Construction Monitoring

 

Before Construction Starts and During

 

For equity or debt investors in new development projects, discovering and resolving potential problems, errors or omissions that could result in cost overruns, project delays or potential litigation is a high priority. LCI’s Preconstruction Services are designed to provide our clients with the information necessary to make a well-informed decision regarding the potential risks of a project LCI will prepare a report which includes a comprehensive review and analysis of construction project information, documentation and budget, which outlines various factors that may impact construction cost and schedule.  The report consists of the Document Review and the Cost Review of the contractors proposed budget.

 

 

Document Review

 

The document review includes an independent evaluation of the plans and specifications for completeness, appropriateness and accuracy.  Documents to be reviewed can consist of the following:

 

  • Construction contract(s)
  • ALTA Survey
  • Geotechnical reports
  • Civil engineering drawings and specifications
  • Structural engineering drawings and specifications
  • Architectural drawings and specifications
  • MEP drawings and specifications
  • Project schedules
  • Agreements (between borrower/general contractor, borrower/architect or engineer)
  • Verify conformance between contract documents and the construction loan agreement
  • Permits
  • Will-serve letters for utilities including water, sanitary sewer, gas, electric, telephone
  • Copies of any public works agreements for required on- or off-site work

 

Cost Review

 

The cost review includes an evaluation of the proposed budget with an in-depth analysis of the construction budget and contingency to complete the proposed development within the project schedule timeline. Documents to be reviewed include the following:

 

  • Construction budget
  • Development budget
  • Loan hard cost budget
  • Comparison of the project budget to those of other similar projects

 

Construction Progress Monitoring

 

Construction project schedule delays, unapproved materials substitutions, and cost overruns can result in a delayed return on investment, a potentially less valuable/desirable asset, and budgetary shortfalls which may require the outlay of significant additional capital. LCI’s construction experts perform periodic construction progress monitoring visits to ensure that the project is on schedule, in conformance with approved plans/specifications, the funding disbursement requests are appropriate for work completed in place, and that the project budget includes sufficient funds to complete.

LCI provides an unbiased assessment of the work in progress for both Lenders and Owners (independent of the general contractor and design professionals) and makes recommendations.  These construction loan monitoring services can be tailored to meet the specific needs and requirements of each client, and can be provided on projects at the preconstruction phase or those currently under construction. LCI can provide these services on a nationwide basis.

 

During the process, LCI can perform the following:

 

  • Periodic site visits to document/evaluate the quality, quantity, and status of work completed
  • Verify that work in place conforms with contractor’s application for payment
  • Confirm the project status conforms with the construction schedule
  • Confirm that work in place conforms with approved plans and specifications and no substantive changes are made without client knowledge
  • Review and evaluate all change orders
  • Review available lien waivers
  • Confirm and document the inventory of stored materials on or off site
  • Assess the adequacy of funds to complete the project
  • Review and record special inspection reports
  • Provide a client-specific written report with photographic documentation, a summary of findings, and recommendations for the disbursement request