Summary:
Is there a 100% chance of being completely ready for the reality of a development endeavor? Of course not. But clear communication, well-defined agreements, and a comprehensive job scope can help your developer grasp your goals and budget.
Since you will typically work with your developer for about 18 months, it is crucial to establish open communication about your expectations at the outset of the partnership. An open discussion of the budget can make the difference between a project completed at a reasonable cost and one with complexities that have caused it to run over budget and into other problems.
Consider the following talking points with your developer before assuming that the budget is locked in stone.
Aspects-To-Consider-For-Budget
How, Why, and What
Construction projects of any size are expensive. For this reason, it’s crucial to be ready for any issues that can develop without going overboard. Before starting the discussion on “how” the process will really be carried out, the first steps of development should not only begin with understanding the “what” but also the “why.”
Make sure to communicate your objectives, demands, and expectations for outlining the how component once you have determined your vision and why it is consistent with the business model. You must be aware of the developer’s plan for resolving problems that may arise during a project, such as changing the designs or running out of materials.
Monitory Purpose
The next logical step should be to have site conditions and any existing documentation examined if you believe you and the developer are on the same page. This will keep you informed if the scope expands, and your budget is exceeded.
Manage the overall scope by creating a thorough work letter between yourself and the landlord/developer to prevent unplanned work that causes cost overruns.
Requirements for Reporting Change Orders
In keeping with the principle of open communication, both parties must be dedicated to making cost-related choices jointly and promptly throughout the construction process. If a change order needs to be issued, it will be vital to have this strong foundation in place.
The construction contract should specify how change orders will be computed and effect schedule adjustments and delays to allow for a more straightforward process when dealing with them.
Managing Design
Unless otherwise specified in a lease and development agreement, you ultimately have the creative control of the design input and final approval, whether it’s a build to suit or tenant improvement.
Value engineering can be used to assess the suggested design approach and solutions, cost estimate, and reduce redesigns while talking about the design stage. Keeping the project’s objectives in mind, true value engineering magnifies all alternatives while enhancing function and quality.
There is no infallible way to ensure that you are fully prepared for the reality of a development project; nevertheless, by creating clear communication, well-defined agreements, and a thorough scope of work, you may ensure that your developer is aware of your goals in accordance with a shared budget.
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