The most common mantra and number one rule of real estate is “location, location, location” and for good reason. While most attribute the famous mantra to the financial value of their property there are many other important contributing factors that attract one to purchase a home in a specific location. These factors include school district, recreation, surrounding nature, shopping, entertainment, public transportation, health care, and jobs. Unfortunately in Toronto and the Greater Toronto Area (GTA), many homes that were built in great locations over the last hundred and fifty years were not built to meet the needs of today’s owners and their families. These older homes lacked functionality and most importantly size for the modern family. While traditionally homeowners with growing families have opted to list their homes and move to larger homes in the suburbs, a strong growing trend has emerged in recent years of homeowners who absolutely love their the neighbourhood and their specific location and are prepared to take on adding an addition to their home. While selling your home and moving can be an arduous process it has become quite routine and common practice. Unfortunately, on the flip side, when it comes to adding an addition to your home, most homeowners have no idea where to start, what the process is, what their options are and what the associated costs might be. This article aims to provide some insight into to these areas.
Prior to embarking on an addition project, I would like to reiterate that it is imperative to understand that construction, in general, is a costly venture and depending on the planning process and the specific scope of work, can be a major financial commitment. Before setting out to construct an addition you must first ensure that you have the necessary budgets to plan, construct, and prepare for contingencies.
Planning: Planning is by far the most important phase in the addition process as homeowner’s needs are addressed, designed elements are considered and implemented, and a general scope of work is established which will form the foundation of significant construction costs for the project. A smart and well thought out plan will carry forward in to the physical construction of the project and will minimize many unknown construction cost items, added costs, and eliminate construction delays. Working with the right people is the best way to ensure that information is presented up front and the process flows as smoothly as possible. Planning costs can very depending of the size and scope of the project and the firm a client wishes to engage with. While often tempting, note that working with the lowest cost provider in town is never a good idea and can tail spin your project right from the get-go. Planning may include property surveys, measurements of the home, principles designer costs, senior architectural technician costs, architectural technician costs, structural engineering costs, mechanical engineering and designing costs, subcontractors for tasks like test holes, Toronto Regional Conservation Authority (TRCA) fees, various city fees such as damage deposits, city permit fees, and printing costs. Without properly completing the planning phase a reputable general contractor is not able to accurately price out a project and up until that point can only ballpark the complete cost of a project. A ballpark price is not an accurate price and can vary substantially when all necessary planning details are finalized.
So where to start? Well you have a few options as to how you can go about initiating the planning phase. Traditionally most homeowners looking to build an addition will hire an architect or architectural firm to design plans, provide engineering consultation, representation if a committee of adjustments hearing is required, handle associated administrative tasks, and finally obtain city permits. The architect will then hand off the city approved plans and permits back to their clients which then allows the clients to approach builders and/or general contracting firms to price out the project based on the city approved plans and a desired scope of work. Alternatively, some engineering firms offer the same services and can be approached to handle a homeowner’s addition planning needs. While traditionally either approaching an architectural firm or an engineering firm has been the path many have chosen to venture down to accomplish the planning phase for their addition, a very effective third option is emerging as a popular choice. Many homeowners are deciding to approach a reputable general contractor as their first point of contact. The reason is threefold.
- An experienced general contractor will have a solid working relationship with an architectural/engineering firm minimizing back and forth questions and the subsequent associated costs to the client.
- The general contractor will ultimately be the one putting together the physical product and their input when it comes to building science is vital. Examples of this include architects that like to incorporate design elements that, while visually appealing, can cause issues down the road. With regards to engineering, engineers tend to over build items that can be unnecessary and costly for residential construction.
- The general contractor can provide added value by managing the scope of work through the planning process ultimately controlling costs and managing budgets for clients as architects and engineers are rarely familiar with various construction pricing. From our many years of experience as general contractors, we highly recommend contacting us first to initiate the process. Ultimately it will make for a much smoother experience for the client as the general contractor is there from the first day of planning to the last day of construction and beyond (i.e. serving and/or warranty).
Construction: Once the approved city permits are in hand, the detailed scope of work has been formalized, and a renovation agreement has been signed, construction can commence. If the planning phase was completed properly an experienced and reputable general contractor will be able to execute the physical construction bringing your dream to reality, but there are a few things to consider during the construction phase that may come as a surprise. Keep in mind surprises cost money and clients wishing to engage in building an addition must have a contingency budget available.
Contingencies: We recommend about 10-20% of the cost of the project, depending on initial size and scope. The contingency budget can be built into the cost of the project or it can be held separately, but regardless of where the money is, it needs to be available to avoid potential issues and keep the project moving forward. The reality is that even the best general contractors in the business cannot account for everything. Nobody has x-ray vision and, like most large projects, not all costs can be accounted for. It’s impossible. City inspectors are notorious for adding to costs as they regularly instruct contractors to bring other areas of a home outside the agreed scope of work up to code. Other extra costs may come into the picture in the form of what we refer to as a “causality cost” of a renovation. For example, if an electrician has to make holes in a wall to run new wires for additional fixtures, the wall has to be repaired. If the cost to fix the wall was never considered, that cost will come from the contingency budget. Contingency budgets may also be used to cover temporary fencing requirements, tree hoarding, extra general labour, and most importantly, project cost over runs. Contingency budgets have also been used to allow for clients to upgrade fixtures and finishes, but this has to be done with extreme caution as tracking project financials can change over the course of the project. Project cost overruns need to be covered by the client. Contractors can only be so sympathetic if you upgrade to gold faucets and cannot afford to pay for required cost overrun items as a result. It is vitally important to have close communication with your general contractor regarding financials, especially when undergoing larger projects such as additions and full-scale home renovations.
Deciding to move forward with constructing an addition is a very involved process and requires an immense amount of coordination and cooperation between all parties involved. It is very important to note that timelines should never be rushed during the process, as, from our experience, there is a certain flow that must exist for things to go smoothly from start to finish. If this rule is not adhered to, the consequences can be substantial.
We hope this article provided some insight into the home addition process and if you have any questions regarding any phase of the process, we would be more than happy to assist in answering those questions. Please feel free to contact us.