Real Estate Development – Ways to Avoid Costly Mistakes During Property Development Construction!

Once the building contractor is on site and the project is underway – it really is an amazing feeling when you start to see your real estate development project start coming up out of the ground.

Where a developer is planning to sell some or all of the units, marketing activity starts the moment finance is secured. The construction phase is usually the most expensive, therefore we carefully manage the project during this stage.

We schedule regular site meetings with our Building Contractor, typically every week or two, to discuss any queries or potential problems and we make sure our Building Contractor has fulfilled their Occupational Health and Safety (OHS) obligations fully.

Remember that it’s the Building Contractor (not the Owner or the Architect) who represent themselves as the expert on erecting buildings. Therefore it’s never a good idea to tell the Building Contractor how to build the building instead we instruct the builder as to the desired result to be achieved, not how to achieve it.

We pay our Building Contractor progressively, either monthly or at the completion of each scheduled construction stage, using draw-downs from the construction loan.

It is not unusual for the Building Contractor’s claim for completed works to vary from their schedule so it is important to make payments only to the value of the completed work.

Some real estate developers appoint an independent building inspector to review the quality and amount of work at each progress payment stage as this sends a message to the Building Contractor to be on the ball. This could be your Architect or you can find a good Building Inspector from the Master Builders Association in your area.

We try not to make changes after construction has started, as they usually end up being costly, and delay the completion date. If changes are necessary to the original contract scope of works or finishes, we request the Building Contractor advise us in writing what the variation to the original contract sum and the delay time will be so we can approve it BEFORE he makes any changes.

Before the handover at final completion, we have a joint inspection of the project with our Building Contractor (we also recommend with the architect and/or building inspector present). A list is made of all the defects and problems that need to be fixed by the builder before the building is officially handed over.

Simply, the developer’s aim under the contract with the building contractor, is to produce the designed building on time, within budget and at the quality standard that has been specified.

Therefore, during the construction stage, it is essential that a savvy developer (or their appointed project manager) monitor the progress and cost of the construction work to ensure that the project is delivered on-schedule and on-budget.

Any time extension from the plan/schedule or variation in cost will potentially affect the profitability of the property development project.

The building contract generally will detail the developers/owners responsibilities. Depending on the contract chosen, these responsibilities will typically include:

* to ensure adequate access to the building site

* to pay progress payments promptly

* to insure the completed project, after practical completion

DELAYS AND EXTENSIONS OF TIME

These are many reasons why delays occur during the construction stage, causing the late completion of the project. Many of these reasons are outside of the contractors control and some of the most common of these include:

* bad weather

* a delay in receiving necessary information from the developer or the consultants

* technical problems

* industrial disputes

Most standard building contracts will allow the builder to clain an “Extension of Time”, for delays caused by factors outside of their control. The practical effect of these extensions is to adjust the Completion Date that was agreed in the contract.

However, where the building contractor is responsible for the delays, either through a lack of programming or for any other reason, the building contract will frequently include for the payment of Liquidated Damages to the developer.

In these circumstances, where the project is delayed beyond the Completion Date noted in the contract, allowing for any extensions of time, the final payments to the contractor will be adjusted for liquidated damages, in the amounts stated in the contract, for each day the completion is delayed.

RISKS DURING CONSTRUCTION FOR A DEVELOPER

As the construction phase is usually the most expensive stage of the entire property development process, and the period that a developer will typically have the greatest negative cash-flow, we continue to carefully manage the project during this stage.

The construction stage can have the greatest potential effect on the final construction cost and the timing of the project. As even short delays or relatively small changes in the cost of the construction can have a detrimental effect on the profitability of the project we recognise this stage as a time of potentially significant risk to the development project.

The risks, during the construction stage, that we are particularly conscious of include:

* the contractor is unable to complete the project

* the completion of the construction is delayed

* the costs of the construction increases significantly

* unacceptable standard of building work

Home Interior Designer Requirements – 10 Questions to Ask Yourself Before Hiring a Professional

To help eliminate the frustrations of deciding whether to tackle a home improvement project by yourself, or hire a professional home interior designer, I’ve created a list of questions to ask yourself that will assist you with making a decision.

Improving your home by redesigning the look and feel of several rooms all at once takes forethought and planning to achieve the desired results that you have in your mind. Although you might have a creative flair for using color in your home, and your friends and family have told you that your decorating and design talents are exceptional, how do you really know if you want to take on the project by yourself?

Here are ten questions to assist you in the process. After you have finished jotting down your answers, you just might have made your decision (especially if you answered no to more than one-third of the questions).

1. When looking at your calendar, do you have large blocks of time available every week for your interior design project tasks?

2. Is it easy and natural for you to place a paint sample next to a fabric swatch and imagine how the colors and materials will look in the room you want to decorate?

3. When you think about re-doing three rooms in your home, do the required tasks feel overwhelming to you considering that you’ll have to do everything by yourself?

4. Have you already purchased paint and accessories for one of the rooms, but now you’re not sure about the colors you’ve chosen?

5. Did you find inspiration for redesigning one or more of the rooms in your home from a picture in a magazine, but now you’re not sure if you like the style, whether retro, eco-friendly, minimalist, traditional or contemporary?

6. Are you the sole person making all the color and design decisions, or do you live with someone who totally disagrees with the changes you’re about to make?

7. Do your plans include more than decorating with paints and fabrics?

8. To achieve your desired goals for improving your home, will it be necessary to knock down walls, and relocate water sources and electrical components?

9. Do you have money available now because you were thinking of buying a new home, but have recently decided to stay in your current home rather than moving to another home and starting all over?

10. Do you live in an historic part of town and you’d like to have the inside of your home reflect the area where you live, but you don’t have a clue where to start?

Planned Real Estate Development in PCMC – Healing Pune’s Urban Sprawl

What is it about Pimpri Chinchwad and its township properties that is so different from what is happening in the rest of the Pune property market? To understand this, one has to first understand what goes into the formation of a planned city.

The breath-taking residential areas that now dot the Pimpri Chinchwad Municipal Corporation map are not an accident – they are the result of carefully planned social, economic and real estate growth.

Unlike the central areas of Pune, the real estate market in PCMC has been scrupulously shielded from the central city’s ad hoc development style. The vigilance and futuristic thinking that went into this avant-garde satellite city have added a completely new dimension to the concept of residential properties in Pune.

From the very outset, the PCMC planning authorities were determined to avoid the mistakes committed in nearby Navi Mumbai, popularly known as the world’s largest planned township. After all, what began as regulated development in Navi Mumbai soon began giving way to commercialised expansion.

Instead, PCMC adopted a blueprint for smart growth – a blueprint that placed utmost importance to organized urban planning. No scope was given to a nearsighted focus on capitalization on this new area’s development potential – the onus was firmly kept on long-term considerations.

This was to be the city of the future – a place where residents could work, live and relax without any of the constraints that plague the rest of Pune. Slowly, almost imperceptibly, the landscape of this previously ignored satellite city changed. Proposals for faster development were turned down. The master plan stayed in place, and the results are now brilliantly evident.

Today, Pimpri Chinchwad Municipal Corporation is an acknowledged masterpiece of community-oriented real estate development. It has a unique blend of sustainable residential spaces, highly advanced transportation networks, a broad spectrum of employment opportunities, modern housing typologies such as township properties and superior supportive infrastructure. At every stage of planning, this city’s inherent natural, cultural, sociological and economic resources have been carefully preserved.

This incredible growth area is now the most logical option for residential property in Pune today. For home buyers, PCMC is the prefect alternative to Pune’s unregulated urban sprawl, rapidly compounding traffic congestion and disconnected neighbourhoods.

Considering the increasing evidence if rapid urban decay in central Pune, township properties such as those now coming up in Pimpri Chinchwad Municipal Corporation are the truly the New Residential Deal.

However, PCMC is not only about wider, greener spaces, cheaper property rates, improved social fabric and better infrastructure. The establishment of such new growth areas, with modern residential alternatives such as township properties, is a blessing to the Pune real estate market (which has been stagnating within increasingly larger pockets).

At first sight, they only seem to play a role in reducing the urban sprawl and offering home buyers a healthier and more comfortable lifestyle. However, they are also instrumental in creating new urban centres, wherein new business districts create job growth in new directions.

Thanks to the organized nature of their development, they create new and more rational scope for real estate market expansion while reducing pressure on property prices in the parent city.

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