So you are taking the plunge and building your own home. You’ve finally decided to go ahead with those improvements to your home or office. Before you dip into your pocket think about these ten things.
- You are the Project Manager
When you decide to build a house or complete any type of renovations on your property with your hard earned money or loan please remember that you are the Project Manager. This is extremely important. Private individuals without fraud insurance handing over large sums of cash to any construction company to complete their work is not advised. You or a member of your family must dedicate time to working with this company on a daily/weekly basis to get your job done.
Do not relinquish your hold on your resources! Always ask questions so you can make decisions in your favor.
- Get an agreement.
Before you pay you need to sign and get a copy of a contract which includes what you are paying for and when to expect it. It should also outline who is your contact at the company and the fact that you need to be consulted for approval at agreed stages of the project. Always refer to and keep to this contract, changes to the contract should be re-negotiation and a new contract/addendum be presented in writing.
Save your paperwork, paperwork is king.
- Ask for a detailed project projection
If your project is going to last three months or more or even less you should know what the weekly deliverables are. Deliverables should always be attached to payment. These should be written down and attached to your contractual agreement.
A contractor who gets paid when he delivers has an extra incentive to deliver.
- Ask for a detailed estimate
Many people begin a project with a summary of resources and deliverables over an agreed time-period however you must also get a detailed estimate, which should include:
- Cost of management of the project
- Wage projection for the period, which clearly lists the number of workers on the project, their expected number of hours and their salary over the period. Every single person that is to be paid goes on this list, so you can calculate your weekly wage bill.
- An estimate of materials – each item listed as needed should have a cost attached. Once you have the time, you should review your materials list and purchase items yourself; feel free to ask your company representative to recommend the places to purchase items or give you advice on the selections or even come with you. Some items e.g. tiles, toilets sets, external brick design really need your personal touch and should be done in collaboration with the company.
It’s your money; ask how it is being spent and don’t be afraid to spend it.
- Ask for receipts
Never relinquish money unless you have a corresponding signed and/or stamped (company stamped) document that can be held up in court.
Make sure you can account for every transaction.
Ask about payment options
This is where your detailed estimate comes in handy, at a glance you can see the actual spend needed to complete the project. So let’s say you have been presented that in three months the project will be completed and the deliverable will be met at the cost of $50,000.
Option 1 – Pay the full fee upfront – Never take this option.
Option 2 – Pay a down payment and complete payment in three/four equal parts – this is acceptable once it is hinged on deliverables and not just random dates.
Option 3 – Discuss payments options: You don’t have to break the bank and can ask for a fluid contract where you pay as the project moves along.
For example you can agree to pay:
- Cost of management of the project: in equal parts, again this should be on deliverables
- Wage projection for the period: Since you know the wage bill you can make a two weeks deposit and agree to keep that ratio constant, always two weeks in advance.
- Materials: This is an area where you can order your own materials to keep your materials bill down.
- Negotiate for better deadlines if you need it.
Always ask if it can be done faster, contractors give themselves more time than needed. If time is an issue, say. Don’t just hope for the best. If you need to move into the house by Christmas, they may think giving you the keys Christmas Eve is ideal when you really want it a week before.
Be precise with deadlines, speak dates and time and send them a follow-up email confirming what was discussed so you have it in writing.
- Visit the site regularly
Keep checking on those deliverables and speak up if an item promised in week 1 isn’t on schedule. Ask how is this going to affect the end of the project? A contractor who knows you’ll notice if something is off will try harder to make sure nothing goes wrong.
I never forgot my father saying, you have to finish this week. If you don’t, you pay yourself to finish it next week.
- Include an exit clause
Your contract should include a way to get out of it. The project may not work out to be what you expected and you may need to get your money back and move on.
Hope for the best but plan for the worst.
- Promise a good a bad report after the job is completed.
My granddad did his house in parts and he would say well if you do the extra room okay I will see about giving you the driveway. Test the waters. You’ve met someone new, with a good track record but you still need to test out their work ethic. Hire them to do part of the job and watch the results.
Let people prove themselves; stop taking everyone’s word on faith.
You may say this is too much for a small contractor but you know what, governments and public agencies ask for so much more and these same companies fill out the paper work because they want the job. These same companies start government’s jobs with no down payment while using your money to fund both jobs.
People will respect you when you respect yourself, your money and your ideas.
If you are thinking about starting a construction project in Trinidad or Tobago, reach out to MasFab Construction Services, they will be there with you from foundation to finish.
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