An unfinished building always looks like a gold mine from the street because the slab has been poured, the steel is in place, and another company has taken care of the slowest and most costly phase of the project. Next, you open the project file and discover that the drawing set in the trailer is two versions behind the city-approved set.
This kind of scenario is typical of an inherited project, and it illustrates how the walkthrough is the easy part of the process, while the real work takes place at a desk. The first order of business is to determine who else has an interest in the property.
Start With Who Still Has a Claim on the Property
Before you start investigating the walls, determine who is owed money. A contractor who walks away from a project typically leaves behind unpaid subcontractors and vendors, and in nearly every state in the country they can place mechanic’s liens on the property rather than going after the original buyer’s bank account. Obtain a title report and ask the local recording office about any filed liens or notice of commencement forms.
If standard payment applications were used in the project, then these should have shown the amount billed for every line item in the SOV, so you can now compare them against the amount that you can actually see in the field. If 60 percent of the structure has been billed but only 30 percent is complete on site, then there’s your discrepancy.
Insurance belongs in this same first pass. A builder’s risk policy often lapses or becomes void when the named contractor leaves, and a new one may not cover prior damage. Confirm what coverage exists today and who the named insureds are. If a surety issued a performance bond, find out whether it has been notified of the default, since on bonded projects the surety can sometimes arrange completion work.
Bring in a Third Party to Look at the Work
Here is where commercial building construction adds value, in that there are more thorough inspections, quality control measures, and established lines of responsibility among several specialized firms. Having an independent structural engineer or licensed building inspector review the completed work before you take over provides an extra layer of confidence and helps confirm that the building meets the required standards. Ask them to document existing conditions with dated photographs, creating a reliable record of the property’s condition and any work that may need attention.
Make sure to inspect anything that has been exposed to the elements. Exposed rebar that has been out for months, unprotected framing, and open penetrations can cause unseen damage. Addressing problems caused by exposure at an early stage will make it easier to solve them before they become costly fixes.
Check the Permit and Inspection File
Once someone qualified has looked at the physical work, check the file against it. The permit set and any approved revisions should match the sheets sitting in the site trailer, and if they do not, you need to know which version the crews were actually building from. Most municipal building departments now publish permit records through online portals, and the full inspection history will show whether footings, rough-ins, and other concealed work were signed off before they were covered. A missing inspection means someone may have to open up completed work later, and that cost lands on whoever owns the problem at that point.
Special inspection reports and material certifications deserve the same treatment. They should line up with the concrete, steel, and fireproofing that the engineer found in place.
Understand Why the Last Team Left
When the documentation and the actual property contradict each other, the reason the previous team had to leave usually gives you a hint as to what is going on. The person who was dismissed due to lack of funds will tell you something different from the person who was fired because of shoddy work, and both of these will be different from the project suspended because of zoning problems, so make sure that you get the letter or documents confirming the termination or suspension.
Talk to the subcontractors directly, especially the ones who were mid-scope. They will often tell you in ten minutes what the project manager’s summary left out.
Then Build Your Own Plan
You must not inherit the old schedule. The old schedule was prepared on the basis of the team and the supply chain which is no longer there, so you must re-plan the schedule based on the facts, keeping realistic lead times for everything that has not been ordered yet. The project management software will be useful only to the extent that it consolidates RFIs, submittals, and drawings versions for you while you recreate the history which you have not seen. The takeover requires more contingency than the fresh new start.
Taking over someone else’s project can still make financial sense, but only when you know exactly what you are inheriting, and the answer to that question is almost always in the paperwork before it is in the building.
