Summary: Time is crucial during commercial real estate construction, so be mindful of potential delays. If you know what to watch for, you can resolve timetable delays more efficiently. No one wants delays, right?
To avoid having your project take longer than expected due to delays, it’s critical to be aware of them ahead of time while working on commercial real estate development.
Let’s examine some common project development issues.
Contractor Claims Delays
In the event of a delay, the contractor must notify the owner/project manager, and a project manager will be responsible for handling claims from independent contractors. In the event that the contractor sustains any kind of damage, a claim could be submitted.
- Excusable Claims
Putting these different assertions into the category of “acts of God” is the most effective approach to remembering them. In situations like these, the property owner cannot hold anybody else accountable for the delay. Conditions such as weather, fires, and epidemics are just a few examples of things beyond the control of the property owner and contractor. The validity of certain assertions is, however, open to debate; in this regard, much rides on the discretion of the project manager.
- Inexcusable Claims
Under this category, no provision will be made for relief, and the contractor will be responsible for devising a plan to make up for lost time to prevent further delays. Depending on the circumstances and the deadline, certain contractors may be required to labor nonstop. In contrast to claims that can be justified, inexcusable claims are those that could have been anticipated and circumvented with adequate planning. The amount of time lost due to an unjustifiable claim is the source of the most significant cause for concern because this time will need to be made up for, either through an increase in the budget or a reduction in pay.
Communication Delays
Communication is one of, if not the most important aspect of project success. Things have the potential to rapidly deteriorate if one or more of the parties involved are unable to communicate effectively.
- Gaps In Communication Between The Contractor, The Tenant, And The Developer
A communication breakdown might make it difficult, if not impossible, to obtain the necessary details at the proper moment. Everyone involved must be informed for them to be able to plan effectively as a development project progresses. Employees can be left without crucial information if insufficient communication is involved, which can lead to errors and ultimately cause costly delays. Make sure that everyone is kept up to speed to prevent anyone from making improper decisions.
- Failures In Communication Lead To Disorganized Lack Of Site Coordination
A lack of communication may hamper those who are attempting to gain access to the site, and the presence of an excessive number of personnel may compromise their safety. Especially if employees cannot reschedule their shifts, this can swiftly create turmoil and discontent. This may happen, for example, if the installation of the window frames is delayed. Before the contractor that installs glass arrives at the date that was initially arranged for them, there will need to be prompt communication with them to let them know that glass installation cannot yet take place. These mistakes could give the appearance that your communication is unprofessional, call for rescheduling, and eventually cause delays.
Material/Labor Delays
A general contractor will handle the scheduling of both the workers and the materials. Before deciding on a contractor, it is important to research their previous work, find out what others have to say about their credentials, and check that they have insurance.
- Unfortunate Circumstances That Lead to A Deficiency In Materials
Unforeseeable or excusable elements can come into play, which are beyond the control of everyone involved. The pandemic caused by COVID-19 affected the supply of both labor and materials used in commercial development. There were a lot of materials that were heavily damaged by COVID-19, such as refrigerators that were manufactured in China, and their factories are still having difficulty ramping back up.
- Labor Shortages Slow Development
Prior planning and preparation are required to avoid beginning construction without the necessary components, such as materials and personnel. Because there is a shortage of manpower, waiting around for it can easily push up expenses and further delay down the timeframe for the building project. Your construction project will be delayed even further if fewer personnel are available to work on it. Because of the toll that global health impacts have on labor, there is an increased need for workers now compared to yesterday.
Delays in Schedule
Everyone involved in the project’s development is working according to a timeline. Because it allows for coordinating costs and expenditures, time is a significant resource. Your development project should always adhere to a timeline, and changes should be made to guarantee that the operation is carried out without any hitches.
- Critical Delays
The projected end date of a project is drastically altered when there are critical delays. Construction can come to a standstill if essential milestones, such as the delivery of owner-furnished equipment are not met because a development program ran into major delays. A general contractor may have trouble making up the time that was lost, which would result in the timeframe of the project being pushed back. Because critical delays have a particularly negative influence on-site coordination, all parties must maintain communication that is both clear and concise.
- Excusable Delays
The property owner and manager do not influence any delays that can be considered acceptable. These problems might appear out of nowhere, and it is ultimately up to the property owner to find a solution. The deadline will typically be extended if a delay can be justified, and more money will need to be added to the budget. Examples of this include labor shortages and the effects of the weather.
Budget Delays
Your spending plan is an essential component that has to be monitored. If you run out of money, your project may come to a complete and total halt. It is essential to plan for unanticipated expenses and always have a safety net ready to fall back on if your development project requires additional financial support.
- Cost Of Materials
Experiencing delays due to the cost of resources is possible if their costs surge owing to the shortage. This may have an immediate effect on the expense of the building. In the end, if the project runs over budget due to the expense of the supplies, it can cause delays. Because the cost of materials is ultimately beyond the contractor’s control, it is in everyone’s best interest to ensure that all materials are acquired before the beginning of the building project and that monies be left aside in the event that goods become unavailable.
- Cost Of Labor
The building sector must have longer wait periods because there aren’t enough workers. In 2021, there will be around 1.4 million more individuals looking for employment than there will be positions available; hence, construction businesses will be able to boost their pricing despite needing to offer higher compensation to remain competitive. The availability of personnel and the quantity of contracting contracts a construction firm has on their schedule both impact the cost of labor for the construction company. Prefabrication is one approach that construction businesses are employing to mitigate the effects of the current labor crisis. This refers to the process in which components are manufactured away from the location, typically in a factory, and assembled at the destination. This can reduce the expenses of labor and speed up the process; nevertheless, skilled people will still be required throughout the process.
Because delays can be incredibly destructive to your project, you should ultimately be prepared to deal with any complications that arise. If you are aware of what to keep an eye out for, you will be better equipped to navigate and resolve any delays in the timetable in the most effective manner possible.
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