Understanding General Conditions in Custom Home Construction
General Conditions, also known as construction soft costs, are critical expenses homeowners incur during the construction of their custom homes. These costs, paid to the General Contractor, cover the essential administration and management of your project. Despite their importance, General Conditions can be perplexing due to their intangible nature, covering aspects like on-site employee salaries, job site trailers, and site fencing, among others. This article delves deeper into these costs and their impact on your project's budget.
Decoding General Conditions in Your Construction Contract
When reviewing your construction contract, General Conditions are typically listed under a specific section, often as part of the total construction cost. If your contractor adheres to the widely-used CSI Master Format, you'll find these costs under the "Division 01" category. It's worth noting that General Conditions, combined with overhead and profit, can account for 20-30% of your total budget. Early awareness of these costs allows for more accurate budget planning and project design.
Significant Elements of General Conditions
A substantial portion of General Conditions is attributed to the salaries of the General Contractor's team, which may include roles such as project manager, site superintendent, and project engineer. These costs are passed on to the homeowner, including a markup, emphasizing the importance of understanding these fees.
Exploring Off-Site and On-Site General Conditions
Off-site General Conditions encompass project accounting services, including monthly invoicing and cost tracking, which are critical for transparent financial management. On-site costs cover temporary utilities, office trailers, erosion control, dumpsters, site fencing, and finish protection, among others. These expenses ensure the smooth operation and maintenance of the construction site, highlighting the necessity of including them in your project's budget.
Insurance and Bonding: Essential Considerations
Insurance policies, such as builder's risk and general liability, alongside any required bonding, represent crucial components of General Conditions. These safeguards protect your project from unforeseen circumstances, underscoring the importance of verifying the contractor's insurance coverage before finalizing any agreements.
Navigating General Conditions for Cost Efficiency
Given the variability and significance of General Conditions, it's advisable to thoroughly review each item listed under this category before committing to a contract. Collaborating with an architect experienced in managing General Conditions costs can provide invaluable insights, helping you maintain control over your budget.
In conclusion, understanding General Conditions is fundamental for anyone embarking on the journey of building a custom home. By grasping these concepts, you can ensure a more informed and cost-effective construction process, ultimately leading to the successful realization of your dream home.
