You have a contractor working on your home or business. They have been engaged for an extended period of time, and communication has been good, with positive results on the project.
At what point in the construction project or projects, can the owner feel comfortable enough to call this contractor YOUR BUILDER?
This is a typical question that is asked of me, whenever an owner is satisfied and beginning to feel comfortable. I believe they want to believe that there is a comfortable position on the builder’s side as well as their own, where they feel that all the tasks such as obtaining three bids for the work and the interviewing process can be eliminated, and the owner can actually officially call a builder, MY BUILDER.
In my opinion, of course, I am a builder, I would like to say that there is definitely a time, when a sense of trust and appreciation from both the owner’s side and the builder’s side can be created, that would allow this term to be used comfortably. Wouldn’t it be nice, if an owner, who has repeated work requirements at their home or businesses, could give the work to one builder that they identified as MY BUILDER.
The following list of conditions should be established prior to allowing this comfort level to become the norm.
1.) The builder will have to have performed several projects, both large and small, for the owner with success, financially, professionally and efficiently.
2.) The owner should feel financially satisfied, that the builder provided a level of work, and a scope of work consistent with the payments provided.
3.) The owner should feel comfortable with the builder in their home or business, and have total acceptance with the level and competency of the management staff of the builder.
4.) The builder should show an interest in becoming the only builder considered by this owner. There must be a level of appreciation shown by the builder to the owner.
5.) There should not be any financial concerns on either party. The owner must feel comfortable that the builder is paying their bills and the builder must feel confident that the owner will pay their bills.
6.) There should be a level of mutual communication between the builder and the owner, where communication is comfortable, open, and mutually beneficial to both parties.
7.) The owner must sense that the builder is appreciative of the opportunity for exclusivity.
8.) The builder should sense that the owner is both trusting, and appreciative of the good job that the builder is doing for the owner.
I understand that these ( 8 ) parameters tend to be a little over the top, and maybe the singing of Kumbaya would be appropriate. However, for an owner to select one builder, as the primary entity, responsible for all their construction projects, is a large step in trust and acceptance. For the builder to earn this position will require hard work and an honest attitude. Both steps are not easy, especially in the construction marketplace.
Once the owner has decided that this particular builder is designated as MY BUILDER, then there are a number of scenarios that should or could be established ( all dependent upon the relationship that has developed )
1.) The owner together with the builder can formulate a formal set of contractual requirements, that are standard for each project, that they both perform together. This contractual agreement can be signed on a yearly basis, which will allow any revisions found necessary during the year to be made. In this manner, the only agreement that will need to be specifically reviewed is a clean and simple explanation of the current project’s scope of work. The ” boiler plate ” would remain a constant for all projects.
2.) The builder should, on a yearly basis, submit a new updated insurance certificate to the owner for the work to be done the following year. In this manner the owner has a current certificate at all times.
3.) The owner should make a list of projects, with an importance factor identified for each project. What this means is that, if the owner wants the kitchen remodeled this year, it can be designated with a one. If this scope of work has a secondary importance, label the work as a two, if the item is just a wish list, label the item with a three. In summary, a list of owner priorities would be beneficial to the relationship and the builder can schedule his manpower accordingly.
4.) The builder should identify free time to the owner, without thinking that the owner will have a negative impression on the builder, if the builder indicates that there is time in their work schedule.
5.) The builder could establish a working yard or shed at the owner property to reduce the amount of cost to move material or equipment back and forth from the builders yard to the owners property.
6.) The builder could assign an employee to the owner’s account, to act as the liaison for the owner. This liaison could be the constant contact for the owner to coordinate and manage the owner’s work on the property.
7.) The owner, if substantially funded, could assign a full time owner employee to communicate with the builder on a one on one basis, if the scope of work was enough to fill the time of a full time employee.
8.) The builder could establish a monthly payment agreement with the owner, to relieve the owner of heavy financial obligations for one or two months, and less financial obligations for others. In this manner, the contractor can anticipate a certain value of payment each month, and the owner can keep the payments on a steady, even obligation.
1.) The owner should always be cognizant of the price structure by the contractor. Unfortunately, no matter how trusting the owner is with their builder, it is always necessary to keep the builder honest. This is not meant to cast dispersion on the builder, just a matter of being honest regarding the industry.
2.) The owner should contact vendors and suppliers of the builder on a periodic basis, to ensure that payments are being made by the builder to the suppliers.
3.) The insurance certificate must be kept current, and the owner must remain vigilant, when managing the insurance certificates of the builder and their associated subcontractors.
4.) The owner must remain diligent in requiring lien waivers for all payments to the builder. These are important no matter how strong the relationship is between the builder and the owner.
5.) The owner must remain in constant communication with the builder, to ensure that the work is being properly manned and scheduled.
1.) The builder must remain interested in the owner’s scope of work, and appreciative of the opportunity to be the owners ” builder “. Interest cannot be allowed to reach a taken for granted plateau. This will quickly destroy the relationship.
2.) The builder must remain competitive with pricing, and must not use the same subcontractors for convenience. Each subcontractor should be forced to remain competitive by the knowledge that other subs are bidding the work.
3.) The builder must remain cognizant of the workers employed on the owner’s projects. What normally will occur with a comfortable, long relationship, is the owner will attempt to directly hire the builders key people to perform the work. This situation must be monitored and carefully managed.
4.) The builder must remain diligent in the scheduling of the work, and effectively manage the construction, to ensure compliance with all the owners requirements.
5.) The builder must be aware that this mutual relationship will be challenged by other contractors. There will be a constant barrage of offers and presentations given to the owner by competitors. The builder must remain competitive both in price as well as performance.
For an owner to call a contractor MY BUILDER, there must be a mutual benefits to both parties. The owner must feel comfortable with the builder and visa versa. This type of relationship is definitely beneficial to both parties, however, like all good things, can easily come to an end, if either party is not appreciative of the relationship.