Paul Morton, founder and CEO of Lannock Strata Finance, recently contributed to the May 2019 issue of Resort News Magazine on ‘How a Project Manager Can Save you Money‘.
You can view the full article at Resort News or read the article text below.
Completing the construction of a property is not the end of that building’s journey but only the beginning. Buildings have a defined life span and with the necessity for maintenance and the plethora of opportunities for enhancements, a building should constantly be fine-tuned.
Everybody understands the benefits of maintenance and refurbishment. This is part of the normal process for commercially managed buildings but in strata properties the requirement to “repair and maintain” is enshrined in legislation – there are very strong obligations on owners to repair and maintain common property.
The combined skills of the strata committee and the strata manager can usually handle many routine cases. But what should owners and managers do when their strata corporation is facing significant or complex building works?
There are many technical matters: How do you deal with the requirements of Council, for example in preparing a Building Code compliance report? Who has the experience to choose between different engineering or architectural solutions? Who should prepare the tender documents? Who has the ability to properly evaluate the works proposals? How do you know that the contractor will be able to complete the job? Building codes, contract and construction law and handling complex building projects are a mystery to most of us.
And of course, there are the emotional matters: Who on the Committee has the skills, time and energy to do this properly? And who do you blame and what do you do if it all goes pear-shaped?
Enter the project manager.
In Lannock’s experience in lending to owners corporations, large projects run more smoothly and cost-effectively when the corporation has engaged an expert third party to handle these things.
An experienced project manager can make the difference between success and disaster. And they certainly make things easier for owners.
The right project manager will help ensure the right solution for each individual building and then work to deliver a quality outcome that is finished on time and within budget. More often than not, the project manager’s fees are outweighed by the savings they bring.
One project manager we know tells the story of a refurbishment project on a high-rise strata building on Sydney’s lower north shore: “The owners corporation wanted to save costs and thought they could manage the work on their own. They contracted directly with a builder who removed many of the windows and then walked off the job. For 12 months the owners have had hoardings covering their water views as well as water damage and a large scaffold rental bill. The cost to restart the project will be more than the entire budget of the original project. The contracts and insurances were inadequate and the supervision was negligible. Everyone will suffer financially and no-one is happy.”
Complex jobs will take a toll on owners and tenants. There may be daily disruption, noise and inconvenience so it’s critical to maintain good communication. In the instance of building defects, it can require input from a team of experts as well as good management of the tender process and the works must be coordinated, approved and eventually certified. A project manager can pull all this together. Project managers are contracted to deal with complex information, make effective decisions and ensure all stakeholders are properly informed.
Project managers also bring an important layer of insurance (and assurance). As members of an Strata Committee, you don’t want to be accosted by owners who are upset at the status of the works – engaging a project manager means you can demand performance from a professional third party.
Lannock is not only able to immediately finance your strata buildings works, but will also provide the funding to cover any associated project management fees. Owners don’t need to wait around for their capital works fund to accumulate, can enjoy the benefits and investment returns of completing project work sooner, pay today’s costs and avoid the problem getting worse.
Strata finance also gives owners the flexibility to only draw down what is needed when it is needed which is well suited to complex projects that have the potential to chop and change.
How do you find a good project manager? There are two professional bodies dedicated to advancing project management skills (aipm.com.au and consultaustralia.com.au) so check if your preferred party is a member. But you can start by asking around for references and then very critically examine their proposals to you.
If your next project looks like it might challenge your professional capabilities or emotional comfort zone, we urge you to consider an experienced project manager. Maybe your project doesn’t warrant their expertise but there is a very good chance they will save you a lot of money and heartache in the long run.