Remodeling as a client-contractor collaboration

Wiring a GFI outlet. "I like to be in the huddle," said a client who was involved in all stages.
Wiring a GFI outlet. "I like to be in the huddle," said a client who was involved in all stages.
Posted: January 26, 2014

Economic realities over the last seven years have changed how much work buyers - often two-income couples with little free time - are willing to do on their new home.

"Most have very little vision as to how a house would look with different decor, and often view simple cosmetic issues as much bigger than they are," said Marilou Buffum of Berkshire Hathaway Home Services Fox & Roach in Chestnut Hill.

Yet at least one remodeling contractor says clients undertaking projects are getting more involved, though in a different way.

In the last year or so, says David Posternack, owner of Match Remodeling in Swarthmore, more of his clients with $20,000-plus projects are choosing to work with him on a "construction-management" basis, rather than with the traditional method of 30 percent to 50 percent up front and payments scheduled as the project progresses.

Here's how it works: Posternack involves the client in every procedural decision, including sharing price quotes from subcontractors.

Every week, he sends the client a spreadsheet listing expenses, anticipated costs and budget, and overall project status.

His 20 percent overhead/profit is automatically added under a separate heading. The client then gives him a weekly check as reimbursement and, if necessary, to cover additional costs.

Posternack acts as general contractor for licenses, insurance, permits, and warranties.

The arrangement has worked well, said Brendan Tierney, who has been using Posternack as a contractor since he and his wife bought their Center City house in 2009.

"I like to be in the huddle," said Tierney, managing director for infrastructure at Janney Montgomery Scott in Philadelphia. "I have a different way of looking at things."

He and Posternack discussed the alternatives, Tierney said, and the construction-management option seemed best for their latest project - a basement remodeling.

The renovation involved digging down two feet, Tierney said, "and even if we went the traditional [contracting] route and settled on a final number, we'd still be on the hook" for unanticipated problems.

The scope of the work, therefore, was uncertain, and the costs potentially variable, Tierney said, but "everything worked out quite well." The arrangement allowed "flexibility in decision-making."

"We knew how much money we had to spend, and where we wanted to splurge and not," he said.

Though they developed a good working relationship with Posternack, Tierney said, "a few of the solutions [the contractor] came up with weren't acceptable, and having input into the process" made compromise easier.

Posternack said he, too, likes the construction-management process.

"I enjoy working closely with my clients and learning from their knowledge and opinions. It streamlines the process, and, especially on larger projects that don't involve an architect, it negates the necessity of change orders and the stress fraught in them," he said.

Other remodelers don't see it quite that way.

"Most of our members do not work that way," said Nikki Golden of the National Association of the Remodeling Industry.

"[It] is not a sustainable business model," said Jay Cipriani of Cipriani Builders in Woodbury. "You can't stay in business with a 20 percent overhead and profit. I'm the pro, and now I'm allowing them to make decisions based on budget how I'm going to build the project or manage it."

Diane Menke of Myers Constructs Inc. in Philadelphia said she saw no reason for it.

"Clients may ask, but it doesn't mean a professional should change their business model. No other professional in business would do so," Menke said.

"Remodeling, in particular, and contracting, in general, are very complicated businesses, with hundreds if not thousands of moving parts," she said. "Clients who are willing to hire professional contractors know this and leave it to them."

215-854-2472 @alheavens

comments powered by Disqus