Blueprint to a Successful Renovation

House being renovated

Clear and effective communication is key!

15/03/2019

You have decided to embark on a renovation project and you’ve made a well informed choice for a general contractor. At this point, you need to be in charge of how that relationship will proceed, and not be at the mercy of the contractor’s whims. It’s always best to begin these projects with clear boundaries and expectations. It is your home, it is your renovation and therefore you call the shots. Here are a few tips on how to manage your general contractor.

Setting the contract

The contract you create will form the basis for your engagement with the vendor you’ve chosen. It must include a host of details, but chief among them are:

  • Start and end dates of the project.
  • Project details spelled out as a “Scope of Work” document and include all materials and work to be completed.
  • An agreement on who is purchasing what materials and fixtures, if you wish to do some of the buying yourself.
  • How the work with be phased, with start and end dates for each phase.
  • Payment schedule structured around completion of phases and not calendar days.
  • A blank ‘change order’ which you will use for the change management process (see next section)
  • Provisions for inspections such as plumbing or electrical that are required for code compliance.
  • Provisions for cleaning up debris and taking away any scrap associated with the project.
  • If you plan to continue living in the home while the work is going on, make sure there are provisions for keeping dust, dirt and debris out of areas where you will continue to reside.

An important note here on deposits. Consensus among professionals here is that a deposit should not be required for any reason. The payment schedule will pay for materials and work as it is provided and no up-front payment should be required. The contract itself is a ‘good faith’ gesture and the contractor should be capitalized enough such that they can purchase required materials with their own money.

However, if you have decided on a contractor who insists on a deposit, this should be no more than 10% of the entire project estimate and the reasons for needing to provide this deposit must be sound and should ring true and reasonable with you. If you have any negative feelings about providing this up-front payment, speak your mind and walk away if you can’t reach an agreement with which you are comfortable.

Change management

The larger your job, the more opportunity there is to encounter unexpected or unanticipated situations. If you are renovating an older home, chances are that your contractor will find areas where more work is required or additional materials are needed in order to properly finish your project. This could include unforeseen plumbing or electrical issues and sometimes even structural issues which were not apparent until work or demolition began. These circumstances will probably add time, materials and costs to your project and these additions must be agreed to and tracked throughout the project.

Stipulate in your contract that all changes in scope (materials, labour, project timeline etc.) must be covered by a change order and approved in advance. If your contractor doesn’t have a ‘change record’ form, create one. The form should have space for a complete description of the required change, a list of new materials (if applicable) required to accommodate the change, the associated cost of the materials, additional labour costs involved and any change to the project schedule this will create. The form needs to be signed by the homeowner and the contractor prior to work being done or materials purchased. In this way, the original contracted price, plus any change records will allow you to know your final project costs and potentially a new completion date.

Payment Holdbacks

At each instance in the payment schedule where you write a cheque to your contractor, you are allowed to withhold up to 10% of the cost in accordance with the construction lien act for your province. This hold back is in case a subcontractor is not paid by your contractor and places a lien on your home. In most provinces, builders and contractors have between 45 and 60 days to place that lien, so the 10% holdback is due to your contractor once that time has elapsed and you have verified there are no liens on your property. If your contractor hasn’t used any subcontractors for the work, this won’t be necessary.

Tips for a Successful Renovation

Choosing the right contractor for your project goes a long way toward a successful outcome but here are a few tips for the homeowner that will help ensure a positive experience.

  • Establish open and honest communication with your contractor at the outset of the project.
  • Be flexible to changes, particularly those that won’t have any material impact on the end result.
  • Be prepared for unexpected issues that may impact cost and timing.
  • If you are working with both a designer and a contractor, get them together as a team from the beginning of the project.
  • Don’t sweat the little stuff and try to trust your contractor. After all, you went to a lot of effort to choose them.

Renovating your home is a great alternative to moving, but it requires careful planning and execution on the part of both the homeowner and the contractor. In the end, when the efforts come together well, it’s a satisfying experience. If you haven’t already read our article on How to Choose a General Contractor.

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