Importance Of Contingencies

A building contingency is so important when it comes to designing and building. It is an amount of money allocated in the budget that is set aside to cover any unexpected costs that may pop up during construction. This can either be a fixed amount set by the designer or builder or a percentage of the total building budget. Unexpected costs pop up all the time in every project and need to be accounted for somehow. It is there to help the builder, designer and client during the construction stage. 

The types of costs the contingency can cover are things like:

• asbestos removal- not knowing the extent of asbestos when starting a project. There needs to be an allowance for the removal by professionals.

•  If you are excavating for a basement, pool or slab and hit unexpected rock. This is generally not covered in the demolition or excavation of a building.

• Material increases- this is very relevant now. Due to the pandemic there is a world wide price increase on timber. If you received a tender estimate 10 months ago the supply price would have been a lot less than it is now. That is for everything from structural timber to timber cladding and timber flooring etc.

• Unforeseen increases in structure. When renovating or building there are things that change along the way, there could be an increase in structure because of a design change or when renovating there were unforeseen circumstances in the existing home.

I can’t stress enough how important it is to have and maintain a construction contingency throughout the entire design process and not cut it from your budget. There is always something that pops up that no one could have predicted. The construction process is so exciting it’s finally time to see your home come to life, a few unforeseen costs shouldn’t stop you from enjoying this time and the contingency is there to make sure these don’t get in your way.