It is generally accepted that putting a definitive cost estimate or price on remediation work before the full extent of the damage is known is almost impossible. It will not be until the framing is exposed that the full extent of the damage can be determined, and only then can a reasonably definitive assessment of costs be made.
However, costings by a quantity surveyor experienced in this work or a remediation specialist will be more accurate where the information-gathering and the consent documentation have been well prepared.
Close monitoring of costs through construction is recommended to allow the expected final cost to be regularly updated.
Direct remediation costs will form a significant part of the repair costs, but a number of other costs will need to be allowed for.
Direct construction costs
Assessment of the direct construction costs involved in remediation work – before the building is opened up – should take into account:
- the fact that remediation work tends to be labour intensive
- uncertainty of what will actually be found
- potential variations in the extent of work required between adjacent (ostensibly similar) dwellings or dwelling units
- constricted sites and access
- requirements for on-going testing of materials (for example, testing of timber for decay)
- the cost of scaffolding, temporary weather protection and temporary structural support within the building
- the need to remove and repair or replace windows and doors
- the need to protect finished internal surfaces from damage.
Indirect construction costs
Where damage necessitates the removal of framing and internal linings, the remediation design may also have to allow for the costs associated with the removal and reinstatement of:
- kitchen fittings, appliances and services such as pipework, particularly when they are located on an external wall that needs framing replaced
- floors and ceilings where water has tracked back along floor joists resulting in decay and therefore replacement of a portion of the members
- fittings and finishes to internal fire-rated and sound-rated party walls/floors where there has been water entry from an internal gutter or an unflashed party wall
- bathroom wet area linings and fittings where one wall of a tiled shower has to be removed and it is likely that the whole shower will need to be rebuilt so the integrity of the waterproofing to the tiles can be restored
- floor finishes such as tiles adjacent to the repaired walls
- guttering, downpipes and fascias
- dealing with the BCA, for example, allowing time for inspections as inspections are not usually able to be carried out on demand.
BRANZ recommends that the owner has the project managed for them. Project managers will generally be commissioned individually for stand-alone dwellings but are likely to be commissioned by the body corporate for multi-unit complexes. In all cases, there will be a cost to the owner for consultant services. Experienced practitioners will assist with the management of costs in the project.
Building consents will be required for almost all remediation work. Fees will vary according to the value of the remediation work and the BCA involved.
Depending on the scope and extent of the remediation, there will also be costs incurred that need to be factored into the budget for the work such as:
- the owner having to vacate the building and rent accommodation
- off-site storage of furniture
- additional building condition surveys
- legal costs
- body corporate costs
- security costs
- additional insurance premiums
- the owner’s lost work time or income
- materials having become unavailable
- provisional sums.
Estimates and contracts for repair work should include an allowance for a significant sum of money for contingencies – that is, costs that cannot be foreseen accurately before remediation work has started.
For each stage of remediation, the contingency amount should reflect the high side of the possible range. This will mean that it reduces as each stage passes, from the earliest diagnosis stage to the tender stage.
A contingency allowance increases the prospect that the owner will have enough funding to complete the project if the repair is more extensive than first estimated.
Depending on the particular project, the contingency fund may be up to 40-50% at the condition assessment stage, 20-30% at preliminary design stage, 20-25% at contract documentation stage and 15-20% during construction.
The extent of improvements (and its associated additional costs) should be clearly identified in the documentation.
A remediation project consists of a number of phases. The time taken to complete each will depend on the scope and complexity of the project. The longer the time, generally, the greater the cost. The steps include:
- evaluation of the existing information
- liaison by the remediation designer with the owner
- preparation of preliminary plans and cost estimates and agreeing the extent of the work
- preparation of the working drawings and specification for consent application and pricing
- consent application and approval (preferably before work is priced)
- getting the work priced (or tendered)
- acceptance of price or negotiation with a preferred contractor
- initial demolition
- monitoring of extent of work, tender price and completion date once the building is opened up
- final BCA sign-off and issuance of a Code compliance certificate
- maintenance period
- finalising of construction accounts.
Factors influencing timeframes
Factors that may affect timeframes can also include:
- continuing or unresolved litigation or appeals over liability, repair costs and extent of repair – if finances allow, it is generally considered better to repair the building and argue over liability later
- contractual disputes – a good contract tends to minimise the risk by providing a dispute resolution process
- bad weather
- consent approval
- in multi-unit remediation projects, one (or more) owners not willing (or able) to undertake or contribute to repairs
- remediation work being more extensive than that envisaged
- client changes during the process.
Updated: 9 September 2014