Unaccounted costs, material shortages, disaster/damage, and delays can culminate into a plethora of fees and necessitate cost adjustments that spread your investment too thin or altogether exceed it. With that said, this article is here to assure you that there are many counter measures that can be taken to ensure cost control.
Where Can Fees and Costs Come Up?
Schedule, cost, and quality are the three primary aspects of construction and each serve as important points of detailed review.
Specialty permits, materials, and engineering
Custom work and special materials can serve as a point of volatility. Specialty permits, material acquisition fees, and engineering costs can occur and hike your cost above your expected budget.
Project/timeline delays
Much of your project can be entirely out of your control. If a permit was missed, weather or disaster damage occurs, material is not arriving on time, or finish dates are being accelerated, unforeseen extenuating costs may come into play.
Cost allowances
A contractor’s use of allowances can be a potential component of hidden costs. Allowances are price placeholders. Generally, they are a label used in the budget to account for appliances and materials procured later in the project. While the use of allowances inherently are not an improper practice, too much of the use of cost allowances can lead to budgets being lower than the actualized price.
Lack of communication
A primary component to any of these common pitfalls is a lack of communication. A client’s money and time is directly tied to the ability of the contractor’s cost transparency. Mismanaged budgets, miscommunications, and faulty timelines at their core, stem from a lack of proper communication. It is integral that the contractor you choose is transparent every step of the way.
Countermeasures
To avoid hidden fees, it is important to get a detailed and thorough contract that holds both the client and contractor accountable. Make sure to get detailed estimates, clarify what is and is not included in the services being paid for, and how prices can potentially change. A good contractor will be transparent, thorough, and ensure that there are contingencies in place.
Clarification and Contingency
Contingency plans are an important aspect of ensuring your investment is not affected. A clear sign of a good contractor is one that integrates contingency plans. Timeline buffers to account for unforeseen delays, liquidated damage clauses, and sorting contingency fees by respective teams are just a few common countermeasures.
A fully communicative and competent contractor should be reticent to integrate contingency paths or have them already drawn up.
Fixed Prices
To avoid allowances being a point of contention, ensure the budget is primarily fixed prices. Discuss price limits with your contractor and set up a system where you as the client are alerted in cases where allowances are surpassed.
A Third Party
In some cases, the hiring of a project manager may be preferable. Acting as a third party, they will keep all groups informed and accountable, acting as a member that ensures the smooth flow of the project.
Cost Transparency At MODAA
We at MODAA believe that a fully transparent and communicative process is integral to the success and quality of a build. A MODAA experience is one where countermeasures are integrated, contingency plans are well developed, and your time and money are of the utmost importance to us. Being proactive is a central part of who we are and what leads to the success of a build. Our excellent project managers and team of vendors prioritize not only the quality of the build but the quality of the experience.
