As the year draws to an end many people will be receiving bonuses. Some people may be planning to use their bonuses to carry out long overdue renovations. Success stories of renovations carried out within budget and agreed-on time frames are very few and far between. One of our own team members recently renovated her home and she came out of the period of stress, trauma and drama with a few lessons (and possibly a much needed visit or three to the nearest psychologist). Because E &Y cares, we decided to share a few lessons that she learnt during her tumultuous time of renovating:
Never start renovations without approved plans!
Before you sign on the dotted line, obtain as many references for the contractor as possible. The references should include the contractor’s suppliers to ascertain that the contractor pays on time. She goes on to say that she noticed that the contractors “run out of money and start rolling money (which) results in buying inferior material”.
Many people are very eager to start building at the most cost-effective level and some contractors take advantage of this. The contractors will make many promises that they have no intention of keeping to secure the job while the homeowner is floating on cloud nine from costs saved and they end up running at a loss.
- Go through the contract with a fine tooth comb. If there are any vague phrases or terms, request clarity to ensure that there are no assumptions or fine prints.
- Keep a running file of the renovation project with every form of correspondence, invoice, etc to protect yourself should problems arise. Also, whenever a verbal agreement is reached, validate it by sending an email to have a paper trail and avoid misunderstandings.
- Ensure that all of the contractor’s workmen, plumber, carpenter, electrician and sub-contractor are properly qualified, registered and insured.
- Strictly adhere to the payment terms. Do not feel pressured into making additional payments.
- Include a penalty in the contract should the time frames be extended.
- Retain a minimum of 5% of the contract value once the renovations are complete and only pay that out once the inspection report is completed and is satisfactory.
- Wherever possible buy own finishes to get value for your money. The contractor may inflate the prices somewhat to make a profit.
- Include an escape clause to safeguard against being tied to a contract even though the contractor’s output is sub-par.
Finally, DO NOT assume that all builders know all aspects of building. It may be the first time that the contractor is mandated to renovate or build the way you would like. Always make certain that you are both on the same page.