Renovation projects are an exciting opportunity to breathe new life into a building.Lamentably, they’re also prone to shocking cost overruns and time delays that stem from defects hiding in a building’s walls or structure. Apart from impacting budgets and schedules, unforeseen conditions may likewise lead to discord between contractors and clients and waste time as finger-pointing slows the search solutions.
If you or your client are planning to renovate, read our guide below to find out more about the unforeseen conditions that may affect your project.
Why is it so challenging to budget for unforeseen conditions?
Upon entering a construction contract, the contractor acknowledges their responsibility to complete the scope of work as defined in the construction documents. To this end, the contractor’s estimating team must ensure that the scope of work is quantified with accuracy and priced correctly, and reflects the project’s design requirements.
Certain elements may be easier to put a price tag on than others. Most direct and indirect costs can be identified and calculated with a high degree of precision. In essence, all it takes is an experienced estimator and a clear, detailed set of drawings and specifications. It’s the hidden, unpredictable issues that so often emerge after construction begins that are difficult to put a number on.
What types of unforeseen conditions can affect construction projects?
The most prevalent unforeseen conditions are defects uncovered during renovations, such as rot, decay, damaged plumbing, outdated or obsolete electrical systems, and hazardous materials. Concealed code violations and defective work left from earlier projects, or original construction, are yet another source of delays and cost overruns. For new construction, unforeseen conditions are usually underground, such as poor soils, rock removal, or old utilities not clearly shown on as-built drawings.
Such “surprises” have varying degrees of impact on a project. For example, localized plumbing damage can be replaced without long delays or extra costs, whereas a rotted structure would incur substantial replacement costs and put the project on hold.
Rot and decay
Water and moisture find various means of penetrating wall cavities, be it through burst pipes, leaky roofs, or other building envelope penetrations. Once inside a cavity, water and moisture are capable of causing severe damage to wooden structures. Most Californians may remember the tragic incident in Berkeley, where a dry rot outbreak led to a balcony collapse and the deaths of 6 people.
If a renovation project uncovers rot infestations or decayed wooden structural members, the expenditures will inevitably balloon to address these vital safety issues before the planned work may proceed.
Deficient plumbing
A common source of rotting and decay, defective plumbing can hide inside the walls of a building for years before being found. If renovation work uncovers the issue, the ramifications can be wide-ranging. Loose-fitting, clogged, and broken pipes will need immediate, code-compliant replacement. The same is true if the discovered plumbing is still functional but made of older, undesirable materials such as galvanized or aged cast-iron.
While plumbing problems of this nature mostly afflict older buildings, new systems are not immune from the effects of clogging, amateur DIY fixes, and harsh drain cleaning chemicals.
Outdated electrical systems
Much like plumbing, electrical systems are often left forgotten behind drywall, only to resurface during a renovation. The ensuing costs depend on a lot of factors, such as the layout of the system and the building’s configuration. That said, a replacement is almost always mandatory to meet code requirements, improve the system’s capacity to handle modern appliances, and prevent fires.
Hazardous materials
Prior to the 1980s, asbestos and lead were mainstream components in various construction materials. Consequently, older buildings and homes may harbor asbestos in their drywall, floor and ceiling tile, insulation, roofing, and siding. Lead, meanwhile, was used to manufacture pipes, faucets, and fixtures, in addition to being a common paint ingredient. Coming across these perilous substances during a project will entail abatement procedures and the involvement of relevant, specialized trades.Building code violations
Building codes always evolve. In California, new versions are adopted on a triennial cycle, each raising the bar for various aspects of building standards. Given our location in the heart of Earthquake country, it’s not surprising that newer building codes demand more stringent measures to address earthquake loads and improve buildings’ seismic resistance.
Should a renovation project reveal a seismically unsafe condition, a retrofit may be mandated by the local building department to bring the building up-to-date with the new standards. This is certainly something that should be addressed early in the planning and design of the project, rather than waiting until construction begins.
Previous defective work
Building contractors don’t always do quality work. Deficiencies may go unnoticed or be intentionally concealed, making it difficult to predict what hidden defects may lie in wait for the renovation project. If unexpected anomalies of this nature present serious safety hazards and/or code violations, their remediation may take precedence over the renovation activities.Managing unforeseen conditions
Unfortunately, spotting unforeseen conditions before construction starts is easier said than done. Nonetheless, proper risk management practices can go a long way in limiting your project’s exposure to these hazards.
First, make sure to allocate the pertinent risks properly. It is the contractor’s job to deliver the project for the quoted price while adhering to the construction documents and their contractual obligations. Your contract should make it clear that the contractor must make all reasonable efforts to uncover potential defects and/or hazards, and budget for these risks in their bid. Wording your contract clearly may help resolve disputes and preserve a positive relationship with the contractor if unforeseen conditions start adding expenses to the project.
Second, budget accordingly. Expect to spend anywhere between 10-15% more than the cost estimate you get from your general contractor. The older the building in question, or the more loose the drawings and specifications, the more conservative you should be when calculating this contingency.
Finally, don’t wait for the start of operations to get a contractor’s advice about these challenges. Hire a construction management professional to assess the project and recommend a sensible strategy for managing unforeseen conditions.
