Home > Finance > Allowing For Contractor's Costs When Renovating

Allowing For Contractor's Costs When Renovating

By: Chris Hogan MSc - Updated: 16 May 2012 | comments*Discuss
Property Renovation Renovate Homes

Contractor’s costs form a large proportion of the budget for any renovation project so it’s vital to keep control as the project progresses. It’s disheartening to watch property programs on TV when the punter admits that they do not know what the current spend is, or how far over budget they are at any one point.

Why Does This Happen?

There are generally three reasons for losing control of the spending. The first is that something has occurred that is out of anyone’s control and this has meant emergency action. The second is that the owner of the project is not talking to contractors regularly to find out whether they are on schedule in both time and money terms. The third is that they have asked for extra work to be done that was not covered in the original quote.

This of course assumes that you have followed the advice in our other articles, to barter with suppliers and contractors, get at least three quotes for every job and pick the right one. You should also do as much background work on contractors as possible, getting personal recommendations and checking their industry accreditations. Go for fixed price contracts if you possibly can, then the onus is on the contractor to do the job as quickly as possible.

Acts of God

The first problem outlined above is when something unavoidable happens, such as a flood hitting the area. In this case, you can only pay up and deal with it, and hope that the contingency fund that you set aside in your budget (you did do that, didn’t you?) will cover it. It’s worth pointing out that it is possible to get insurance policies that cover development, although they are aimed more at personal liability. But it might be worth finding out.

Note that discovering an extra cost, like, for example the roof being in a worse state than you thought, or rising damp in an area you were expecting to be able to leave alone, is not something that’s beyond anyone’s control. This simply means that you did not do your preparation correctly and skimped on the survey.

Keep Your Communication Channels Open

The second instance is much more common. Once a job is under way it’s human nature to let people get on with their jobs and trust them to deliver, and if we check up on people a lot it feels like we’re badgering them. But if you don’t keep up a dialogue with your contractors, then you not going to know whether they are on time and on budget or not.

This is particularly true if the contractors are relying on you or a project manager to get their supplies in on time. If a bricklayer can’t lay bricks because he doesn’t have any, then it’s reasonable for you to pay him for his time even if he’s not doing anything.

It makes sense to catch up with everyone working for you at least once a week. This doesn’t have to be belligerent, you just need to check that all is well and deal with the things that aren’t. Specifically you should check that everything is on budget, particularly with time and materials contracts. You should also make sure that every contractor knows what the other contractors are doing and that they know which work needs to be completed, by when, so that the next piece of work can begin without delay.

Extra, Extra, Read All About It

In doing this, you should be covering yourself for the third problem, when extra work is done. Now it’s reasonable on both sides, both client and contractor, that if extra work has been requested, then it needs to be paid for. The problem arises when the client asks for something new or different and the contractor assumes the client will be aware that this will result in an extra charge.

The contractor probably needs to point this out and give an extra quote for the additional work, otherwise what often happens is that at the end of the job the contractor presents a bill, which is more than the customer expects, and all hell breaks loose. At your regular meetings things like this should come out of the woodwork and can be dealt with then. It could be that the extra work has come about because one contractor has had to undo the work of another, but again, if you are talking to the contractors regularly, this shouldn’t happen.

Take Charge

The main thing to remember is that it’s your money being spent, and you have a right to check up on how it’s being spent. If you shy away from this then you will pay the price.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
Why not be the first to leave a comment for discussion, ask for advice or share your story...

If you'd like to ask a question one of our experts (workload permitting) or a helpful reader hopefully can help you... We also love comments and interesting stories

(never shown)
(never shown)
(never shown)
(never shown)
Enter word:
Latest Comments
  • Holland&holland
    Re: Getting a Renovation Grant
    Were in the process of placing an offer on a very large welsh property. Built in the 1700s by a very well known architect. Its in a…
    26 April 2019
  • Junick
    Re: Getting a Renovation Grant
    I own a cottage that we bought as a garage/store. It has no electric or water to the property but it was owned at one time by the…
    4 April 2019
  • Art
    Re: Adding A Porch
    Just bought new house need to build porch.. please contact on 07445430526
    3 April 2019
  • Ang
    Re: Getting a Renovation Grant
    Hi We are buying a semi detached stone cottage built around 1814. It is not habitable . Are there any grants we can apply for ,…
    1 February 2019
  • Sheza
    Re: Renovating a Pond
    Hi I have a raised pond on my decking and I’m thinking of ways in how I could add to it so it’s bigger but I’m currently struggling in how I…
    26 January 2019
  • Dav
    Re: Adding A Porch
    Hi I've build a porch to the front of my home, it a detached house with a garage that comes out 600mm passed the front of my house which is included…
    13 January 2019
  • Mitch
    Re: Getting a Renovation Grant
    @Vicky - you won't get a grant for this sort of revovation. No one is going to pay you to renovate your own home, sorry. Not these…
    17 September 2018
  • Dan
    Re: Adding A Porch
    Hi I’m thinking of building a porch on the front of my house and I was wondering if I can join it to my next door neighbors house because I’m in a…
    16 September 2018
  • Vicky
    Re: Getting a Renovation Grant
    Hi I am looking for funding to reinstate a farm house that is over 100 years old and has been derelict for 30years. Do you know who I…
    15 September 2018
  • woody56
    Re: Adding A Porch
    I am looking at building a porch within the 3 metres guidelines so not needing planning permission. It will have approx 750mm brick base with…
    8 August 2018