS
Chapter Page
1.0 INTRODUCTION 1
2.0 DEFINITION 3
8.0 CONCLUSION 29
Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
1.0 INTRODUCTION
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
2.0 DEFINITION
2.1 Price
Price is the amount asked, offered or paid for an asset.
Because of the financial capabilities, motivations or special
interests of a given buyer or sell, the price paid may be different
form the value which might be ascribed to the asset by others.
2.2 Cost
C o s t is the amount required to acquire or create the asset.
When that asset has been acquired or created, its cost is a fact.
Price is related to cost because the price paid for an asset
becomes its cost to the buyer.
2.3 Value
Value is not s fact but an opinion of either:
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
Principle of Substitution
• No prudent purchaser would pay more for a property than it
would cost him to purchase a site and reproduce a building of
similar utility.
• This means a prospective purchaser would be prepared to pay
only what it would cost him to provide a similar
accommodation elsewhere.
• This approach establishes the upper limit of what the market
would normally pay for a given property when it is new.
• For an older property, some allowance for various forms of
accrued depreciation, that is, physical deterioration;
functional or technical obsolescence; and economic or
external obsolescence is deducted to estimate a price that
approximates Market Value.
Exercise 1
1. What is Cost Method?
2. Define the followings:
a. Price
b. Cost
c. Value
3. What is Principle of Substitution?
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
a. Land Value
b. Building Value or The Replacement Cost
c. Depreciation
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
(i) If there is a focal market in the subject and, use market evidence or
comparable sales.
(ii) Consider what likely planning consent might emerge in the locality
and use the market evidence for that planning use. ·
(iii) Consider a notional site in the same locality with similar characteristic.
(iv) Consider the use carried on a notional site in a different locality.
Existing use value of the site can be arrived by using one of the two
approaches below.
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
This is the simplest of the three methods and the most widely
used. First, ascertain t h e area of the building being assessed. If a
plan .is available, it needs to be verified by inspection.
·
Secondly, ascertain t h e cost per square metre to construct th is
building, that is, t h e one which is of similar floor area, perimeter,
design, finishes and quality of construction. The rate must include
builder’s profit and overheads.
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
Exercise 2
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
4.3 Depreciation
Physical depreciation results from wear and tear over the life of the item
or loss in value caused by inadequate maintenance. Different valuation
methods may be used to estimate the amount required to rectify the
physical condition of the improvements.
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
• Market-based assessment
• Assumption-based assessment:
• Breakdown method
i) Market-based assessment
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
Exercise 3
1. What is depreciation
2. Explain three (3) type of depreciation / obsolescence
3. Give three (3) ways to determine depreciation
(ii) Determine the current cost of erecting the building based on:
a) The dimensions of the building
b) The accommodation and size of the accommodation
c) The type and quality of building materials and the quality
of workmanship
d) The type and quality of floor and other finishes
e) The type, nature and quality of other finishes
f) The contractor's profit margin
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
(iv) Market value is then equal to (i) + (ii) - ( iii) i.e. Land value and
cost of new construction - depreciation
iii) Form an opinion of site value on per unit basis and multiply it
by the land area of the subject property to arrive at the site
value.
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
A. Newly Constructed B u i l d i n g s
ii) From the building plan, determine the gross external floor
area.
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
B. Older Buildings
i) · Similar as in 6.2A(i)
ii) Similar as in 6 .2A(ii)
iii) Determine the current cost of construction of similar building.
This can be derived by analysing the construction cost of
similar buildings in the neighbourhood if available or consult
Quantity Surveyor or Engineer for the cost of construction
using the specification of the subject building.
iv) Determine the level of obsolescence of the building
i. Physical obsolescence
ii. Functional obsolescence
iii. Economic obsolescence
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
CV = SV+BV
Assuming, BV = NRC
Dep. = Depreciation or
Obsolescence
Or CV = SV + (BC -
Dep.)
Or CV = SV + NRC
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
The cost method is mainly used to determine the capital value of landed
properties in the following circumstances:
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
The site is 12,077 sq. metres in area occupied by four new buildings,
an underground cable tunnel and a cable yard.
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
Site Improvements
1. Tarmac area
11,000m.s. @SAR15/-p.m.s - SAR 165,000
2. Fencing
471 m @ SAR30/-p.m.r - SAR 14,130
SAR 179,130 say SAR179,000
Building Value
1. 4 Storey Telephone Exchange Building
Main Building
2546.38 m.s@ SAR517 p.m.s. SAR1,316,478
Lift-4 Floor openings @
SAR12, 000 per opening SAR 48.000
SAR1,364,478
2. Store
Main Building
255.50m.s. @ SAR323 p.m.s. SAR 82,552
Car Park Shed•
50.73 m.s. @ SAR129 p.m.s SAR 6.544
SAR 89,096
3. Power Plant House
129.35 m.s. @SAR323 p.m.s. SAR 45,010
4. Tunnel
37.02m.r @SAR 3,280p.m.r SAR 121,426
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
5. Guardhouse
5.95 m.s. @ SAR300 p.m.s SAR 1,785
SAR1,621,795 say SAR1,622,000
Market Value say SAR3,033,000
Note :
SAR103.20
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
Building 'A'
Bath
Kitchen Bedroom
12.192 m
15.240 m
Bedroom
3.048 m
Porch Living
4.572 m
Main Building :
9.144 m x 12.192m ……. 111.480 m.s
4.572 m x 3.048m ……… 13.935 m.s
124.415 m.s
Building 'A: was recently constructed at the cost of SAR42,000/-.
The finishes for the buildings are as follows:
Roof - Cement Tiles
Ceiling - Asbestos Plastered
Wall – Brick
Floor - Plain Cement
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
SAR42,000
= SAR430.56 p.m.s
125.415 m.s + 1/3 ( 13.935 m.s.)
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
15.239 m 2.438 m
Bath Bath
Master
Bedroom Living
6.096 m
10.668 m 4.572 m
Main Building
10.668 x 12.192 …….. 130.064 m.s.
4.572 x 6.096 ……… 27.871 m.s.
2.438 x 2.438 ………. 5.944 m.s.
163.879 m.s.
Porch
6.096 x 4.572 ……………. 27.871m.s.
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
Valuation:
B. Building Value
Main Building
163.879 m.s. @SAR322.92pms - SAR 52,920
Porch
27.87m.s. @SAR107.64prns - SAR 3,000
Additional Works
Flooring-(* See note 2)
Parquet : 83.61 m.s. @ SAR53.82 pms SAR4,500
Marble : 46.45 m.s. @ SAR86.11 pms SAR4,000
Mosaic : 27.87m.s. @SAR43.10pms SAR1,200
SAR 65,620
Less
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
Note
1. Site value of SAR 107.64 pms was derived from sales analysis
of vacant residential lands in the neighbourhood of
approximately the same size and characteristics.
2. The cost of floor finishes pms was derived based on quotations
given by contractors.
3. Depreciation of 20% is based on the straight line method i.e.
Age of building
X 100
Economic life span of building
12
= X 100 = 20%
60
Specialised properties are those properties that are rarely sold in the
open market, where there are insufficient market data to value them by
the comparison method. Similarly, lack of rental and income evidence,
the investment and profit methods of valuation are not applicable. Thus,
the most appropriate way to determine the market value of such property
is by reference to cost or depreciated replacement cost method.
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
Example:
A modern crematorium built by a District Council; at the time of
valuation there are some 2,750 cremations annually but the
premises has a full working capacity of some 7,500 cremations
annually; thus some of the facilities provided are surplus to
requirements.
26
(1) Such items are rateable as plant even though they do not
occur in industrial premises, as here
(2) This item is estimated, inter alia, by reference to the ratio
between actual use and potential cremation capacity
Exercise 4
7.1 Advantages
The assumptions. used in cost method is simple and logical i.e. the
seller will as much as possible try to sell the property at the
minimum what it cost him to construct the buildings on the property
site and the purchaser would be prepared to pay for the property
what it would cost him to provide similar buildings elsewhere.
7.2 Disadvantages
i Building materials
ii. Labour costs
Building
iii Contractor’s profit and charges value
iv. Developer’s profit and risk
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
8.0 CONCLUSION·
Exercise 5
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
Extra Exercise
(TRUE/ FALSE)
2. Functional depreciation results from wear and tear over the life of the item or
loss in value caused by inadequate maintenance.
(TRUE/ FALSE)
3. Cost is the price paid for goods or services, or amount required to create or
produce the goods or services.
(TRUE/ FALSE)
(TRUE/ FALSE)
5. In the cost approach, land value is determined by taking into consideration the
existing improvements.
(TRUE/ FALSE)
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Cost Approach
6. This approach is useful when the property being appraised is a type of property
that is not frequently sold and is not an income-producing property.
(TRUE/ FALSE)
7. The replacement cost is the cost of building a similar structure, but using
modern construction methods and materials.
(TRUE/ FALSE)
(TRUE/ FALSE)
(TRUE/ FALSE)
10. This approach establishes the upper limit of what the market would normally
pay for a given property when it is new.
(TRUE/ FALSE)
31
$0/4536$5*0/."5&3*"-4&37*$&4
7"-6"5*0/$045"1130"$)
Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
Objective
At the end of the programme the participants will be able to gain knowledge on construction
material, technology and services in relation the Cost Approach in valuation.
Contents
Methodology
Lecture
Discussion
Examination
Duration
2 days
Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
SESSION PLAN
DAY : 2 DAYS
OBJECTIVE : At the end of the programme the participants will be able to gain knowledge
on construction material, technology and services in relation the cost
approach in valuation.
Session 1
Day 1 At the end of the session, Introduction to Building Construction and Technology
0800 – 0945 Building participants will be able to Building Classification
& Construction understand the basics of Building Functional Requirements
1000 - 1115 Technology building construction and Building Legislation
technology Building Team
Development Process
o Fire Fighting
o Building Security and Mechanical Transportation
o Telecommunication System
o Refuse Disposal
Session 6
Day 3
Exercises & Examination
Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
TABLE OF CONTENTS
Chapter Page
LEARNING OBJECTIVES
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
2
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3
Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
4
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ii. Stability
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6
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8
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9
Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
The Great Fire of London in 1666 was the single most significant
event to have shaped today’s legislation. The rapid growth of the
fire through timber buildings built next to each other highlighted
the need for builders to consider the possible spread of fire
between properties when rebuilding work commenced. This
resulted in the first building construction legislation that required
all buildings to have some form of fire resistance.
During the Industrial Revolution (200 years later) poor living and
working conditions in ever expanding, densely populated urban
area caused outbreaks of cholera and other serious diseases.
Poor sanitation, damp conditions and lack of ventilation forced the
government to take action and building control took on the greater
role of health and safety through the first Public Health Act of
1875. This Act had two major revisions in 1936 and 1961 and led
to the first set of national building standards – the Building
Regulations 1965. Over the years these regulations have been
amended and updated, and the current document used in
England and Wales is the Building Regulations 2000 (Tricker &
Algar, 2007).
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
Tricker & Algar, 2007 stated that the Act is responsible for
ensuring that the health, welfare and convenience of persons
living in or working in (or nearby) buildings is secured. One of
its prime purposes is to assist in the conservation of fuel and
power, prevent waste, undue consumption, and the
misuse/contamination of water.
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
12
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
A Structural
B Fire safety
C Site preparation and resistance to moisture
D Toxic substances
E Resistance to the passage of sound
F Ventilation
G Hygiene
H Drainage and waste disposal
J Combustion appliances and fuel storage systems
K Protection from falling, collision and impact
L Conservation of fuel and power
M Access and facilities for disabled people
N Glazing – safety in relation to impact, opening and
cleaning
P Electrical safety
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
Exercise 2
1. Please provide the functions of building regulations in UK law?
2. What are approved documents in UK’s building statute?
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
PROJECT
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b.
Preparing
a. Budget
Feasibility Study
c.
Appoint
Consultant
Planning
Stage
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
Financial sources for the construction by client from own money, loan or
combination of both
Appointed architect will act as the consultant and then coordinate at all stage
of the construction process
(a) Site Analysis And • Flat land? hilly? forest? near to factory?
Selection Of Site Seashore?
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
i. Climate
Varies widely through the country – heavy rain at
catchment areas and others.
ii. Prospect
Ideally a site should command pleasant views and the
adjoining land uses should be compatible. The site itself
will be more attractive if it is gently undulating and contains
some mature trees. But if the trees are too close to the
building they will restrict light and air and cause settlement.
iv. Services
Adequate and accessible water mains, electricity cables
and sewerage system. In rural area it may be necessary to
provide septic tank installations.
v. Subsoil
Type of soil will effect on the building work.
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A B
C D
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A B C
A B
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A B
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
i. Gathering Information
When all work in the analysis and design stage completed,
information such as standard work specification, addendum
specification, work drawing list, instruction and check list for
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A B
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A B
v. Boundary stones:
o Small column made of concrete buried by Survey
Department to demarcate the boundary of any lot.
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
(a) Earthwork
o Process of preparation of required formation level
as in the working drawing.
o Cut & fill work carried out with reference to base
level line & datum that had been set up via levelling
process.
o Area that higher ground level than the site formation
level-cutting is carried out.
o Earth filling is carried out to the area when the
ground level is lower than formation level.
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
(b) Substructure
The functions of substructure are:
o Every structural work needs to begin with the
construction of substructure. The lowest division of a
building or other construction, partly or wholly below
the surface of the ground as the base on which
building rests.
o Designed to support and anchor the superstructure.
The substructure functions are to safely sustain and
transmit the building loads such as dead load, wind
load and imposed load to the ground so as not to
cause any settlement or other movement in any part
of the building or of any adjoining building as it will
weaken the stability.
o To be capable of resisting the attack from damaging
material such as sulphates in the subsoil and other
factors such as swelling and shrinkage of the subsoil.
o Substructure works are consisting of foundation,
pilling and work below water proofing layer.
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A B
Ground level
(c) Superstructure
o Consists of all parts of structure that are built above
the substructure;
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A B
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
Exercise 3
1. Please provide components in Stage 1: Planning Stage of Development
Process.
2. What factors to be considered in Stage 2: Analysis and Design Stage.
3. Explain the components in Stage 3: Management Stage.
4. Name 3 stages in Stage 3 of Development Process: Construction Stage.
5. What is Handing Over in Stage 5 of Development Process?
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
2.0 BUILDING MATERIALS AND FINISHES
2.1 Building Components
Building components consist of ten major parts such as:
Figure 2.1: Building Components
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
PART STRUCTURAL FUNCTIONS GRAPHIC ILLUSTRATION
COMPONENTS
A Column Carry load from beam & transfer it to
Column
foundation
B Ground Beam / Carry direct applied load and transfer it to
Floor Slab beam
C Foundation The lowest part of the building which Please refer to Phase 2: Structural Work as further
transmits the load of the building to the explanation have been elaborated.
under lying earth.
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
PART STRUCTURAL FUNCTIONS GRAPHIC ILLUSTRATION
COMPONENTS
D Beam Carry load from floor slab and transfer it to
column
COLUMN
BEAM
E Fascia Mounted at the point where the roof meets
the outer walls of the house and is often
called the roofline
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
PART STRUCTURAL FUNCTIONS GRAPHIC ILLUSTRATION
COMPONENTS
F Strut Structural component of a roof truss and is
an integral part of the load bearing,
designed to resist longitudinal
compression. Struts provide outwards-
facing support in their lengthwise direction,
which can be used to keep two other
components separate, performing the
opposite function of a tie.
G Rafter A rafter is one of a series of
sloped structural members (beams) that
extend from the ridge or hip to the wall
plate, downslope perimeter or eave, and
that are designed to support the roof deck
and its associated loads.
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
PART STRUCTURAL FUNCTIONS GRAPHIC ILLUSTRATION
COMPONENTS
H Ceiling Joist A joist is one of the horizontal supporting
members that run between foundations,
walls, or beams to support a ceiling or floor.
They may be made of wood, engineered
wood, steel, or concrete. Typically a joist
has the cross section of a plank, while
a beam is bigger than a joist. Joists are
often supported by beams laid out in
repetitive patterns.
I Ridge A ridge vent is a type of vent installed at
the peak of a sloped roof which allows
warm, humid air to escape a building's attic.
Ridge vents are most common on shingled
residential buildings
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
Exercise 4
Name the followings:
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
Its primary aim is to meet the needs to understand the notion and
fabrication of building components plus finishes of:
floor door
wall roof
window
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TYPE OF FLOOR
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4. Damp
1. 3.
2. Blinding proof
Hardcore Concrete
membrane
1. Hardcore
Materials - fairly larges particles (crushed rock, gravels, broken brick and coarse
sands)
Particles- hard, durable, chemically inert
Thickness between 100-300mm
Functions of hardcore:
o To fill hollows
o To raise the finished level
o Provide a firm working surface- On wet sites
o To prevent contamination during placing and compaction
o Reduce the amount of rising ground moisture
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2. Blinding
A blinding layer of coarse sand
Thickness = 50 mm
Functions:
o To fill in any weak pockets.
o To prevent the wet concrete
running down
between the lumps
o To provide a true and compact
Sand blinding went down,
level before everything was
compacted again.
3. Concrete oversite
Providing the solid level surface Concrete + reinforcement mesh
to apply finishes
The mixture of concrete is 1:3:6
(1 cement, 3 fine
aggregates/sand, 6 course
aggregates)
Thickness between 100-150
mm depending on the type of
soil and load.
In Malaysia, BRC
(reinforcement mesh) is laid on
blinding before concrete is
poured. concrete reinforced mesh
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
Figure 2.2: Cross Section of Solid Ground Floor Figure 2.3: Cross Section of Suspended
Timber Floor
This type of floor is more expensive than solid ground floors in terms of
material used and time taken.
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
Surface construction:
This is the base for the construction A. Hardcore E. Wall Plate
B. Site concrete F. Floor finished
and is constructed in the same way as
C. Sleeper wall G. Floor joist
a solid ground floor. D. Damp Proof Course H. Skirting
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1. Floor Joist
Purpose: To support floor board j skirting
o
End of joist may rest on a walli plate
finishes
located of the wall. s
t
Floor
joist
Wall plate
Floor joist
Floor joist
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• The flooring materia should offer resistance to wear and tear, temperature, chemical
action etc. so as to provide long life to the floors.
2. • Flooring should be strong enough to withstand the effects of anticipated traffic and
Resistance to wear other substances witout undue deterioration.
& tear
• Being the sanitation property, a floor should be non-absorbent and capable of being
easily and effectively cleaned.
• Greasy and oily substances should neither spoil the appearances nor should have a
destroying effect on the flooring materials.
3. • From the viewpoint of cleanliness, floorings of terrazzo, marble, tiles and slates are
Cleanliness generally used.
• Important in domestic kitchens, bathrooms, entrance passages and halls and in some
industrial buildings.
• Normally the floor of clay, tiles, terrazzo, concrete etc. are preferred for use where the
4. floors are subjected to dampness and floor material like wood, rubber shoud be
Resistance to avoided.
moisture
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1. Terrazzo
2. Ceramic
Tiles
3. Marble
4. Parquet and
Timber Strip
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5. Cement
render / cement
screed
6. Mosaic
Carpeted Floor
Functions of Carpet:
Acoustical:
• Carpet have close and ventilate structure, can absorb and
isolated sound, so it has good sound-proofing effects.
• Absorbs ten times more airborne noise than any other flooring
material.
Beauty:
• Carpet has a wealth of patterns, brilliant colours; varieties of
shapes that can beautify your decor reflect and reflect your
personality.
Atmosphere:
• Enhances the feeling of quality in interior design – a major
consideration in hotels and motels.
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Definition of Wall
A wall is define as a continuous, vertical, solid structure of brick, stone, concrete,
timber or metal, thin in proportion to its length and height which encloses and
protects a building or serves to divide buildings into compartments or rooms.
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Types of Wall
Functional Requirement
i. Strength • Bear the wind load, dead & imposed load from floor & roof
• Strength depends by the material used, wall thickness & the
way material are put together.
ii. Stability
• The stability of wall may be affected by foundation movement,
lateral forces -wind & expansion due to temperature &
iii. Resistance to moisture change.
weather and
ground • Building regulation- adequately resist the passage of moisture
moisture to the inside of the building.
• Moisture may penetrate a wall by absorption of water from the
iv. Fire safety ground that is in contact with foundation walls or through rain
falling on the wall
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Window
• Is an opening formed in a wall to admit daylight through some transparent material.
• Windows should resist wind loadings, be easy to clean and provide safety and
security.
Types of Window
• Classified in two different ways or a combination of them.
• The method of opening
o Casement which are side hung, top hung, bottom hung
o Pivot hung either horizontal (reversible), vertical or louvre
o Sliding, either vertical or horizontal
o Miscellaneous: Projected side hung, Projected top hung, Sliding folding
• The materials from which they are made: steel; aluminium; timber; PVC
Hinged window
• Side hung
• Top hung
• Bottom hung
Pivoted window
• Horizontally
pivoted
• Vertically pivoted
Composite action
• Projected side
hung
• Projected top hung
• Sliding folding
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Functional Requirement
i. Provision of daylight • The amount and quality of daylight entering a room depends
on:
a) size and shape of windows
b) size and distribution of members of the window frame
c) position of the window in relation to the room (orientation)
ii. Provision of d) effects of internal and external light reflection.
ventilation
1.Weather resistance • It is crucial that rainwater do not pass to the inside of frame.
2.Heat and sound • Walls provide very good heat and sound insulation but when
insulation opening such as windows are made, this ability is breached.
4 Maintenance • The means in which windows are opened are very much affect
their maintenance.
• The outside surfaces of windows are more easily cleaned than
the inside.
• Windows that are located in a high position such as above a
staircase are more difficult to clean.
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Type of Door
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Functional Requirements
i. Means of access • A door opening should be sufficiently wide and high for
comfortable access of people.
• Double leaf doors- access to grand, large spaces or rooms for
appearance, and for convenience in busy corridors.
ii. Privacy • Doors should serve to maintain privacy inside rooms to the
same extent that the enclosing walls or partitions do.
iii. Strength and • A door must have adequate strength to support its own weight
stability and minor abuses in service.
v. Resistance to the • A door should afford reduction of sound for the sake of privacy
passage of sound e.g.: such as lecture rooms, where the noise level is of
importance.
vi. Weather • As a component part of an external wall a door should serve
resistance to exclude wind and rain.
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vii. Durability& • Depends on the material of the door and the usage of the door
freedom from
maintenance
• Glazing and thin panels of wood invite breakage with a view to
viii. Security opening bolts and latches.
• Solid hinges, locks and the use of solid frame door are the best
security.
Roof
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Type of Roof
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iii. Aesthetic Value • Pitched roof considered to have higher aesthetic value
compared to flat roof. (National Library)
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Exercise 5
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There are several water resources. The main water resources can
be divided into two which are:
i. Surface water
Water exists on the earth surface such as lakes,
man-made lakes, rivers & ponds.
Water is sometimes polluted by activities carried by
human being. For this reason water must be treated
before it can be consumed.
Water resources which are not polluted such as at
upstream sources or in the mountain, such water
can be consumed with minimum treatment
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A Main Pipe
B Water Meter
C Stopper
D Service Pipe
E Water tank
F Overflow Pipe
G
H Water Closet
I Shower
J
K Basin
L Service Pipe
M Sink
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3.2.2 Electricity
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i) Voltage Drop
Wires carrying current always have inherent
resistance to current flow. Voltage Drop defined as
the amount of voltage loss that occurs through all or
part of a circuit due to impendence. It will cause
lights to flicker or burn dimly. To minimize the failure
it is recommended limiting the voltage drop from to
breaker box to farthest outlet for power, heating or
lighting of the circuit voltage and done by selecting
the right size of wire.
ii) Overload
It occurs when the amount of current flowing
through the circuit exceed the rating of the
protective devices. The protection that needs to be
considered is concerned with the protection of the
actual electrical wires supplying the circuit against
an overload above their carrying capacity.
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i) Outline Inspection
This consists of visual inspection of electrical
facilities during their working periods and precise
inspection during their off-working periods.
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i) Ring Circuit
Commonly used for socket outlet that provides
electrical supply to portable equipment. The circuit
makes a big loop or ring from one outlet to the next,
round all the outlet and back to the consume unit.
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i) Fluorescent lamp
A tubular discharge lamp internally coated with
powder (phosphor) which absorbs the ultra violet
light and producing a white or coloured light.
Ultra violet light emitted by energised mercury
atoms
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A B
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i) Separate System
A separated system is a system that uses
two drainage pipes to carry waste/foul/soil,
wastewater and surface water to
sewerage system. One of the sewer pipes
carries waste/foul/soil and wastewater,
while surface water pipe carries surface
water only. The diameter of the drainage
pipe in the separated system is smaller
than the one used in the combined
systems.
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i) Scum Layer
This layer contains waste such as foam, cooking
oil, grease and other suspended matters.
The scum layer provides an environment for the
culture of anaerobic bacteria.
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Natural ventilation is the process of supplying and removing air by b. Stack Effect
means of purpose-provided aperture (such as windows, c. Combination wind &
ventilators and shafts) and the natural forces of wind and
temperature-difference pressures. Stack
Mechanical Ventilation
Mechanical or forced ventilation is the process of supplying and
removing air by means of mechanical devices, such as fans. It may Air conditioning
be arranged to provide either supply, extract or balanced
ventilation for an occupied space. Used Whenever natural
ventilation is not well function.
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3.2.4.3. Air-conditioning
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Fuel
Any organic materials
suitable for fire to start
- solid, liquid, gas
Heat
Correct temperature to Oxygen
promote combustion of a
particular fuel. Air is necessary to
sustain and support the
Generated deliberately or it combustion process.
can be spontaneous when
the fuel itself ignites
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FIRE PROTECTION
ACTIVE PASSIVE
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ACTIVE FIRE
PROTECTION
Types Description
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Strategy in escape
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3) Electronic Surveillance
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4) Human Surveillance
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5) Lift/Elevator
i) Electric Lift
The size of lift shaft will depend upon the car
capacity and the space required for the
counterweight, guides and landing door.
The shaft extends below the lowest level
served to provide a pit.
This permits a margin for car over travel and
a location for car and counterweight buffers.
The pit must be watertight and have
drainage facilities.
Shaft and pit must be plumb and the internal
surfaces finished smooth and painted to
minimise dust collection.
A smoke vent with an obstructed area of
0.1m2 is located at the top of the shaft.
The shaft is of fire resistant construction as
defined for “protected shaft” in the Building
Regulations.
This will be at least 30 minutes and is
determined by building function and size.
No pipes, ventilating ducts or cables (other
than those specifically for the lift) must fit
within the shaft.
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Types of Lift/Elevator
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i) Disable Lift
ii) Fireman Lift
iii) Car Lift
iv) Paternoster
v) Double Decker Lift
vi) Panoramic Lift
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6) Escalator
Escalator is used for moving people from one
floor level to another. Alternative to elevators.
Advantages, include no waiting time, no time
lost by acceleration, retardation, levelling and
door operation, or by passengers’ interferences
in getting in & out of the cars, and so on.
Escalator has a decorative/design function; and
its open, observation characteristic is frequently
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7) Travellator
Travellator is a horizontal escalator to move large
people from one place to another through a long
narrow corridor on the same floor/level.
The mechanism is similar as escalator except that
the steps are replaced by continuous chain of metal
plates. Travellators can be inclined from 0-15
degrees. Usually used in airports
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Equipment Function
Main Distribution Use for distributing cables into
Frame (MDF) several lines for multi-subscribers in
a single building
Frame that has terminals blocks
(contain internal telephone wires
which connected to incoming cable)
fixed in it
Telephone Used as telephone exchange
Equipment system to cater various terminal
System
Backup battery To be fitted in case of electricity
System breakdown
Simple arrangement of lead acid
batteries
Distribution Multicore – many wires
cables With suitable size, taken from MDF
at the lowest floor then distribute to
all floor
Technician Work Provided to cater complicated repair
Room & Storage work of equipment component
Room Well lighted and ventilated
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1) Planning
Minimum internal diameter of a refuse chute should be at
least 375 mm.
Refuse chute should not be sited in a kitchen
Any wall separating a refuse chute from habitable room
must thick 675 mm brick wall/210 mm of concrete.
2) Ventilation
The ventilator or chute lining should be non-combustible
material and carried up high enough to avoid foul air
causing a nuisance
3) Materials
Refuse chute should be non-combustible and acid
resistant materials e.g.: clay pipe, glazed stoneware
Hoppers should also be made of non-combustible
materials & withstand to corrosion or abrasion
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4) Chamber
Refuse storage chambers must be surrounded by floor &
wall, with at least 1 hour fire rating.
A ½ hour fire rating lockable, dust and fume proof door
must be provided
Floor must be laid to falls to an external trapped gully
Refuse storage chambers constructed with a dense
impervious surface for ease of cleaning
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
Exercise 6
1. Please name building services that are commonly known in the property
market.
2. Name two (2) type of water sources.
3. Please identify two (2) home water supply system.
4. Explain types of electricity.
5. List the components within sewerage and wastewater system
6. What is septic tank?
7. What is ventilation?
8. Identify the purpose of ventilation.
9. Name the types of ventilation.
10. Explain the Basic Refrigerant Cycle in air conditioning system.
11. List four (4) type of air conditioning system.
12. Please define the followings:
a. Active fire protection system
b. Passive fire protection system
c. Building security system
d. Access control system
e. Intrusion alarm system
f. Electronic surveillance
g. Human surveillance
13. Name types of lift.
14. Differentiate between escalator and travellator.
15. What is refutes disposal.
16. List factors to be considered in constructing chamber refuse).
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The importance of cost control in the construction industry does not have to be
justified. Clients want project to be built within budget on time and to their
required standard. Contractors and specialist contractors want to build facility
to meet the client’s need within the tender figure, but also ensure they make a
reasonable profit. (Flanagan and Tate, 1997).
The function of a building is known, usually from the outset, location and
description of the site is also available. The main factors for consideration are:
Area (the floor area of the building)
Quality (the standard of the accommodation to be provided)
Shape and aesthetic features
The constraints imposed by the planning authority on the site
The delivery time for the project (when the client wants occupation)
The balance between initial capital cost and the long-term costs
Cost (the likely costs)
The interpolation method is where cost analysis of buildings of the same type
is studied. This method permits the differing sizes and standards which exist
between buildings to be examined and taken into account when considering
costs.
The total cost of each building is generally expressed in a common unit such
as cost per square metre of floor area. Thus, the total cost of the building is the
cost per square metre multiplied by the total area of the floor space.
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Realistic estimate or
cost limit
Example:
Cost of Building A (quality X, floor space 5,000 sq.m.) is SR800 per sq.m.
of floor area.
Cost of Building B (quality Y, floor space 5,500 sq.m.) is SR1,000 per
sq.m. of floor area.
Special care needs to be taken with external works as published analysis may
exclude costs associated with site works, drainage, external services and
separate minor buildings.
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Some clients who deal with buildings of identical function find ‘functional unit
cost) is a useful method of comparison. Hence, the cost of the actual building
per functional unit is given in cost analysis for such purposes.
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Servicing
o Cleaning operation
o Prompt schedule basis (daily/monthly/yearly/etc.)
Rectification
o Early in life of the buildings arises from shortcomings of
design
o Poor quality of workmanship
o Unsuitable component. Example: not suitable floor finishes
o The main purpose of rectification is to reduce the
maintenance cost
Replacement
o Service condition materials to decays @ different rates
(wear & tear)
o Example: replacement of carpet
Renovation
o Consist work done to restore a structure
o Service by major overhaul to original design & specification
o To improve on the original design & specification
o Example: extend the size of server room due to current
need
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5.3:
7 TYPES OF MAINTENANCE:
• Planned Maintenance
• Unplanned Maintenance
• Preventive Maintenance
• Corrective Maintenance
• Emergency Maintenance
• Condition Based Maintenance
• Scheduled Maintenance
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1. Planned Maintenance
This type of maintenance is carried out with proper planning,
control and the use of records to predetermined plan.
Example: housekeeping/ repainting, etc.
2. Unplanned Maintenance
This type of maintenance is carried out to no predetermined
plan.
3. Preventive Maintenance
This type of maintenance is carried out at predetermined
intervals or corresponding to pre-described criteria and
intended to reduce the probability of failure.
Example: to test run generator set to check the working
condition/ protective coatings / water proof membranes, etc.
4. Corrective Maintenance
This type of maintenance is carried after a failure has occurred
and intended to restore an item.
Example: to replace faulty parts in lift motor room/repair of
crack/washes stain from wall. Etc.
5. Emergency Maintenance
This type of maintenance is carried which is necessary to put
in hand immediately to avoid serious consequences.
6. Condition-based Maintenance
It is initiated as a result of knowledge of the condition of an
item from routine or continuous monitoring.
7. Scheduled Maintenance
It is carried out to a predetermined interval of time, number of
operations, mileage, etc.
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Criteria:
Clearly defines work scopes & function
Every staff need to understand their job description
& responsibility so action can be taken if any
problems arises
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Criteria:
Structure was being set-up to make a simple geographical
division, based on number of areas
Each area should have approximately the same demands,
so that resource allocations and the defining of staff
responsibilities could be simplified
The size and structure of the organisation will depend upon the
following factors:
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Completing work
Identifying any additional work to be completed on the equipment
Filing written documentation for equipment history
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o Expertise
o Outsource / in-house
v. To consider impact of proposed capital works on
maintenance organisation
o To avoid burdening building owner from
large amount of allocation cause by
unexpected unplanned maintenance work
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Maintenance Execution
The execution of maintenance work requires a thorough
knowledge of what is required in order to determine the correct
sequence of activities and a realistic estimate of the durations of
these activities. A programmed of work can be then drawn up
giving all details of labour, plant and material requirement, the
dates that will be required on site and the length of time that they
required on site.
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Maintenance Inspection
Purpose of physical inspection and survey
Inspection in maintenance required knowledge regarding
buildings and its condition. The purposes of maintenance
inspection are:
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i. Accuracy
A report must be accurate in all respects as errors or vague
statements will detract considerably from the value and
credibility of the report
ii. Simplicity
Freedom from technical terms as far as practicable, and
where used they need explaining
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iii. Clarity
Presentation & arrangement of information should be in a
logical order with sufficient heading & sub-headings to act as
signposts
iv. Systematic Approach
Reports normally comprise three component parts:
a) Introduction: often containing client’s brief or objects
of report
b) Main body of report or recital facts: including a full
description of conditions as they exist
c) Conclusions and recommendations: often
including an estimate cost of remedial works
v. Conciseness and completeness
The report should cover all matters coming within its scope,
yet should be kept as concise as possible.
Neatness aspects covers among others clear & legible, free
from abbreviations & contradictions plus good grammar &
correct spelling.
vi. Certainty
Advice & opinions should be definite or the reasons for any
uncertainty stated (a saving clause is advisable to cover
hidden parts).
vii. Recommendations
Advice as to action to be taken
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Maintenance Evaluation
It is becoming much more commonly accepted that a new, or
newly refurbished building should be assessed / evaluate after its
completion to see how well it is performing. Post-occupancy
review studies by Leaman & Bordass, 1995 showed that many of
the buildings investigated did not function as well as had been
intended.
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One factor which people often fail to take into account when
considering house prices is the state of the property's boiler. A
faulty boiler can lead to serious and potentially costly problems in
the future, and replacing an old boiler that has come to the end of
its life is an expense no-one wants to have to deal with. It should
also ascertain the age and state of the electrical wiring in the
property, in case rewiring is required imminently. Other factors
affecting house prices, which might not be easy to spot and could
prove costly include:
i) Problems with structural timber
ii) Subsidence
iii) Leaks
iv) Damp
v) Fungal decay (dry rot and wet rot)
vi) Broken roof tiles
vii) Plumbing problems
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Since homes and their fixtures and fittings will decay naturally
over time, deferred maintenance and avoidance of general
upkeep is a common explanation for why some homes sell for
less than others.
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Here are 4 areas to focus on which will increase the value and
serviceability of a building.
1) Exterior Envelope
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2) Mechanical Systems
3) Interior
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i) Lack of Maintenance
A property's value can drop quickly if it is not properly
maintained. A host of hazards such as winter weather,
storms, leaky roofing and general wear and tear can lead
to serious problems like water damage, burst pipes, mould
and infestations if they are not addressed. Problems
caused by lack of maintenance can cost thousands of
dollars to remedy, and buyers may factor the extra cost into
the amount that they are willing to pay for a home. Even
cosmetic issues such as unkempt landscaping can
decrease a property's value.
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
Exercise 7
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
Extra Exercise
(TRUE/ FALSE)
2. Cracking occurs when undercoat has not hardened sufficiently before finishing coat
applied, and/or stresses within coating film.
(TRUE/ FALSE)
3. Pile foundation is used when raft foundation is not suitable due to uneven building
load and weak load bearing soil.
(TRUE/ FALSE)
(TRUE/ FALSE)
(TRUE/ FALSE)
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Module 104 Training Kit: Valuation/Cost Approach – Subject: Construction Material & Services
(TRUE/ FALSE)
7. Foundation is the lowest part of a building which transmits the load of the building
to the under lying earth.
(TRUE/ FALSE)
8. Travelator is used for moving people from one floor level to another.
(TRUE/ FALSE)
(TRUE/ FALSE)
10. Earthwork is a process to prepare the required formation level as in the working
drawing.
(TRUE/ FALSE)
174