Handling Major Construction Projects
How should your HOA community handle major construction projects?
No matter how new or impressive your community property is, you will have to deal with major construction projects over the course of its life.
When considering primary repair and replacement projects for a condominium or homeowner association, many questions will come up that may not be easy to answer:
Where is the problem?
What are the rules in regards to this area?
What is in our best interest as a community?
When should the project start?
It is vital to start with a plan. Our expert property managers will help you manage the project from start to finish, hiring consultants and contractors as necessary.
The Costs and Risks of Major Construction Projects
The first thing we would need to do is diagnose, define, source, and manage the issue. According to Consumer Reports, it is essential to know the problems that can occur if you don't consult with your community association. Your community could suffer from:
Budget over-runs
Extended closure of common areas
Ineffective repairs that result in additional work or wasted funds
Unplanned special assessments
To pay for the construction project, the board and general contractor should agree on a payment schedule before the project begins. Payment for major projects should be made at least monthly. It's good to remember that HOAs should retain 10 percent of all payments until the end of the project. Doing this protects the association against poor quality or unpaid bills by the contractor.
A conditional lien release from subcontractors and suppliers is necessary to have for any request for payment. It keeps track of any payments currently due to them, and a statement of final payments already received by the HOA.
Once the contractor submits his progress billing with all the correct documentation, payment to him should be prompt. If you delay payment, it could:
Increase project costs
Complicate the contractor's cash flow
Reduce the contractor's goodwill
The project becomes more difficult to handle
With decent financial planning, the HOA should be able to pay the contractor within fifteen days.
Hiring a Professional for Major Construction Projects
Condominium Associate's is here to help you find the ideal advisor for major construction projects. We help you find someone that is
An experienced contractor with relevant, practical expertise
Focused and ready to satisfy the needs of the community
Unbiased toward any particular solution
Reasonably priced
Once work is underway, frequent communication between team members is essential to maintain the project flow.
Obstacles of major construction projects include:
Changes in conditions (e.g. weather issues)
Changes in scheduling
Change of orders (work that is added or removed from the original contract)
To keep the process flowing as smoothly as possible, we recommend that the HOA be involved in the following terms. Please note that this is the minimum level of communication for project management. Your HOA can be more involved in the process.
Communicate Daily - The construction manager and general contractor's superintendent need a daily point of contact with a board member that can represent the HOA.
Communicate Weekly - The construction manager and the general contractor should meet weekly to discuss how the project is going and what is around the corner. They should also note if there have been any schedule or order changes.
Communicate Monthly - The board of directors and construction manager should have monthly meetings. During this time, they should discuss the full monthly report and next month's schedule. Again, jot down any schedule or order changes.
Considering a Major Construction Project Soon?
Condominium Associates is here for your HOA. We provide the most professional guidance and information to make your major construction project a success. Contact us today!