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Understanding The Relationship Between Homeowner And Project Manager

 

There are many different relationships between parties to a home remodeling or home renovation project. The most important of these is the relationship between you, the Homeowner and the Project Manager.

There are also various ways in which managing a home remodeling and renovation project can be structured:

  1. You engage a Designer, who also acts as Project Manager
  2. You engage a building contractor, who also acts as Project Manager
  3. You engage an independent Building Project Manager
  4. You act as Project Manager
  5. You act as Project Manager in conjunction with a Construction Consultant.

So let's kick off by defining the how the roles vary for both the Homeowner and the Project Manger based on these different combinations. I find it's easier to see the differences using the matrix below:

The numbers in the heading row relate to the project management combination described above. H=Homeower; P=Project Manager.

  1 2 3 4 5
PROJECT TASKS H P H P H P H P H P
Plans Project                    
Manages Design Phase                    
Contracts Main Builder & Suppliers                    
Manages Timelines                    
Maintains Project Records                    
 
CONSTRUCTION TASKS H P H P H P H P H P
Schedules Materials & Work                    
Engages Subcontractors                    
Manages Material Supply                    
Manages Contruction To Spec Plan                    
Inspects & Approves Subcontractors Work                    
Manages Disputes                    
Manages Changes                    
Manages Construction Quality / Inspections                    
Manages Regulatory Compliance                    
 
FINANCIAL TASKS H P H P H P H P H P
Manages Project Finance                    
Pays Subcontractors & Suppliers                    
Manages Progress Payments                    
Manages Project Budget To Contract                    
 


Designer Manages Project

Designer - designs project, contracts construction, manages material supplies, arranges inspections [or does them].

Homeowner - you need to be careful that any design faults identified during construction are dealt with fairly and not left to the builder to deal with a designer who may attempt to cover up their fault. Ensure that your contract with the Designer provides for additional costs caused by errors in design.

The advantage of a designer managing the project is that they are very conversant with the intent of the design and can make changes rapidly if required. They also act as independent inspectors of quality of subcontractor and contractor work before any payments are made.

Designers also have established relationships with Regulatory & Compliance bodies should any difficulties arise.

 

Builder Manages Project

Builder - subcontracts project tasks and works with suppliers to provide the materials and labor.

Homeowner - will contract a builder to oversee the entire remodeling construction but manages the finance availability of the project; ensuring the necessary finance is in place for the project and is available for distribution to the contractor according to the progress payment plan outlined in the Contract. The homeowner manages all major payments to the contractor, but the builder manages payment to the sub-contractors.


Considerations

  1. Even though the builder is managing the project overall, you as the homeowner can decide your desired level of involvement with the builder.
  2. Most homeowners rely on the builder's judgment and experience in selecting subcontractors and buying materials.
  3. As homeowner you can decide upon variations such as to who approves, pays and inspects various aspects of the work. Your degree of involvement largely depends upon your trust in the builder, how much time you can afford, or just your desire to be more involved.
  • High Involvement - you approve subcontractors and frequently check the project plan for progress on both work and budget.
  • Minimal Involvement – engage an independent inspector to review sub-contract work after set stages such as: framing, plumbing, electrical.

Subcontractor & Supplier Payments

When a builder manages the project, they will generally manager all payments to subcontractors and suppliers, and manage the budget to plan.

Budget to Specification Plan

The builder will advise the home owner of any variances and should seek written approval for any amounts over the agreed variance percentage, defined in the contract.

Contractor Payments

Contractor payments are usually made at set points during the project term. As the contractor has procured materials and labor on their own account, it is important the you make these payments on time so that they can pay their suppliers and subcontractors. Do not make any progress payment until you have completed an inspection against the project plan to ensure that the work for that stage has been completed to satisfaction.

Subcontractor Payments

If you are managing subcontractor payments, regardless of whether you do the reviews or have someone else do them for you - Never approve or make payment until the inspection has been satisfied in accordance with the project specification plan.

 

Homeowner Manages Project

If you choose to act as the project manager for your project, you effectively become the owner-contractor and will be actively involved on a daily basis.

Many homeowners are excellent organizers, but home remodelling and renovation projects do need a bit of specialized knowledge. If you have been through several home projects before, you may have acquired this knowledge and be quite capable of undertaking this challenge.

Project management also takes a lot of time, so make sure you have both the time and knowledge to carry out this task otherwise you risk not only frustrating your subcontractors but making a complete mess of the project.

If your time is limited, but you still want to retain total control over the project, you may consider engaging a supervisor or independent builder on a hourly basis. This can be quite a good option, as builders generally have their own network of suppliers and subcontractors that you will be able to tap into.

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