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Dream Homes Nearly Famous Rebuilding Blog – 7-5-15 – 7 Reasons Your Project is Delayed, Explaining Design Scope vs Contingency Fees, Reopening your FEMA Grant, Rebuild Seminar review

Dream Homes Ltd.

Atlantic Northeast Construction LLC

Nearly Famous Rebuilding Blog –

7-4-15

Hello Sandsters and Happy 4th of July!

Hopefully you had a fantastic holiday with your family and got to see some fireworks, other than the ones on your project. The weather cooperated, which is always a great thing.

Today, we’re reminding you again about filing for new FEMA claims if you think you are entitled to more money, because time is running out. We talk about the main reasons for project delays, and try again to explain contingency funds vs. the design scope budget. We mention a few tips about effective email communication. Finally, we review our last Nearly Famous Rebuilding Seminar which was Thursday night June 25th at Tuscany Bistro Bar in Toms River.

Delays in your project: Why are they happening?

Generally, delays in construction projects are caused by a limited number of categories. They are: changes to the scope of work, cash flow, site conditions, lack of construction knowledge, material or labor shortages, poor planning or fraud. Some of these you can prevent, and some you just have to deal with. It will help your brain to understand them to a greater degree.

Let’s look at the worst cause first, since we’ve discussed it before in detail – fraud.

  1. Fraud – If you’ve been following the blog for a while, I’ve written extensively about how to prevent losing your money due to either incompetence or out and out fraud. If you haven’t, go back and ready the last few blogs where I discuss this in detail. At the seminars we also spend a lot of time on this item. Most events of fraud can be eliminated with some simple planning and common sense precautions.
  1. Changes to the scope of work: The more you add or remove items from your project, the greater the chance for delay. This is not to say changes shouldn’t be made, but that you should be aware that they may (will) add time and chance of error to the project. Note that many changes require permit updates with either building or zoning, or both. Solution: Some modifications are inevitable, but whenever possible, try and keep changes to a minimum so your project can move along as scheduled.
  1. Cash flow: Another key item I’ve written about extensively in the past. Assuming your builder or contractor is honest, often they may be unable to fund your project without regular payments for completed work. This cause for delay is easily avoided by having direct conversation with your builder and explaining your circumstances. This way, they will be aware and can either accept the project on the terms you need, or decline because they will be unable to fund the project while waiting for you to receive funding.
  1. Site conditions / contingencies: There is little you can do about this category. Generally it is difficult or impossible to determine the exact conditions under a house until it has been elevated. Once that occurs, rotten wood, termite damage, twisted or missing girders or foundation deficiencies can be discovered. This cause for delay is generally not significant.
  1. Poor planning: This is an elementary factor and one you can keep tabs on prior and during the project. Ask for a schedule of planned events, with trigger dates (IE: Within 1 week or receiving building permit, we will elevate the house) and follow the progress. Your builder should have a very clear idea what the next items in the schedule are and that is something you should be aware of.

Note: This does not mean that you call 3 times a day asking your builder what is happening and why the electrician is not on your job. Remember: You are not paying to be educated on how to build, but for a finished project. Keeping track of events means following a general time line, not asking why the framers ran out of gas for the generator. Obsessing over the detail will drive you insane.

  1. Lack of specific construction knowledge: This is a tough one, and one you won’t really know if your builder can handle unforeseen events until you are in the project and something unplanned occurs. You should do your own due diligence and visit other projects and speak to references. That will give you a very good idea of the experience level of your contractor. Reminder: You want a builder who has completed at least 25 elevation projects. This does not include demo and rebuild projects which are much easier.
  1. Material & labor shortages: Welcome to the new normal. It has become commonplace for sub-contractors as well as professionals to underestimate the time needed to complete work, as well as when it can be started. It’s unfortunate, but it is something we are all dealing with in the field. Having several qualified people in each category is helpful, but the reality is that the best people are busy and sometimes you are delayed while waiting for them to fit your work in their schedule. Note that when a contractor or professional promises your builder an item will be ready at a certain time and your builder relays that information to you, he is representing what he believes will be occurring, to the best of his knowledge. If the subcontractor or professional does not perform in a timely manner, your builder didn’t “lie” to you. He is more annoyed and inconvenienced than you are.

FEMA Insurance Scandal & Reopening Claims: Time is running out

Letters have gone out to ALL policy holders who made a claim for Sandy damages. If you haven’t filed yet, should you? Here is a good article from NJ Spotlight. It helps clarify some points.

http://www.njspotlight.com/stories/15/06/11/some-sandy-victims-have-second-thoughts-about-reopening-flood-insurance-claims/

Nearly Famous Rebuilding Seminar – Review from Thursday 6/25/15:

Our last Nearly Famous seminar was held on Thursday, June 25th at the Tuscany House restaurant in Toms River, across from the Ocean County mall on Hooper Avenue. The theme was Getting Started, and we focused on Sandsters that are early in the process, and have not completed design work, or chosen a builder or architect. We concentrated engineering & architectural design advice, RREM guidance at the initial stages, and information about choosing the right builder or contractor. It really helped to focus the topic and clarified a lot for the Sandsters that are just getting started and most need specific advice.

We were in the Fire Room, which is an indoor/ outdoor space. Our speakers were Kathy Dotoli, Esq., George Kasimos from Stop Fema Now and myself. It was a great seminar and being able to have a glass of wine and some hot pizza was a great touch. In July or early August, we’ll be having another and I’m thinking about doing the same thing at the Tuscan Bar & Bistro in Bricktown. Stay tuned and drop me an email or give me a call if you’d like to attend the next seminar.

Contingency funds vs. Design scope funding:

I’ve written and spoken extensively about this item but many Sandsters are confused about it, so here we go again.

There is a tremendous amount of misunderstanding about these 2 categories, and here is the straight scoop.

Design scope: These costs are defined as architectural and engineering fees, all survey costs (survey, plot plan, foundation as built, flood elevation certificate and final survey), soil boring & geotechnical costs, cribbing diagrams, permit fees, soil conservation design, and wind load calculations.

Notwithstanding anything my friend George Kasimos may think (sorry George!) but you do not get $15,000 in cash to spend on your design scope. You get up to $15,000, depending on what your actual costs are.   So if your design costs are $9,200 you get $9,200. If they are $14,000, you get $14,000. If they are $16,600, you get $15,000. The balance of any remaining money in the $15,000 design scope budget does not go back into your grant and you don’t get to keep the extra cash.  

In the “to make matters more frustrating and confusing category”, if you signed your grant prior to October 1, 2014, you are not eligible for the extra $15,000 in design scope funding.

Note: I have seen a number of clients kick, scream & please enough to have the $15,000 added to their grant, even though they had signed before 10/1/14, but that is not the policy.

Contingency costs: This item is part of your grant package and is designed to provide for unforeseen events or conditions that must be corrected in order to obtain a Certificate of Occupancy (CO) and finish your project.

These are not mistakes, omissions or errors on your part, your builder’s part or the design professional that did the plans. Rather they are items that are not knowable or evident in the actual structure until it is elevated, or the result of one of the shore townships deciding arbitrarily to change, invent or augment the existing building code.

These items include (but are definitely not limited to) rotten or termite infested sheathing, wall studs or sill plates, twisted, broken or rotten girders, site conditions or changes needed to comply with current codes which were not in place when the house is built, upgrades to water pits or valves required by the MUA, installation of hard wired smoke & CO2 detectors, installation of condensate lines to the exterior from the dryer, and about 50 other items that we’ve encountered.

These items should be itemized by your builder in a separate sheet and submitted to RREM. 95% of the time you will be reimbursed.

There is not a monetary limit to this contingency, although it is generally 5% – 10% of the grant amount.

The contingency does not come out of your grant award.

Hope that helps, Sandsters. Any questions, give me a call or an email.

RREM Performance Bond Lunacy – Update

Thankfully the state has given a 1 year reprieve from this requirement, and modified the law so that only house lifters have to bond their portion of the project. This is still an annoyance and increases costs slightly (on the order of $500 – $1500 per project) but it is not the disaster that it could have been if every contractor was required to bond each job. Score 1 (small size) for the good guys.

Tip – Follow the Nearly Famous Blog: If you don’t want to miss any of my blogs, go the blog and “follow” it. Some times I don’t send email alerts when I blog. If you “follow” the blog you will get an email reminder whenever I post. We’re also on Facebook if you want to Friend us or post a comment.

Stop FEMA Now Association: We’re now a proud sponsor of Stop Fema Now  which is an excellent organization trying to save and protect NJ Sandsters (as well as other states) from FEMA tyranny. To get involved and either donate or volunteer your time to this worthy effort, please visit their web site, which is www.stopfemanow.com

New development: Dream Homes Mobile Web Site is now Live!

You can now log onto www.dreamhomesltd.com from your mobile device and see a mobile site tailored to a smaller screen.

Design work and timing: Fall 2015. You should be working now on your design scope and scheduling for a September / October start to your project. We currently have a dozen Sandster projects we are starting in the fall – all have either completed or are actively working on their design scope at this time so permits will be ready and plans can be made to secure alternate housing. Besides, there are much cheaper rentals in the fall/winter at the shore.

Definitions & Important Considerations That Can Delay Your Project:

Lowest adjacent grade (LAG): This is an important elevation since the lowest point in your crawl space has to be even or above the LAG. That is important because even if you don’t want your crawl filled that much (so you have more storage space) you will not pass final zoning / final building if this condition is not met. LAG is defined as the lowest grade immediately next to your house. There can easily be a foot or more difference between one side and the other, or back to front, so if you wish to use the least amount of fill (maximizing room in the crawl) make sure you find the lowest adjacent elevation.

Elevation: Elevation refers to “height above sea level” and not the height above grade at the house or distance the house is being elevated. It’s easy to make a mistake with these descriptions and it causes much confusion. Example: If you are raising your home to elevation 11, your finished floor is 6 and your grade is 4.5, you are raising your house 5’ to elevation 11, or 6.5’ above grade. When you use the expression “elevating my home 5 feet” that means you are lifting it 5’ from where it is now. The expression “building or raising the home to elevation 11” refers to the height above sea level, not the distance you are lifting.

Survey: An exact depiction of what exists on your lot, from a top view.

Plot plan: A top view of what you are proposing to build, including new heights, stairs, entries, decks, etc.

They are not the same and you will need both for your project.

HVAC Elevation height in crawl space: This must be considered when planning your lift. This is the elevation of the lowest duct, furnace or air handler in your crawl space. Most townships require a minimum elevation of base flood, some townships have no restriction, and some are at minimum BF + 1 to the bottom.

You Tube Link to a Nearly Famous Rebuilding Seminar: If you’ve missed our seminars and can’t easily attend, here is a link https://www.youtube.com/channel/UCVI69KoM8DRXqoEblHd94xg

It is not edited and is about 2 hours so feel free to fast forward and skip around to watch what you like and need to know.

Remember – if you have a specific question, send me an email or a text. Don’t wait for a seminar or a site visit to clarify a point. Whether or not you are Dream Homes/Atlantic Northeast Construction client or not, I’ll always try and help you or guide you in the right direction. If you’ve sent an email or left a voice mail and haven’t received a response, try and contact me again. Messages are lost occasionally.

Note to Sandsters: Though I write this blog to help as many Sandsters as possible, Dream Homes Ltd. and Atlantic Northeast Construction LLC are new home builders and general contractors who are actively renovating and reconstructing projects up and down the shore. We actually do all of the work that I talk about in the blog. We work with private clients and Path B clients in the RREM program. Call, text or email to set up an appointment for an estimate on your rebuilding project.

That’s all for today Sandsters. I hope it helps you move forward. As always, call or write with any questions.

Stay well.

Regards,

Vince

Dream Homes Ltd.

Atlantic Northeast Construction LLC

Licensed NJ New Home Builder License# 045894

Licensed NJ Home Improvement Contractor License# 13VH07489000

PO Box 627 Forked River, NJ 08731

Office: 609 693 8881 F: 609 693 3802

Cell: 732 300 5619

Email: vince@dreamhomesltd.com

Website: www.dreamhomesltd.com

Blog: http://blog.dreamhomesltd.com

Twitter: foxbuilder

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