To understand what quantity surveyors do and why they are needed.
Quantity Surveyor
工料测量师
By Jianpeng Deng
Updated on 12/11/2022
What is a quantity surveyor?
“A quantity surveyor is a tertiary qualified professional who specialises in building measurement and estimates the value of construction costs.” (from bmtqs.com.au)
Certified quantity surveyors are usually registered under The Australian Institute of Quantity Surveyors (AIQS).
What does a quantity surveyor do?
“A registered quantity surveyor is responsible for estimating and monitoring construction costs for all classes of building and types of construction.” (definition from Victorian Building Authority)
When do you need a QS?
(Based on my experience only)
Pre-construction Phase
Cost Estimating
A QS can provide his/her client with a cost estimate on how much a new construction project may cost. The cost estimate can be measured by either elements or trades depending on the project stage as well as the level of details the client is after.
The client may use the cost estimate as a guide to making decisions on whether he/she should go ahead, make changes to the existing building design to lower the budget, or even kill it.
Tendering
In most cases, a QS is used when his/her client does not know much about the construction industry. A QS is helpful, especially in the tender process, because he/she can advise the client about the current market prices of supply and labour costs as well as the type of contracts should be used. Also, a QS can lower project costs and risks by screening out unreasonable quotes, dodgy builders, sub-contractors, etc.
It is always good to have a QS in tender meetings because builders will then be aware that ripping off the client will not be easy in front of a QS.
Value Management
Sometimes a QS is hired to get involved in the early design stage, discussing how to minimise project costs with builders and architects. A QS’s inputs include change of building design, selection of building materials, and the amount of costs that might occur if the building changes its location or direction.
Initial Report
Initial Report is prepared by a QS to inform the clients about the status of projects, including whether registered construction consultants have been used, whether insurance policies have been purchased, and whether all necessary paperwork has been approved before the construction works start.
Progress Claim
A QS is hired to monitor construction progress on behalf of his/her client and normally do progress claims monthly. Progress claims allow a QS to understand whether the construction is on track based on the ongoing project cash flow; for example, if the actual claim amount is much less than the estimated claim amount up to a certain stage, it could mean that there is a high possibility that the project will be delayed and the client should be notified.
On the other hand, a QS is responsible for preventing builders from overclaiming the works they have done. Overclaim could mean many things, which include builders are dodgy, builders are not good at paperwork, builders are not good at managing projects, or builders are going to finish the project earlier than expected.
During Construction Phase
Post-construction Phase
Tax Depreciation
When a client wants to work out capital works deductions for his/her rental properties but does not have a record of the construction costs, a QS as one of a few qualified persons can be selected to do the job.
Also, a QS can further reduce tax bills on rental properties by preparing a schedule of depreciable assets, which is a separate deduction for the decline in value of depreciating assets in rental properties (ATO).
Construction Lawsuit
Sometimes a QS is hired to get involved in a construction lawsuit as an independent party to provide professional opinions. QS professionalism can be of help in many ways, such as, giving an opinion on whether a builder has undertaken all the necessary means to avoid project delay, providing an estimate on whether a property should be demolished or altered, and providing a perspective on who is liable for a particular building cost.
Replacement Insurance Valuation
‘Sum insured’ is a figure you need to know before buying insurance, because you will end up paying too much premium if you set the figure too high or your property won’t be covered enough when shit happens if you set the figure too low.
QS can produce a report showing how much it needs to reinstate or rebuild a property if anything happened to it.
Capital Gain Tax Valuation
Generally, if a property is sold for a gain, capital gains tax (CGT) will apply. Clients need two figures to calculate the gain, one is the sold price and the other is the purchase price.
It is not uncommon that clients lose the document to show the purchase price, and this is when a QS kicks in and comes up with a report that shows a de-escalated cost of the properties which can then be used to calculate the CGT.
Indemnity Valuation
Insurance companies sometimes need this valuation to process insurance claims. QS can be hired to make a report to advise insurance companies about how much a building is worth at a particular date.
For example, a building was built in 1950 but was burnt to the ground in 2020. A QS will be hired and will first come up with a cost that is estimated to be required to reconstruct the building to its original state, and then reduce this cost to its residual value on the day that the building was destroyed.