10.1.1 If the Assets may be transferred to the Authority at no cost on the Expiry Date (i.e. no residual value risk has been transferred to the Contractor) (see Sections 25.2 (Assets where the Authority retains Residual Value Risk) and 25.6 (Valuation of Terminal Payments on Expiry where Residual Value Risk has been Transferred)), the Contract should specify what condition the Assets should be in at such time. It should also specify the arrangements for a survey of the condition of Assets before the end of the Contract to assess whether such standards have been met. The costs of the final survey are normally borne by the Authority subject to recovery from the Contractor where the survey finds that rectification work is needed.
10.1.2 The Authority may agree with the Contractor (around the time that the final survey is carried out) to a relaxation in the requirement upon the Contractor to transfer or deliver the Assets to the Authority in the required condition (and to a relaxation in any associated performance standards and availability requirements),in order to share consequential savings (see Section 9 (Hard FM Maintenance Services)).
10.1.3 Where there is a residual value payment to be made by the Authority to the Contractor reflecting the market value of the Assets at that time (see Section 25.6 (Valuation of Terminal Payments on Expiry where Residual Value Risk has been Transferred)), then a survey will only be needed as part of a valuation, so that the condition of the Assets1 is reflected in any price paid on expiry.
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1 That is, the physical Assets referred to in the definition of "Assets".