Identifying Risks in Renovations

Updated: Apr 15

"It is such a small project. It will never happen to me." Believing that you are the exception is a common pitfall when it comes to risk management on a renovation project. Any number of potential problems emerging before, during and after the project's construction can result in costly delays, change orders and ongoing liabilities. By identifying some of the common risks that plague even small projects, one can take preemptive measures to minimize them.

Risk #1 - Delay in Condominium Approval

Condominium renovations usually require approvals from the condominium board and the building's engineer. Approvals are contingent on satisfactory review of scope drawings and contractor license and insurance certificates as submitted in the condominium's alteration agreement. Avoid pursuing controversial renovation scopes that triggers additional scrutiny and review, such as breaching "wet over dry" rule, or substantially changing the fixture layout.

Risk #2 - Delay in Obtaining a Building Permit

Some scope of work may require a building permit from the local building department. You must allow time to hire a licensed architect or engineer to prepare the application and documents for a building permit. The timeframe for permit review varies greatly depending on the disposition of your local building department. Don't try to perform work without a permit because reported violations can result in heavy fines and suspension of work.

Risk #3 - Problems with the Product

Building products and materials may arrive late, damaged or defective. Some might be incompatible with existing building systems. One might only discover the problem during construction and replacements may not be immediately available. Being flexible and nimble with your design can help you react quickly and find substitutes.

Risk #4 - Discoveries Upon Demolition

You never know what's behind the wall or under the floor. Demolition can uncover hazardous conditions that require immediate attention, such as the existence of mold, pests, and asbestos. Remediation measures will most certainly interrupt project progress and may be costly depending on severity. Be mindful of the demolition work's disruption on your neighbors and their adjacent spaces. Disruptive noise or worse - accidental damage - can bring costly complaints and liabilities from your neighbors.

Risk #5 - Contractor Disputes

Your relationship with your contractor may change as construction progresses. Circumstances may cause standoffs and disputes, and in some rare cases, you have to fire your contractor. It's never easy and always costly to ask a one new contractor to pick up where another left off. Where does the responsibilities for project outcomes end and begin? How do you document the current condition so the new contractor can fairly price the new works?

Risk #6 - Future Adaptability

Good renovations should address practical needs throughout its lifetime. Important features such as shut-off valves and substrate reinforcements should be built into the walls to facilitate future fixture upgrades or accessibility grab bars installations. Be sure to store extra tiles in case of future repairs. It may be impossible to find the same tiles for future replacement needs.

Being vigilant of potential risks allows you to take precautions so they don't develop into larger problems. It is prudent to have a contingency budget and to work with trusted vendors and partners to quickly and effectively meet manage these risks should they emerge.

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