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Does Your Project Need an Owner's Representative?

By Chris O'Grady

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Does Your Project Need an Owner's Representative?

By Chris O'Grady

A Conductor on Your Team

Some Homeowners are highly skilled with building projects and have the time to manage all the details outside the General Contractor's scope. Yet, there are complex projects and/or very busy homeowners that would benefit from having someone on their team to coordinate EVERYTHING. This is where an Owner's Representative should be considered.

My role as the General Contractor (GC) on a project is to implement the design with a team of subcontractors. The term "General Contractor" is overly interpreted as being generally responsible for everything related to the project. Here is a list of items that typically fall outside the scope of the GC and are the responsibility of the Client/Homeowner.

  • Architectural Design
  • Engineering - Electrical, HVAC, Structural, and Plumping to name a few.
  • Interior Design
  • Accounts Payable / Invoice review and processing
  • Team contracts review and approval
  • Master Project Schedule (more than the GC’s schedule)
  • CAIT (Communications, Access, Information Technology or IT/AV)
  • FFE (Furniture, Fixtures & Equipment)
  • Millwork/Cabinetry design
  • Selecting finishes and fixtures
  • Landscape Design
  • Coastal Commission approval (varies per project)
  • Homeowner's Association approval (varies per project)
  • Budgeting for non-GC related scope
  • Pushing through hold-ups from the State, County, City, HOA, and utilities

Don't get me a wrong, a great GC will be involved with all these issues. But many of these functions are not contracted with the GC, therefore the GC has minimal influence or control. As they say, always follow the money.

Budgeting

Scope and budget planning are always a challenge. In the early design stages, the design team will do their best to ballpark a budget range for the project. Think of this ballpark estimate as a placeholder. All the Architects and Interior Designers we work with do a pretty good job of creating a placeholder budget. However, until the Construction Drawings are completed, and the finish details are selected, the construction budget is just a placeholder. The overall budget is much larger than the construction costs and includes all of the items listed above plus a few more issues.

A Client Representative will have more hands-on experience with the costs for construction and the finishes. And, if they do not know, they will find out. This is really important. Setting the proper budget expectations before construction allows everyone involved to make budgetary decisions much earlier. Nobody likes surprises.

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Bring Your Vision to Life
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Bring Your Vision to Life

All of my Clients have a passionate vision about building "this house". Their energy, passion, and vision are infectious. Everyone on the project is driven by this vision. The property is in the right spot with the right view and in the right neighborhood. BUT, and this is a BIG BUT, I see projects that never really get going because the details have brought it to a screeching halt. Well, sometimes a crawling halt.

We have all seen those construction projects in our neighborhood that kind of get going, but don't really get going or finish. I can only imagine the frustration the Homeowner has because their vision was never really brought to life. The project is typically mired in the details of planning and permitting and there isn't someone on the Team to get this project going. This is  where an Owner's Representative steps in and makes the vision come to life.

It is best to get the an Owner's Representative onboard to streamline the purchase and select the design/build team. A great Owner's Representative knows the codes (or will do the research) and make certain the property can fulfill the vision. Knowing the vision and facilitating the project means the Owner's Representative will streamline the purchase and team selection. Treating the Owner's Representative as the conductor is very similar to an orchestra conductor. The musicians all play the right notes with the rest of the team and deliver a unified experience towards that vision.

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An Operations Manager?
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An Operations Manager?

I sometimes encourage an Owner's Representative for complex projects and for clients that are really spread  thin. You can also think of an Owner's Representative as an Operations Manager for the construction project. This is someone on the homeowner's team that is paid directly by the homeowner and is completely committed to the homeowner's success. As an Operations Manager on your team, the Owner's Representative should:

  • Act as the voice of the homeowner
  • Understand and be able to interface with the Architect and Design team
  • Manage expectations and resolve issues
  • Manage budgets and timelines
  • Manage and authorize accounts payable
  • Facilitate effective communications
    • Coordinate: meetings, agendas for meetings, and post meeting follow-up action items
    • Implement project management tools
  • Quality control and risk management

In business, an Organization Chart will have a COO (Chief Operating Officer) directing all the operations. An Owner's Representative is that COO while the GC has their own Project Manager/Job Superintendent to handle construction site details. Architects will typically have a Project Architect to coordinate details as well. If you build an Org Chart for your construction project, a COO may make sense.

Is This an Added Cost?

As usual, the answer is yes and no. Yes, there will be an additional team member. An Owner's Representative will either charge hourly, as a percentage of the project or be on a monthly retainer. I prefer the latter because the first two options motivate the Owner's Representative to drive up hours or project size. The "no" part of this answer is that a good Owner's Representative can mitigate cost increases by asking good questions, preempt change orders, and offer alternatives for cost avoidance. They will also flush out budgets before construction to help a homeowner be fully aware of expenses (nobody likes expensive surprises).  An Owner's Representative will be highly experienced with Design and Construction, which will allow them to make sure the design is complete and correct before construction. Making it up as you go is the most expensive way to build anything. In the end, an Owner's Representative' fees can be covered, and then some, by becoming a part of the Team in the early states of a Project’s development.

What is Your Time Worth?

I never ask this question, but I can speculate on my Client's hourly rate. If they could charge by the hour, what is their time worth? As a somewhat extreme answer, Warren Buffet was earning about $1.5M/hour in 2013! Now, that is an extreme answer, but my clients are successful and their time has significant value. An Owner's Representative's hourly rate and expertise on the construction project help my clients focus on their business(es) and do what they do best. Consider this tradeoff when evaluating adding this person to your team.

A Temporary Role

Construction projects are temporary. The resources and skills for the project are highly specialized and temporary. It is common for a business to bring in temporary help when a labor need is short term and highly specialized. I encourage some clients to explore this idea of having assistance for their project.

Referrals

I have vetted and worked with some Owner's Representative . Please contact me for references and contact information. Full disclosure, I do not have any business relationship or receive commissions for the Owner's Representative I will recommend.