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A Building and Remodeling Checklist

Horror stories abound about remodeling and construction projects gone bad. Such stories make great "war stories", but they are likely to produce emptier bank accounts and headaches. Good planning is an essential component for a good project and prevents the most common pitfalls.

This Construction Checklist includes the steps associated with most successful remodeling and construction projects. Some may not apply to every project, for example: decks within 18" of ground level may not require a building permit, while building along a "wetland" or a shoreline will require a special permit; a project in a condominium may require approval of the homeowners' association, and so may a project in a subdivision which has covenants.

But the "basics" listed here remain the same in almost all projects. This checklist is designed to explain and help organize the construction process.

The Big Picture - "Why are we doing this?"

A Planning Process

Most construction and remodeling projects start as a result of a household reaching a stage in the life cycle that triggers the need to do "something" about housing. Some of these events include: the birth of a child, children going to school, the kids are growing but the house isn't, first time home buyers without children are just entering the world of work and/or home ownership, empty nesting, and retirement. Besides money, life safety, and life cycle concerns; some people just like working on improving and expanding their homes to modernize them or to improve upon or restore the original design.

The 'Wish List' is one way to clarify and review the reasons for doing the project. This method organizes ideas into categories. For example:

• The "Must Includes" (for example - a third bedroom, ample closet space, or a storage room)
• The "Would Be Nice If Possible"" (for example - a roof level deck, a hot tub, special windows, art studio space)
• The "Under No Circumstances" (for example - changing the style of the house, blocking sunlight from a garden space, or using disliked construction materials)
• The "Remaining Questions"" (A list of the questions "not yet answered" is a great way to make sure that such questions are not forgotten along the way)

Some Planning Guidelines

Keep in mind that:

• The primary purpose for a construction or remodel should be the owner's use and enjoyment of the house.
• Most individual construction projects and remodels will not "pay for themselves"; they will not increase the value of the property by an amount equal to that of the project's cost. Speculative construction and remodeling involves a great deal of skill, experience and risk and even professionals in the field loose money on individual projects.
• As with all real estate considerations, the location of a property is paramount. Before building or remodeling re-evaluate your property in terms of important factors such as: the neighborhood, proximity to work and play, transportation, and even solar exposure.
• Owners who plan to stay in a home for less than five years are usually better off restricting their work to repairs and simple cosmetic changes.
• The best return on the cost of remodeling is usually achieved when a "substandard" house is converted into one that meets the norms of the neighborhood. The price of the most luxurious house in any area will usually suffer from the lower value of the neighboring houses.

Consult construction professionals for additional ideas, but keep in mind that this project is for YOU.

Continue to review your wish list from time to time to see if the decisions you are making feel comfortable and fit with your original ideas and your budget.

Keeping a notebook will help you to organize your thoughts; include magazine clippings, color samples, reference phone numbers, photos and a record of the project, including receipts.

The Road Map - "Where are we going and how do we get there?"

A Project Budget

No planning process really makes sense without a budget. Start a project budget early and review this budget at every step of the process. Most construction projects consist of hundreds of items and details, an increase of a few hundred dollars here and there can destroy a budget. Before making planning or construction decisions, review the budgetary impact. You may not be able to control all of the cost changes, but you can set a realistic budget, with contingencies, and strive to keep the project within that range.

Discuss your budget with the various professionals helping you on the project. Let them know that you expect their help in developing written cost estimates and maintaining a budget.

The project budget must include some items which may not be part of the construction contract. For example:

• design work
• permits
• additional living expenses during actual construction
• specialty items, for example - utility hookups, lighting fixtures, appliances, curtains, etc.
• loan fees and any special insurance
• a contingency amount of at least 15% of the total construction cost (for smaller jobs, more complex or custom construction, the contingency amount will have to be much higher).

But all of those items can be accurately estimated and should be included in a total project budget.

A Timetable

Develop a timetable, or schedule, in the same manner as your budget. Work with your "construction team" (designer or architect, loan officer, interior design specialist, general contractor, specialty materials supplier, etc.) to document your needs. Your timetable must include a realistic completion date, considering time for the design phase, permitting and the construction phase. Identify periods of the year when certain construction projects are particularly appropriate or totally inappropriate (e.g., during a holiday season or roofing during periods of heavy rain/sleet/snow).

Many projects can and need to be phased into several stages of construction. A common reason for phasing a project is the lack of funds to complete the entire project at one time. While doing the whole job at once is often less expensive and less time consuming, phasing a project can work quite well if:

• A good plan is developed for the entire project at the very beginning of the process. This can minimize the amount of work that has to be re-worked during a later phase.
• Each phase is built in a manner that protects the structure. For example: we completed the exterior envelope of our cabin and have left some of the interior surfaces and cabinet work for a future date.
• All the work by a single trade can be completed in a single phase of the project. For example: All the foundation work is performed at one time.

But the most important key to the successful phasing of a project is good planning: detailed drawings and specifications and a good budget.

An Independent Assessment and Expert Help

An independent assessment of the proposed project by a home inspector, contractor, real estate professional, loan officer, designer, or architect will help you decide if the project "makes sense". Are there problems with the structure, property, location, proposed design that should be considered? This assessment should be made by a party not involved in any other aspect of the construction.

Choosing a Design Professional

Hiring a licensed architect, or a designer, involves careful research. Verify their license, reputation, references, previous work experience and compatibility with you - your personality, visual preferences and your approach to problem solving. Ask about fee structures and options, discuss project budgets, skills, and track record of managing the permit process and the design and construction budget. Note: even the purchase of a set of stock plans involves careful research.

Saving money or time on the design process will most often result in wasting money and time during and after the construction. A good quality design process that results in quality drawings and specifications is the best predictor for a successful project and a trouble free construction process.

Preliminary Design and Schematics

The preliminary design and schematics are basic drawings without a lot of construction detail. These plans focus on spatial relationships. They will help you visualize how the project might look and may identify some of the early problems. For example: does the proposed new staircase to the second floor addition interfere with other portions of the house? Is there enough head room in the existing attic to convert it into a master suite?

The preliminary design should be used to review the project with the local building authorities and to further refine the budget and timetable.

Construction Drawings and Specifications

You are now ready for the construction drawings and specifications that show the design, dimensions, sizes, structures, locations, shapes and some of the material selections - details and more details. Drawings must be clear and complete; the best drawings are those that conform to well-established architectural standards. The specifications provide narrative detail, including material descriptions, model numbers, colors, construction methods, standards and techniques.

The importance of this step in the process can't be overstated. It is the key to a good contract and a good job. Failure to have good drawings and specifications is one of the main causes of construction defects and disputes, cost overruns and legal problems. The devil is in the details, and the details must be clear and on paper.

Building Permits

The building permits must be obtained by the owner. The designer, architect, contractor or permit specialist can apply on the owner's behalf. Projects in some jurisdiction can receive a permit in a few days; others require weeks or months of waiting and review. Contact the local building department early in the project for specific conditions, requirements and permit timetables.

Pre-Qualifying Contractors

The pre-qualification of contractors allows you to decide the type of contractors you will invite to bid on your project. Soliciting a bid from a contractor unknown in the building community, or one whose qualifications you have not established in advance, is a waste of time for you and the contractor. The skill, quality, reputation and the specialty of a contractor must be determined before bids are solicited. Without a thorough pre-qualification process is will be impossible to tell if the prices quoted are meaningful.

Most states require contractors to be licensed and bonded, and in many states current records about contractor are on line. Checking references (especially recent ones), financial stability, previous and current work and reputation in the community are necessary steps in the pre-qualifications process.

How many bids should you solicit from pre-qualified contractors?

1-3 should be enough.

Selecting a Contractor

All bids must be based on one set of plans and specifications. Even then, you should expect to find a price range not to exceed 20 percent between the lowest and highest bidder. A bid outside of that range suggests someone has either made a mistake or does not want the job.

Select your general contractor based on everything you have learned, including price. If you have pre-qualified the contractor, have good plans and specifications and your contact with the contractor throughout the bidding/decision making process continues to be positive, don't hesitate to take the lowest price.

But if you are unsure of the contractor's qualifications and reputation, think that the bid price is too low and/or have not done your planning and design homework then don't go any further. The law journals are full of cases involving: low bids, unqualified contractors, poor contracts and inadequate plans and specifications.

Review the Construction Contract

Most construction contracts start with a standard building contract form such as an AIA contract. Such forms are available from many sources, including many stationary stores. The quality and complexity of these forms varies. These forms are usually intended as the 'cover pages' for the 'details' of the contract. Most of the 'details' are usually found in the plans and specifications.

Be sure to read and understand the construction contract and the bid document. Take your time, ask questions, and get everything in writing. Don't forget to review your Planning Process lists: will this contract fulfill your needs? This is the time to make any final changes.

Insurance Coverage During Construction

A review of insurance coverage by the various parties in a construction project is critical. Depending upon the specific conditions of a project, numerous insurance policies may or may not provide protection for loss and liability. Whose policy covers damage to stored material? Who pays for damage to the existing part of the house that is damaged during a remodel? Whose policy covers injury to uninvited visitors to the construction site? What will it cost to maintain coverage on the house if you must move out of the building during remodeling?

These and other types of insurance and liability questions need to be reviewed by insurance and legal advisors prior to the start of construction and the signing of the construction contract.

The Actual Construction

The Design Professional's Role During Construction

Architects, designers, and even home inspectors may be employed to oversee the construction process. This role can be written into the contracts and follow a scheduled and written process, for example, an architect may meet with the builder once a week. Alternatively, the owner may want to bring in an outside expert at critical points in the construction, or as the need arises.

No matter which process is chosen, the important step is to make sure all concerned understand their roles and the lines of communications.

The Construction Process

A pre-construction meeting is an important first step in any project. This is the time to go over any final details, including: meeting schedules, how to stay in touch, introduction to lead crew members, plus any final concerns.

Stay in contact with your contractor during the construction process. Try to maintain a middle ground between attention to the work in progress and breathing down the contractor's neck. Use your pre-arranged work review meetings to discuss progress and expectations, any problems or special arrangements and to maintain open communication with your contractor.

The general contractor is the construction manager: the organizer, scheduler, the supervisor of the crew and sub-contractors, the party responsible to carry out the construction contract. Any problems and concerns about the project must be communicated to the general contractor. The best communication is timely and in writing.

The contractor should provide you with a timetable for final decisions on any specifications not decided upon during the design process. For example, if the color of the carpet was not decided in advance, the contractor should provide you with a date by which the color needs to be selected. It is your responsibility to stay within that timetable.

PAYING THE CONTRACTOR ON TIME is one of the most important jobs of the client during the construction process. Cash flow is a major concern to all contractors.

Part of the construction contract must be the timetable for payments. Most remodeling contracts include an advance of 10% to 30% of the construction price and a monthly draw. Take the initiative and ask the contractor before the end of the month when the draw request will be arriving; it is usually paid before the 10th of the month. The draw request should be based on the amount of work and material delivered and completed to date.

Quick payment is one of the best ways to assure continued good relations with your contractor.

And, a bit of praise and a box of donuts for the crew go a long way toward securing an ongoing positive relationship. But even in such a small gesture it is important to keep roles clear: don't supervise the crew and subs; that is the general contractor�s job!

The Construction Mood Cycle

Every construction process that I have ever seen goes through a relatively predictable "mood cycle":

• The Honeymoon - Everything is new and progress is fast. The foundation work is dramatic, framing is fast and the new shape of the structure is taking shape. The project appears to be ahead of schedule.
• The First Problem (�The Honeymoon� is over) - It may not be a major issue, but it demonstrates that every construction project has some flaws. (This is an excellent time to take another detailed look at the plans and specifications with the contractor. Look for any overlooked items, make sure that weekly meetings are set, re-affirm the need for timely decisions, and keep all decisions and requests in written form.)
• The Doldrums - The project seems to have slowed down to a crawl. The first phase of the framing is very fast, last details are slow. Moving the specialty subs is slow, the plumbers, the electricians...
• Where Did Everyone Go? - It's elk season, a family emergency, the day after thanksgiving or before the 4th of July...
• The Cast of Thousands - At the beginning of the project it was possible to remember some names but now there are new subcontractor crews on the job every day. Do they know what they are doing? Do they care about this project? Is this project under control? How will the thousands of unfinished details get done?
• The Light at the End of the Tunnel - The interior surfaces have been installed, cleanup has started, a finished product becomes imaginable, but will it ever be done?

This mood roller coaster is somewhat inevitable, it's 'topography' will be largely determined by the quality of the pre-construction steps: planning, design, contractor selection...

Change Orders

A good set of plans and specifications will keep change orders to a minimum. Using the 'no surprise rule' is essential:

• A formula for any additional work must be included in the base contract. This formula must include hourly and markup rates for any unanticipated work.
• Any anticipated changes must be identified by all the parties as soon as they are discovered.
• All change orders must be in writing and signed by the owner and the contractor before the work is done.
• Some unanticipated work may have to be done on a "time and materials" basis, e.g. repair of hidden defects. Even then, it must comply with the formula in the base contract, and should include a "not to exceed" price limit. Take time to review any change order and, if necessary, bring in an outside expert to determine the validity of the price and the necessity for the change order.

Managing the change order process - the number, content and cost, is one key to keeping the project within the limits of your budget.

Some Final Details

The Punch List

A 'punch list' is a final 'to do' list.

Toward the end of the project, a punch list will be developed jointly by the owner and the contractor, and/or a design professional. This list provides the contractor with an organized method of finishing all the remaining details. It is part of the final payment process.

The best punch lists are developed after the cleaning of the construction site has been completed. Yes, cleaning is part of the contractor's (written) responsibility, without a thorough professional cleaning, small blemishes can't be seen and/or corrected.

The punch list should be short: one page, 12 - 20 items. If it gets much longer than that than the development and management of the list becomes an onerous task and damaging to the contractor/client relationship.

The final payment may include a holdout of as much as 10% of the contract, withheld by the owner until all items on the punch list have been completed. The actual amount of the holdouts is usually related to the value of the items on the punch list.

Callbacks

Most construction will require some callbacks, involving repair of items which were overlooked or not properly installed during the final punch list process. If these are small items, you may be able to make a list over a period of several weeks and have the contractor take care of several items during one service call.

By the way, a good question to ask during the contractor pre-qualification process is related to how the contractor dealt with any callbacks.

Warranty Items

If the contract contains a one year warranty, then it is a good idea to notify the contractor of any important defects as they occur. A list of any minor defects should be collected for 11 months. After that date this list of these defects should be presented to the contractor with a request that the work be completed during the twelfth month.

What to do When Things Go Wrong

Well planned constructions projects have a very low failure rate. But construction is a complicated process and problems will arise. So here are some steps to take whenever construction problems arise:

• Don't wait! Act Now! If you think that there might be a problem take the appropriate steps to solve the situation ASAP.
• Keep all communications lines open, stay calm and respectful. Assume that there is good will on all sides but insist upon a timely clarification and resolution of all problems
• Don't hesitate to bring in an expert: an inspector, a lawyer, an architect, or your loan officer. Spending a few dollars to catch a problem early is relatively inexpensive.
• Get all information and all agreements in writing. If the plans are inadequate, have some additional plans drawn up by a designer or architect. If the specification were inadequate, make sure that they are upgraded at this time.
• Don't succumb to "construction-speak." Construction is complicated and full of terms that most people don't know and don't need to know. But all residential construction can be explained is plain everyday language.
• Use this opportunity to find out if there might be some other areas of misunderstanding or a lack of clarity (and make sure all is now in writing.) For example: if the current problem is a window in the wrong location, this is a good time to take another detailed look at the plans and specifications.

About the Author

George Guttmann has been a home inspector and construction consultant since 1978. He is the publisher and primary author of The Sound Home Resource Center (SHRC), one of the most popular and authoritative home improvement and construction sites on the Internet.