As an owner, you are likely feeling an onslaught of stress and pressure at the prospect of completing a construction project. Construction is notoriously time-consuming, expensive, and potentially hazardous. It’s no surprise many owners are concerned about evaluating any present risks, reducing their costs as much as possible, and making the overall process as seamless as possible.
Consider the following tips for cutting construction costs and reducing risks:
- Refinance, as it can help you cut construction costs, improve your loan terms, and take advantage of low interest rates, rising property values, and available financing.
- Obtain proposals from competing contractors in order to choose the best job for you.
- Cap your construction costs to a guaranteed maximum price. You can also require that any work must be approved before it takes place.
- Expedite the negotiation and drafting of construction contracts, as well as any lien and claim waivers.
- Enforce deadlines and liquidate damages in order to encourage work being completed in a timely manner.
- Include any protections necessary, such as insurance, indemnification, payment and performance bonds, and lien and claim waivers and releases.
- Ensure the contractors and subcontractors can obtain permits and approvals that are legal, up-to-code, and following all ordinances.
- Don’t be vague, as this can be used against you.
- Limit your liability as much as possible, and this includes obtaining and reviewing all insurance policies to ensure they are current.
