We will soon need to say goodbye to the principles of gross external area, net internal area and net sales area when measuring residential property.

International Property Measurement Standards (IPMS) for residential property have been published by the IPMS Coalition. The RICS has said 'over the coming months RICS Professionals will be encouraged to share their expertise and shape the Professional Statement to include IPMS: Residential Buildings as an update to the Code of Measuring Practice.'
Once the Professional Statement has been updated, surveyors will be obliged to use the new IPMS rather than the current Code of Measuring Practice 6th Edition unless their clients instruct them in writing to use a different measurement standard.

How will this affect legal documents?

Development agreements that require planning permission for a minimum area of residential development (rather than a specified number and type of residential units) may be affected by the new standards. Instructions will be needed on the correct IPMS standard to use and any variations to the standard that are required.
If a planning application or planning permission refers to plans showing the residential properties to be built and those plans contain references to the new IPMS standards, you will need to check that the planning authority are aware of the new standards and do not include references to gross or internal areas in the planning permission itself. Otherwise there will be confusion over which standards are to apply.

Section 106 Agreements may also require minimum or maximum areas to be built for social housing or other commercial or residential uses. New section 106 Agreements may need to be amended to refer to the measurement standards for residential property once they have been adopted by the RICS.

Overage agreements where a housebuilder agrees to pay overage that is dependent upon achieving sales above a certain price per square metre will need to be clear which measurement standards are to be used to calculate the overage.

What will the impact be on measurement?

When the International Property Measurement Standards for offices were introduced earlier in 2016, measurement surveyors were able to identify that the new standards would lead to differences in measuring floor areas of between roughly 2% and 10% (depending on the age and configuration of the building). We have not yet heard of any assessment on the likely impact of IPMS on residential measurements.

New terminology

The new residential standards include a number of different bases for measuring property. The new measurement standards are:

  • IPMS 1 (External) - used for measuring the area of a building including the external walls.
  • IPMS 2 - Residential (Internal) - used for measuring the internal area of a residential building.
  • IPMS 3 - Residential (Occupier) - used to measure the floor area available for the exclusive use of an occupier. This standard comes with three separate ways for measuring the area available to an occupier. The version to be used must be specified:
  • IPMS 3A - used for measuring the area of a dwelling including the external walls.
  • IPMS 3B - used for measuring the area of a dwelling excluding the external walls but including the floor area occupied by internal walls and columns.
  • IPMS 3C - used for measuring the area of a dwelling excluding the external walls and the floor area occupied by full height, permanent internal walls and columns.

The future

The residential IPMS are one of a series of standards being published. The standards for offices were published earlier in 2016. The residential standards will be followed by those for warehousing, retail and mixed use property although there is no definite timetable for the publication of the remaining standards. We will let you know when they are published.