Payment strategy to builders by Josh Brincko

We have all heard horror stories about the builder who takes a deposit and never does the work and never shows up again. This is usually preventable. 

It starts with vetting. It may seem obvious, but research your builder. Not a little. Research A LOT. Really try to unearth who this person and company is. Start with checking basic licensing with the Secretary of State to ensure they are licensed and bonded. You can search by name and company. Next check the department of labor and industries. This is where they list any previous safety infractions that were violated. Next dig deeper and look into the personal assets of the builder to see if there are any judgements or liens against them. This can be done by researching public records at the county recorder’s office. This is usually all online. All these things will disclose the accountability of the builder. Sure, do the obvious and check the website for examples of previous work and ask for referrals. Here you are sure to see prefiltered examples of the builder’s best work they have ever done. This is the best you can expect to get for your project. Lastly, do a bit of social network research on this person. Before hiring them on the biggest expense you will ever have, it makes sense to know everything you can.

Now you are equipped to interview your builder before deciding to hire them. This gives you and the builder a chance to discuss the information you found, and this is for you to decide if they pass your smell test. You will be working together on the biggest investment you’ll ever make for over a year likely. Make sure you LIKE this person. 

Next it’s time to lay the ground rules for how you will be working together. This gets complicated because most homeowners have never had to negotiate with a builder before, and the builder surely has some established protocols they use and prefer (because it benefits them). There is a lot about the construction process that most people are just not familiar with, so relying on your architect (and maybe an attorney) is crucial in reviewing the contractor’s contract and also laying out the ground rules on HOW you require them to bid your project. You do not want to be in a situation where your project is almost done except for a few unfinished (or improperly finished) areas and the builder is requiring you to pay for them - or even worse: you already paid for them. There are some typical checks and balances that you need to be aware of that your architect can help setup at the start of the project. 

Similar to dining out at a restaurant, you don’t pay for your meal (and service) first. No, first you get the service, THEN you DECIDE how much it was worth. This is somewhat similar to construction. There is a menu of items that need purchased and assembled, and there is a price tag for each. This menu is your bid and construction contract. The more detailed the bid, the more you will understand what you are ordering and should be getting. For example, there should be a line item for drywalling. The builder should not bill you for that until you have received it. This means the materials need to be ordered, delivered, and on site (stored properly according to manufacturer instructions). And it needs to be properly installed according to manufacturer’s instructions AND contract drawings prepared by the architect. If it is not done accordingly, you should not be entitled to pay for all of it. Similar to a restaurant, you have the opportunity to accept your meal to ensure it is what you ordered before you eat it and pay for it. In construction it is similar, but to keep things fair for the builder, they should be able to bill you in increments - usually monthly - for the items completed based on a percentage of completion. Again, this is where your architect comes in handy. The architect is a third party who is very versed in what is supposed to be built, how it is supposed to be successfully constructed, and has a thorough understanding of the contract language on typical construction documents.

Your builder should submit an “application for payment” to the architect every month for review. On this payment application, they should list out the items that appeared on their bid that you expected to pay. On each line item, they should list a good faith percentage of completion. Your architect should have a walkthrough with you and the builder to review the work to ensure those percentages reflect the actual work completed, so your builder can be paid for their successful efforts. Any work that is not completed according to the contract drawings should not be paid for until it is completed properly. Your architect will request you withhold certain portions of any payments that still require more work, and the architect will explain this to the builder. This often involves faulty workmanship, so a creative strategy will be needed to get things back on track. The architect is the best party to oversee this since the homeowner is typically not aware of faulty workmanship, and the builder has a financial incentive to build things cheap and fast to get their payment faster. This results in corners being cut that you hear about so often. Having a portion of the payment withheld will provide incentive for you and your architect to motivate the builder to complete any loose ends and to discuss a strategy to do it.

Establishing this protocol early in the build (like before it starts), is important to create a transparent working relationship and to clearly communicate that you expect to pay for the work that is completed according to your plans - and nothing more. 

Most of the builders out there are good, but the few bad ones make a bad name for everyone unfortunately. The good builders own up to their own mistakes usually, and they correct them without being asked. Developing a good working relationship with your builder is key to ensure mutual respect in how you work together and pay one another when there are gray areas.  

Some builders will require payment for portions of work up front. This is called a retainer. This is perfectly normal and acceptable IF executed properly. This retainer effectively guarantees that the homeowner will not stiff the builder. The builder will withdraw money from that retainer as the work is successfully completed or just hold it until the end of the project to protect themselves if a client decides not to pay an invoice. Before you pay a retainer for work not yet completed, be sure you trust your builder, be sure the terms of payment and refund of the retainer are 100% clear, and be sure the retainer amount is not exceedingly large. It really only needs to cover the operating expense of the builder, so they can pay their overhead and crew and purchase the needed materials while waiting for the next progress payment. Anything more than that is questionable.

Below are photos of a project where the builder did not complete the work according to the drawings or ordinary construction protocols. These items were found during construction, and the builder was held accountable for fixing them. Again, these are photos of new construction that a builder called “complete,” and the builder tried to make the client pay for this shoddy work  

 

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scuffed metal column wrap and gap in siding 

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new deck and new column, but nowhere near being straight

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unfinished drywall work

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Poor quality cabinetry

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poor quality cabinetry

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major gaps in construction

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door not installed with a plumb frame

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door not installed with a plumb frame (see the uneven door hardware)

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door not installed with a plumb frame

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huge gap under door

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Scratched metal detail and cut too short. No caulking

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poorly fitted metal detail

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Missing metal flashing due to poor construction sequencing

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broken siding and rough cutting

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More broken siding

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no caulking on outdoor electrical fixture

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vent not attached (my 2-year old pointed at this and said “uh oh”)

 

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No grout or baseboard

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poorly fitting panels, poor caulking, and rough cuts

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Only part of the door trim painted on right side

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Poorly fitted gasket/weatherstripping  

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missing siding 

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Huge gap in siding

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Rough cut siding and poorly fitted (this is what you see while walking to main entry) 

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that’s not pretty (again, this is a new house!)

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custom blackened steel hardware, but installed off center

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completely unsafe stair stringer attachment (the builder just threw in the towel on this one). Each is hanging by a nail. 

Two Design Schedule Paths by Josh Brincko

There’s two approaches Josh Architects uses sets up the schedule to complete design services: 1. The fast way or 2. The cost effective way.


In the fast method, the client has a stronger desire to move forward quickly than a desire to save on the cost of design and construction fees. In the cost effective method, the client has a stronger desire to save on the costs of designing and building which causes the process to take a bit longer. Let’s examine the benefits of both methods.


Both methods start out the same. The client gives the architect design goals, and we use this criteria to design the basic concept. We review that concept with the client to get feedback to modify and enhance the drawings as needed. This is where things branch off in one direction or the other.


In the fast method, we continue to add more and more detail to the drawings, so we may quickly move into the permit process. While we are waiting for permit approval from the building department, we continue to develop the plans with more detail (not knowing if the building department will approve the project exactly as designed). This includes designing the trim work, cabinetry, specifying finishes, grout color, grout sealer, etc. The goal is to have all the decisions finalized by the time the building department issues their approval to begin construction. This includes the cost to coordinate with an engineer to calculate the structural requirements and also soliciting bids from builders to have a construction contract in place, so the project is “shovel-ready” by the time the permit is approved. In working within this method, we move quickly and have less opportunity to modify the plans to keep construction cost in check. There is limited feedback from builders in this shorter timeline, so the final construction cost remains an unknown until the permit is pretty much approved. The danger with this method is that the permit may be approved, but the builder prices the project over the client’s budget. This means additional expenses will be incurred by the client to redesign the project if it is over the budget. Also, the permit may need to be revised to reflect the change in the scope of work which also has an additional cost. If the budget is not all that important, this faster method is the way to go.


In the more cost-effective method, the architects take baby steps. We design the bare minimum, then we get rough estimates from builders. This is called an ROM estimate (Rough Order of Magnitude). Since the drawings are very basic (without any detail or specifications), the builders make a lot of assumptions for all the ambiguities in the plans. This results in an estimate that can vary quite a bit, but it gives the client and design team an idea if the construction cost will be in the right ballpark. If it’s not in the right ballpark, not much time was wasted in getting to that point since the drawings were only minimally developed. These incomplete plans can next be further updated to include feedback from the builder to keep the project close to the expected budget. These iterations can go back and forth several cycles to continue to get pricing feedback without developing the plans too far down a wrong path. Once the plans are within the right ballpark for construction cost, they are developed further to include structural engineering (which is another cost), so they may be submitted to the building department for permit review. While the building department reviews the plans, we wait in this slower method until the they approve the plans and possibly stipulate any additional items that may need to be included during construction (like fire sprinklers). In the event the building department requires some additional items that would cause the construction cost to go over the budget, the client can pull out at any time. The plans have not yet been fully developed at this time to include the specifications and additional design details, so there is minimal time wasted on the design fees by this point in the process. If the permitted plans do not require any additional construction cost and the project is still within budget, the client can elect to continue to proceed with the design process to include the detailed design work, specifications of materials, selection of windows, etc.


Each client has different goals, and we are happy to work in each method. Design is a bit of a chicken-and-egg process since a builder can really only provide an estimate on the things that have already been designed. So we have to take a leap at some point and design something for a builder to bid on. We have to guess at what will be likely to fit within the budget. We can take a giant leap and do all the designing at once to speed things up, or we can take many baby steps by designing a little at a time to get more frequent feedback from builders to inform the further development of the drawings. It all depends on the client’s desire to save time or save money.

Jobsite Sketches by S. Joshua Brincko

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The most valuable work I do for my projects is on a jobsite with a pencil. There’s a lot of work that happens before construction begins, but the jobsite is where the most important work for the architect happens. As the builder interprets the original drawings, my guidance on site keeps the construction according to plan. Without my guidance, construction deviates from the plan 100% of the time. Since there’s an inherent disconnect between a drawing and the choreography of what a builder is supposed to build, the drawings could never be fully articulated to the builder. It requires careful, methodical explanation every step of the way to ensure the build matches the plan. Some call it “hand-holding,” but I call it “collaboration.” I give the builder more credit than most since I understand the plans are just a starting point that require practical explanation during construction. This service is called construction administration (CA) which is defined really well in the American Institute of Architects contract B201 section 2.6 http://aiad8.prod.acquia-sites.com/sites/default/files/2017-10/B201_2017.sample.pdf. Some “CA” results in revised CAD drawings, and some results in sketches on plywood on the jobsite.

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Does anyone think an actor reads a script for the first time when they perform? No! The actor studies it relentlessly and asks questions. The script is a very loose narrative that gets explained to the actor by the writer over coffee, it gets practiced and modified over rehearsals, and it gets fine-tuned once everyone understands the performer’s talents, nuances, and shortcomings. It is simply not possible to write the script to include all this interpretation on the first draft. It must be performed and modified.

This is exactly what happens during construction. The builder reads the “script” and starts building. As the different trades begin to integrate their scopes of work, it is absolutely essential that the architect is available to interject with guidance on how to interpret the original drawings to make best use of the resources and talents of the builders as the building begins to take shape (and before it takes the wrong shape). This is analogous to a director during a rehearsal telling the actor to say the words from the script louder, with more emphasis, while stomping a foot on the floor - all while the technicians setup the lighting and microphones to adapt the best way of recording these actions.

Please understand this: THERE IS A LOT OF EXPLAINING THAT MUST HAPPEN DURING CONSTRUCTION.

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I’ll be frank here. It pisses me of when builders or clients believe they should be able to just use the drawings (produced for the sole intent of getting a permit) to actually build a building without the architect’s involvement. This is completely absurd. It pisses me off because I’m witnessing a client wasting every dollar they have paid me, and I have wasted every minute of my time in working on a client’s behalf. Without the architect’s frequent oversight during construction, the project suffers at the expense of the client 100% of the time. Every single thing that gets built without architect oversight, gets built wrong. This is a heavy statement, but it is true. It is a fact from 18 years of experience. If it’s not 100% correct, it’s wrong. And a simple interjection on-site from an architect like “that plywood needs to overlap this part because...” quite easily fixes everything, and it can become 100% correct. Or a builder may consider it "right" because that's the way he or she wanted to build it, BUT that may not have been the way it was planned, drawn, and approved.

Much of this explaining happens on a jobsite while I explain the concept to the builders and sketch the idea on the floor, or the wall, or whatever surface they are trying to build. These sketches bring it all together using language a particular craftsman understands, and builds upon his or her particular talents. These sketches explain how to get out of the current situation and move onto the next one while getting the intended result without spending any more time or money. In fact, these sketches often will save time and money when done at the right time (which proves frequent involvement from the architect is valuable). 

Here’s a collection of some of my sketches that are priceless in conveying a concept to a builder. They initiate that “light bulb moment” where the builder finally “gets it,” so they can spend the next 100 hours building something the way it was planned in the drawings - not the way they think it’s supposed to be, or the way they did it last time, or the way that makes them the highest profit.

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Rogue builders by Josh Brincko

During construction  clients commonly ask me, “Why would I need the help of an architect during construction? Can’t the builder just build from your plans?” 

This does not work, and the following photographs prove it.  These photographs show what can happen when a builder refuses to involve an architect during the construction process. This builder believed he did not need the oversight and guidance that the architect provides. Had the architect been invited to review the work regularly during construction, these problems would have been avoided. There are also additional problems not depicted in these photos of inadequate structural framing issues that are causing the house to move. This builder believes his work is high-end, high quality construction. This is not true, and consequently he is currently involved in a lawsuit to repair the work to be compliant with the requirements of the approved contract drawings. I believe these photographs speak for themselves. (Remember, this is a NEW house.)

As you can see from these photos, it makes sense to have frequent oversight during construction. Commonly, clients attempt to save on design fees by not involving the architect during construction because they believe it is an extraneous expense. With oversight during construction, we can prevent these problems and spot them before they become bigger ones. We also come up with friendly solutions (compromises) that work for everyone's agenda. In some situations, rework is necessary, and credits back to the client are required. A solid team between a builder, architect, and client is essential to keep the communication open, so effective and efficient decisions may be made in real-time. Fixes after the fact are messy, expensive, and difficult. The builder who built the items shown here is now involved in litigation and is being held responsible for the items that he built below the standard of care that is ordinary for the industry and for items that are not built according to the drawings. This builder was negligent in seeking guidance and approvals during construction to enable a good outcome. Thorough vetting of builders is also important. In busy construction climates, lower quality builders seem to emerge since the good ones are busy, and the cost of everything is going up. Taking a step back and evaluating all possible avenues is certainly worthwhile. In this situation, the client will end up being compensated for the builder's negligence, but nothing will ever compensate for the stress and added time that this causes.

SMALL Projects with BIG expectations by Josh Brincko

As an architect, I get requests all the time from friends, family, previous clients, etc to help them out with their little remodel, addition, or feasibility to see if they should pursue a possible project. Since I love designing things and seeing them get built, I'm always happy to help where I can. I've done some really cool small projects in the past, and it's also enlightening to see projects that can be built quickly instead of a couple year turnaround. 

Although small projects are small, they are not necessarily small from a business perspective. To get to a point where the designing can actually begin, it is necessary to go through the same few steps on most all projects - regardless of the size of them. Measuring the existing building and drawing it takes the same amount of time (and expense) for a small addition as it would for a large one. It is important (and required by the building dept) to document the existing parts of a building instead of only drawing the proposed work to it. We do this work of documenting very strategically. We do not measure each and every little thing when we first start a project. This would not be prudent. At the beginning of a project, nobody really knows what the design solution will be, so it is not time well spent to measure everything in a building with 100% accuracy. In addition to taking photos and carefully filing them, we generally go around and measure the length of every door, window, and wall as quickly as possible within about an inch of accuracy. This does not account for existing walls that are not built straight, existing construction that deviates from standard practice assumptions, and any extreme level of detail which we know we will focus on anyway much later in the process IF the client decides to actually do the project. Many projects never move forward for a myriad of reasons, so it makes a ton of sense to only get a rough idea of the existing conditions and not spend too much time drawing them until everyone is certain the project will move forward. The main point here is this phase of the work to measure and draw the existing building takes the same amount of time for all projects - whether its a big project or small one, so the economy of scale gets out of whack when you proportion that time over the actual design time of a small project.

Another area where small projects share the same (large) expense as large projects is with surveys and geotechnical reports if required. In many projects, even small ones, the building department will require a survey to be completed by a licensed surveyor to document the location of the property lines, the location of the building in proximity to those property lines, and even the trees and slope of the ground. The cost of a survey or geotechnical report is the same for a small project and a large one. Consequently, this is another expense that causes the overall design fees of a small project to be out of proportion with a larger one. Even if you’re building a shed, the building department still needs to know how close to the property line it is and what percentage of the property will be covered including the shed, house, and any other items.

The process of applying for a permit is another expense that is the same for a small project and a large one. We need to fill out all the same forms, do all the same calculations, and monitor the progress of the building department's processes whether it’s a big project or small one. Again, the economy of scale is lost here when doing small projects. For some small projects, there are some abbreviated processes the building department puts into place, but this really only saves wait time and not necessarily the production time of participating in the process.

Bidding is another phase that takes architects the same amount of time on large and small projects. Once we complete our plans, we send them out to builders to get bids with specific instructions on how to provide the bid for the project. The coordination here takes the same time investment on all projects. On larger projects, a builder may have more questions, but this is somewhat negligible. Most of the questions relate to the existing building and not necessarily the proposed new parts of the project. Again, the economy of scale is lost here on small projects. It is faster, however, for a builder to provide a bid on a smaller project. The coordination time for the architect doesn’t change though.

Construction administration is the final phase that shares many of the same expenses between small projects and large projects. Sure, there are more items to review on large projects, but the time spent getting to/from a meeting, setting up a meeting, filing the notes/photos, etc are all the same time invested whether the project is large or small. (The state of Washington standard acknowledges time spent traveling 50 miles to a project site is considered a legitimate billable expense, and there is even a standard in place for longer travel.)

In conclusion, the time spent designing is really what architects get hired to do, but there's a lot of effort and due diligence required to get to that point. On a small project, there's a small amount of designing relative to the amount of other required tasks to be completed. On a large project, these other tasks get shadowed by a much more robust amount of actual design time.

When comparing the cost of design fees to the cost of construction, these facts result in a much higher percentage of design fees for a small project when compared to a large one. It is also widely accepted that renovation projects are more complicated than new construction projects and therefor have a higher fee. The state of Washington standard acknowledges that design fees for remodels carry an additional 3% of the overall cost of construction. Additionally, it is recognized that residential design work is the most complicated project type. Yes, designing homes is more complicated than schools, hospital, stadiums, and museums. Residential architecture is the brain surgery of the industry. There is simply much more detail that needs to go into a residence than is necessary in other more open and repetitive types of buildings. This website summarizes architectural fees and complexity of project types from recognized government agencies and trade organizations: http://architecturalfees.com/project-complexity/ . You will see that it is common for custom residential remodel design fees to be around 20% of the total construction cost for smaller projects, and the percentage goes down proportionally as the cost of construction gets higher.

Over the past 18 years in the architecture field, I have had 4 clients get upset with my service. They all had one thing in common: they were small projects, so they did not want to engage in the full scope of architectural services to save money (despite my warnings). When the full scope of architectural services cannot be completed, an architect cannot protect the clients' interests. Although design fees may seem high relative to the construction cost of a small project, the intention of design services is to ensure construction goes according to plan. Mess-ups in construction are much more costly than the cost of preventing them with thorough design services. Design fees are well worth the investment. Here are some additional resources that substantiate these figures:

State of Washington Guide

Washington Post

Architectural Fees Website

Royal Architectural Institute of Canada (Published by American Institute of Architects - see page 11 TIER 7, and page 30 which defines custom residential as being in the most complex tier.)

Curbed.com  

Home Advisor (scroll down to "How Much Do Architects Charge as a Percentage of a Project?")

Design Is (Educated) Trial and Error by Josh Brincko

Automobile designers come up with an idea, build it, test it, redesign it, build It again, and repeat until it's as perfect as possible. It is really a form of trial and error. Architects don't get that opportunity. We design it, and it gets built only once. We only get one chance to make it right.

Doing something abstract or cutting edge comes with risk. If we do something that hasn't been done before, we don't really know if it's going to work. We think it will. We have reasons to do it. We analyze the idea as much as possible. But, at some point, we just have to take the plunge and build new ideas and adapt as we go. This requires commitment from the architect, builder, and client to attempt innovative ideas. The client must trust their team will perform successfully based on their previous track record of ingenuity. 

This is why I find architecture so interesting. I get the opportunity to design enourmous, custom, functional sculptures for people to live in, and I get to explain how to build them to great builders. I do this all while knowing the things we are doing have not exactly been done before. We are working together to figure it out with the information and conditions available to us at that moment. It's rewarding to be part of great teams that take great pride in their work. When working with builders who are less confident, less passionate, or some combination of the two, they tend to want to build it the way they did it last time. This works when you WANT it to be exactly the way it was last time, BUT living in inspiring spaces requires innovation, so there’s some variation in our surroundings. This variation actually responds to the surroundings when the architect is truly in tune with the limitations and opportunities within any given place. We innovate to come up with the best solution for the specific scenario. No two projects are ever the same. I can confidently say this after designing hundreds of buildings. 

This innovation ranges from designing an innovative space, to pushing the boundaries to how much glass and little structure you can have, to figuring out how to insulate a wall to the maximum extent possible, and even things like figuring out how to waterproof intricate and difficult intersections between different materials.  

These challenges are very fun to envision, and they are even more rewarding to see them get built and utilized to the extent it was intended. It's so rewarding because we work so hard and only get one chance.