Maintenance and repairs in financial returns

Q. What is the difference between routine maintenance and repairs, planned aintenance and repairs, and major repairs and what should be shown where in each of the financial returns?

A. Where possible, the Corporation would like to see consistency in the information it collects across the different regulatory returns. The definitions for different  types of maintenance and repairs below have been summarised from more detailed definitions in the published Regulatory and Statistical Return (RSR) guidance and will be useful for associations when they are completing the financial returns FV5, FVA. We recognise, however, that the treatment of maintenance and repairs expenditure in our financial returns must follow the treatment adopted in the financial statements, and this guidance should not therefore be seen as prescriptive.

We are aware that some associations have a category of repairs that they class as 'void/re-let/turnaround' repairs that they have grouped together and show under only one of the repairs category headings below. We hope that this guidance will help associations to divide these repairs up appropriately and show them under the correct headings.

Routine Maintenance (day-to-day maintenance)

FV5 line 111, FVA line 57, FV3 line 57

Routine maintenance is day-to-day maintenance and repairs, i.e. minor repairs that are unplanned and are not major repairs. Some associations have a category of repairs they call 'responsive repairs'. This category of repairs would usually be classed as routine maintenance. Routine maintenance includes emergency repairs, urgent repairs, and routine repairs. Typical examples of these types of repair are included below:

• Total loss of water;
• burst water main;
• blocked main drains, soil pipe or sole toilet;
• minor plumbing leaks or defects;
• blocked drains, sinks, basins, bath, toilet;
• defective cistern or overflow; dripping or leaking taps or shower units;
• other plumbing repairs.
• Total loss of electricity supply; major fault with electricity supply; unsafe electricity fittings; minor electrical faults.
• Total loss of gas supply; gas leak; blocked flue.
• Heating or hot water faults or breakdown; heating or hot water loss for elderly or vulnerable tenants, or during the period 31 October - 1 May.
• Severe storm, fire, flooding damage;
• roof leaks;
• severe dampness;
• blocked gutters, repairs or clearing of gutters and down pipes;
• repairs to external walls, brickwork, slates, tiles, plaster work, fences and paths.
• Failure of lift, warden alarm or call system entry phone;
• faulty communal TV aerial;
• breaches of security to external or internal doors and windows;
• graffiti;
• repairs to doors, windows and floors;
• easing doors and windows.
• Repairs to kitchen fittings;
• repairs to tiling;
• damage to stair treads or hand rails or banisters;
• general joinery repairs.
• Repairs to void property;
• other minor day-to-day repairs or replacements.

Planned Maintenance (cyclical maintenance)

FV5 line 112, FVA line 58, FV3 line 58

Planned maintenance and repairs includes planned and cyclical repairs and improvements being carried out to maintain the current standard and value of the accommodation, for example:

• Repainting;
• Patching roofs;
• Replacing windows.

Some associations (particularly LSVTs) that have an approved asset management strategy in place might argue that as all the repairs and maintenance detailed in their asset management strategy are planned for, they fall under planned maintenance. We would, however, like to see associations following the definitions set out in this note wherever possible, i.e. only maintenance that is cyclical in its nature should be included in planned maintenance.

Major repairs

FV5 line 113, FVA line 59, FV3 line 59

Gross major repairs maintenance expenditure to the extent that it is a revenue item. Major repairs are remedial works necessary for a property that has previously been let by the association to remain habitable. To qualify as a major repair, the work may be of a type which might involve the decanting of tenanted housing. Major repair works include:

• Structural repairs to maintain the basic functions of stability and weather resistance in the main structural elements of a dwelling, i.e. floors, walls and roofs. Major works to these elements will involve replacement or substantial reconstruction of the component element. 
• Building services installation and replacement. E.g. renewal of installations such as gas, electricity and water supplies; heating and ventilation; and lifts. 
• Site works (to the area around the dwelling and essential to the safety, security and protection of tenants). E.g. the replacement or substantial reconstruction of unstable boundary walls, steps, footpaths, etc. 
• Consequential and other works necessary as a result of major works, such as making good to finishes and fittings. 
• Works significantly improving the dwelling that have not been capitalised.

Any major repairs works that significantly improve the dwellings should probably be capitalised. Inland Revenue guidance for the treatment of major repairs expenditure for tax purposes may provide some guidance on this. However associations should also refer to the appropriate accounting standards and the latest SORP as the treatment for financial reporting purposes and tax purposes may be different.