When a Project Goes Wrong Doing Damage Control

Living in a community sometimes requires a bit of flexibility, and that’s especially true when a large construction project is happening. Usually, whether it’s a facade restoration, lobby redesign, or a heating/ventilation upgrade, most building construction projects go pretty smoothly. However, problems with noise, dust, or disruptions in building services are commonplace and to be expected with some construction projects. And if residents have been informed of the possible inconveniences ahead of time, a nasty resident backlash usually can be avoided.

But sometimes, things just go badly with a project. Projects stretch out for months longer than anticipated, contractor crews damage property, elevators are shut down or other problems emerge, and people get tense. When a project starts causing more problems than it’s fixing, usually the building’s manager does the damage control and gets things back on track. But it’s the responsibility of the manager and the board to deal with the aftermath of a difficult or disastrous project.

Common Project Headaches

Perhaps the most common problem that a board will run into with a major renovation project is cost overruns—when the contractor exceeds the budget and asks the board for more money. Such overruns can be foreseen or unforeseen, says Stephen Elbaz, president of Esquire Management Corp., a Brooklyn-based property management company. “A plumbing job might end up taking more time and money because of rotted pipes. Sometimes, [the board] runs out of money for the project in the middle of the project,” Elbaz says.

A less common problem that can happen with a large project is the contractor’s surprise—when a chunk of undiscovered work is uncovered while working on the project. Sometimes what the contractor uncovers can be hazardous, and therefore, costly to fix. Asbestos and lead, which always require abatement, are two of the worst surprises. They are a couple of the nastiest problems a contractor can encounter on a project, Elbaz says.

“A contractor might discover midway through the job that there’s a room they didn’t know about,” Elbaz says. “Sometimes, especially with mold, [that new factor] can drive the cost of the project up. A bid that was $20,000 two months prior will increase by $5,000 because of the growth of mold [in the project area] during that time.”

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Comments

  • what happens if a contractor on a big job (like a facade) goes bankrupt or walks off the job and the work is bonded? does it mean that the condo board can access the bond to find another contractor to finish the job? suppose the new contractor will not finish the job for the amount of the bond? How can a condo association protect itself in such a situation? Can a condo take out insurance against this risk?