Every construction project has a specified time and cost. The reality, however, is that some inevitable conditions and unavoidable uncertainties make completion a difficult task to accomplish. Delay on your new construction home is frustrating and costly. While there are reasons that are beyond the control of the builder like adverse weather, supplier delays, labor shortages or equipment failures, most construction delays are avoidable. Knowing the type of schedule delays will help us understand the cost and impact to the contractor and the owner.
There are various reasons that can delay the construction of your new home and the result is costly. We’re talking about interest carry costs for your construction loan, the cost of utilities and rental expense, insurance, and real estate taxes just to name a few. Now, let’s briefly discuss the types of schedule delays on your new construction home.
Excusable & non-excusable Delays
Excusable Delays are unavoidable conditions that are reasonably unforeseen.
This type of delay is beyond the contractor or the owner’s control, which may include:
- Natural disasters
- Terrorist Attacks
- Changes initiated by the client
- Delay from the client (e.g. decisions, approvals, etc)
- Political/Social Unrest
- Lack of action by governmental or oversight bodies
- Inaccuracies and omissions in the plans, design docs, and specifications
Non-Excusable Delays are a result of a delay on your new construction home that was within the control of the owner or the contractor.
- Delayed Mobilization
- Delayed Procurement
- Delayed submission of important documents
- Overall late performance and execution
- Late performance by suppliers or subcontractors
- Faulty workmanship by the contractor or subcontractor
- A project specific labor strike (e.g. unfair job practices, contractor’s unwillingness to negotiate)
- Inadequate Planning and Scheduling
Critical or non-critical Delays
A Critical schedule delay is one that impacts the project’s delivery date. Non-critical delays are delays that doesn’t extend the duration of the project. Whether the type of critical delay is excusable or not, it will still have an effect, one way or another, in the activities involve in getting the project completed as well as the project cost estimates.
Concurrent Delays
Concurrent Delays happen when two or more delays occur at the same time affecting multiple activities that can eventually affect the completion of the project. Due to the overlapping of the delays and the fact that more parties are involved in the delay, it’s challenging to determine which party and to what extent is their contribution in the delay. This determination is crucial in order to determine whether or not the contractor is entitled for extension of time & cost claim.
Compensable or non-compensable Delays
Non-compensable delays are those delays where the contractor is solely at fault for the delay event and depending on the situation, may fall under critical, non-critical, excusable or non-excusable. Whereas, all compensable delays fall under excusable delays.
It is important to note that your builder can change the date if you have a tentative closing or occupancy date. But if your new construction home isn’t completed for possession by the specified date, then your builder may be required to provide compensation under the new home warranty.
Time delay is very common in construction projects and though this can be unavoidable, delays can still have a costly impact on clients, contractors, and consultants. Left unchecked and it can build up and delay you’re new home construction.
Talk to a real estate professional or a trusted local builder about your purchase agreement and the attached addendum. Ask about the closing or occupancy date and if there is any term specified if there will be delays. An experienced realtor in new construction homes will inform you about the type of compensation you’re entitled to if there is going to be a delay. Some delays are inevitable, but it’s crucial that you know your warranty rights as a new construction home buyer.
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