Renovating as we say it is the 2nd love affair of every Australian. With the new year up and coming, let your renovation plans start off right . In planning your renovations maintain control of the scope and progress of the work and of course, the costs of your renovation project. Without a good control system in place you may find that you are unawarely,letting your builder control the work and even the costs, which could leave you seriously out of pocket and past your deadline. even worse renovating way past your deadline.
Look out for these warning signs that says your project may not be going quite as well as you've planned and scheduled
1. High Petty Cash Frequency
Make sure you have a properly written Payment Schedule for any project which is linked to the progress of the work. Do not pay for work that has not been done yet. Even if you agree to pay something up front like materials or a mobilisation fee, this should be accounted for and clawed back, as a percentage from each subsequent payment. A well constructed Payment Schedule will ensure you only pay for works that are completed and up to standard. The intervals between payments should also be agreed and form part of the Schedule. For example you may agree to make a payment each week, or each month, so a short time before the agreed date, the builder should submit an application for payment, based on completed or part completed work. You should be able to check this has been done, before you make the payment.
2. A Blurry Scope of Works
Even before you get any quotes, you should take the time to prepare a complete and detailed, Scope of Works. This will state exactly what you want done and the steps involved, from start to finish and will be the basis ( along with the project drawings ) for the quotes you receive. The Scope of Works should include everything from the excavation to the painting and is probably the single most important document in the project. It will take some thought and time on your part, but will be well worth while. You don't actually need to know how to build in order to do this, simply know what you want. Any competent builder will then use that to calculate his quantities and work out his quote.
3. You find yourself asking the builder to do little extras.
This is dangerous territory. What looks to you like just a little job, may well cost a lot more than you expect. Especially if it is an alteration to work already started or even finished. Be aware that anything that gets changed may well cost three times what it originally cost. This is not necessarily profiteering - it could well be the real cost. Think about a scenario where you decide to move a window perhaps 300mm. Just a tiny job you may think. But the window is already in, so that cost is included in the quote. However taking it out, altering the opening, moving the lintel and the cavity closers, reinstalling the lintel and the window then making the walls good, could easily cost three times the original quote. The multiply that by all the little changes and very soon your budget could be under serious strain.
The way to avoid this is by forward planning. Take the time to plan n and write the Scope of Works accurately. Study the drawings and make absolutely certain that everything is as you want it, before even getting quotes. It is far easier and much cheaper to alter a drawing or a document than to alter the buiilding.
4. Your builder asks for extra payment to cover things he says were not included in the quote.
This is common practice, particularly when the project has not been meticulously planned. For example, if you ask for a quote without a detailed Scope of Works, you are effectively letting the builder quote for what he thinks. This can mean that an unscrupulous builder can omit things which he may well know need to be done, in order to keep the quote artificially low, in the hope you will take the lowest price without checking. Then he can charge you whatever he likes for the " extras ". I have actually seen quotes that have used smaller quantities than required, just to keep the bottom line artificially low. If this is allowed to happen, it can have devastating consequences. You could find your self unable to finish the project because the costs have risen far beyond your budget.
The way to avoid this is to plan the project carefully, have a detailed Scope of Works, use a Quote Comparison tool which will highlight any discrepancies like this and have a robust Schedule of Payments in place from the outset.
5. There are periods when no-one is working on your project.
If there are times when no-one is on your project - perhaps with the excuse that they are " waiting for materials " or " the plumber is tied up on another job " this is a sure indicator that something is seriously wrong. It is highly likely that the builder is short on cash flow and is trying to get other jobs under way, to generate some revenue. A day or two, on occasion, may be forgivable, even justifiable, but of there are longer periods of absence the alarm bells should be ringing.
A typical scenario may be that the builder needs cash, so will move on to a new job, perhaps one which is not well managed, make a start and get a payment up front. He can then use that payment to subsidise another job, of pay his merchant account, or whatever. Inevitably the money will not be used for the job it was meant for. If that happens to be your job, then you are in serious trouble and need to make some hard decisions quickly.
The way to avoid being the victim of this sort of practice, is to have a structured management system in place, before you even go out for quotes. That way, when you ask any builder for a quote, he knows you are serious, you have structured the project properly and there is no room for dodgy practice.
Of course, you can avoid all these pitfalls and, by putting these principles into practice, ensure your project is the success it should be.