As the owner of a building under renovation, you have to decide how much day-to-day control you want to have in the process. It is particularly natural for someone who is new to the renovation process to adopt a lassaiz-faire approach. There is a whole new language to learn, and it can be difficult and intimidating to question a contractor or design professional until you truly understand an issue.
It is important to keep in mind that it is your money paying for the job and you are the one who will have to live with the finished product! You will still need to be involved in resolving the inevitable questions that crop up - from paint selection to quality control, the buck stops with you.
This section covers some of the key management tools you have at your disposal.
Many people view preparing drawings and getting permits as an unnecessary burden imposed in an authoritarian manner. Everyone involved in the construction industry has heard horror stories of overzealous inspectors that simply can't be pleased. I am asked regularly by clients to commiserate on the needless headaches inspired by the permitting and inspection process.
In select cases, I agree. Sometimes I see people put through the wringer over a relatively minor issue. However, for the most part I understand that building codes, permitting, and inspections serve a vital and important purpose. Most people actually do have problems judging for themselves what is safe and what is not, and reaching beyond one's level of expertise can have fatal consequences. Perhaps someone who leans towards an individualist philosophy could make a case that we should all have the right to be as unsafe as we see fit. The problem comes in when one person's unsafe actions begin to impact the rest of us.
Building codes are not just designed to protect unsafe people from themselves but also to protect the general public: fire fighters, future occupants, next door neighbors . Those people, who don't have any control over someone else's building, can be killed in a fire or structural collapse they had nothing to do with - building codes aim to protect them. Cities are better off as a whole when we can expect that ALL of our buildings meet certain safety requirements.
Here is the extreme case: I have been in a house with an illegal basement "bedroom" that was wired with extension cords spliced together. Not only was the "wiring" exposed, incorrectly sized, and certainly drawing more power than allowed, but adequate exits did not exist. In the case of a fire, the young child that had obviously lived down there would most likely have been toast.
That's a far cry from installing a new outlet, but I would rather fall on the side of safety.
Consider the following situation: You hire a general contractor to renovate your kitchen and as part of the work, your contractor subcontracts with a plumber to relocate the sink. When you receive a bill from the contractor, you assume that the plumber is subsequently paid. However, if the general contractor neglects to pay the plumber, the plumber (or any subcontractor or supplier in the same situation) can file a "lien" against your property for the amount owed.
Such a lien is charged against the future sale of the property and you cannot transfer title until the lien is paid. Therefore you could be forced to pay for the plumbing work twice: once to the contractor, and once to the plumber.
A "lien waiver" is a document that helps ensure you will not be forced to pay twice for work performed on your property. Many lenders require signed lien waivers from all subcontractors before they will release funds to the contractor. In general, this is a good idea because it ensures that everyone has been paid what they think they are owed.
If you are paying for the work out of pocket, you may request a signed lien waiver before you write your check. In general terms, a lien waiver should include the following information:
This language may take several forms, so if you are concerned about its enforceability in your situation, you should have a lawyer take a look at it.
Most lenders require borrowers to purchase "title insurance" to protect against unknown liens against the property you are purchasing. Liens may be discovered during a title search and can jeopardize your closing if not taken care of appropriately.
In many cases (and for a variety of reasons) an owner or contractor may want to deviate from the architectural drawings. Some common reasons include discovery of an unforeseen condition, availability of certain products or materials, design changes, and feasibility. In some cases this deviation will cost additional money due to increased time or materials cost to the contractor. It is also possible that the change will result in a savings to the owner.
Whatever the case, when changes to the contract amount need to be negotiated there is potential for disagreements to arise between the contractor and owner. As with any interaction where both sides have legitimate claim to some portion of the truth, a peaceful resolution is all in the approach.
Keep the following things in mind as you seek a positive resolution:
It is reasonable for the owner to ask (nicely) for a written description of any change to the architectural drawings and a written summary of how the contractor arrived at the additional amount. In contractor-speak, this is a "Change Order Request", or COR. The COR should include a description of the discovered conditions, proposed remedy, and the proposed cost including overhead and profit. The owner may want to ask for a breakdown of time and materials for the proposed remedy. He or she can then sit down with the original contract, the architectural drawings, and of course the existing work to decide whether the proposed work should be covered under the contract or is truly above and beyond. The architect may also be of some assistance in evaluating the validity of the COR (perhaps an hour of time would be worth the expense).
Asking for an explanation of the costs in writing will often inspire a contractor to be reasonable in his or her requests. There is obviously a gray area when it comes to interpreting the results of this query. You can run to Lowes to check the proce of a 2x10, but who determines whether a time estimate is "reasonable"?
Some things to look for:
The owner don't want the contractor to walk off the job or to cut corners because he or she is angry and/or losing money on the job. The contractor doesn't want the owner telling 1000 other renovators about his or her bad experience. The key will be open communication and the impression that both sides are honestly working towards an agreeable solution.
Neither side wants to end up in court, but that could be a potential last resort if an agreement can't be reached. Litigation will likely extend the project timeline.