Substantial completion is the point in a project where the work is complete enough to be ready for use and occupancy. Substantial completion can be one date for everything or interim milestones for certain phases depending on the complexity of the job. Final completion is when work is advanced to 100 percent complete including all paperwork closed out with the exception of final payment to the contractor.
Frequently Asked Questions (FAQ)
Not really. These two terms relate to the type of pricing structure and responsibilities between owner and contractor.
A general contractor is often a prime hired by an owner to perform all work on a project. A subcontractor is usually a trade contractor (i.e., concrete or electrical) who specializes in performing a defined subset of the work. When a project involves larger chunks of specialty work, the owner may hire multiple prime contractors, each of which takes on specific portions of the project. One could be the lead or generalist, but does not sit above the others.
2008 by founder, owner and principal Jonathan Williams.
While based in Laurel in the State of Maryland, we have worked in and covered almost the entire United States. And, we are open to challenges and opportunities beyond.
No, we are construction management agents and advisors. We coordinate many types of vendors to investigate, design and make things happen. Those parties are usually contracted directly with a property / project owner.
The company exists to help clients organize and achieve their visions. Our founder searched for words that did not include his name and invoked action. Plus, our work is predominantly project-oriented. After tacking on -ives to projects, he then researched whether others were using the word “projectives.” He discovered that it was not used in business, but did have interesting and somewhat relevant uses in psychology and plane geometry. Eventually the word “real” was added in front of the name to clarify our focus on the real estate industry.
Frequently Used Terms
Capital expenditure (capex) – a cost that, from an accounting standpoint, is capitalized to increase the value of an asset and then depreciated over a specific term.
Capital improvement – renovation of real estate that extends or expands the life and characteristics of a property. Examples include: a new garage, replacing an HVAC unit and renovating a common building area.
Contract – a written agreement between two parties (often owner and contractor).
Cost of the work – costs and expenses incurred in performance of expected project work.
Development – improving raw land or adapting existing structures into new buildings.
Draw – the process of requesting funds from either a bank or loan account to pay the bills for each period. Funding sources vary widely and the draw process can be simple or complex.
Entitlement – legal permissions to develop real estate for a particular use.
Fee – a markup (percentage or fixed amount) applied on top of costs that a vendor includes in its price to capture overhead and profit.
FF&E – a common acronym referring to fixtures, furnishings and equipment.
Fit out – building out of interior space from raw shell condition for a particular use.
General conditions – those obligations and administrative expenses of a contractor that are necessary for the general benefit of contracted scope of work.
Lease – agreement between a user (lessee / tenant) and owner (lessor / landlord) of property to rent a defined space for a period of time.
Lien – a legal right to payment attached to property. Each state provides mechanic’s lien rights, such that a contractor performing work on real estate has statutory procedures to collect funds owed. Owners desire, and may have obligations to lenders, to keep title to their property clear of liens so will obtain lien releases from each vendor as they are paid.
Overhead – costs by vendor for business management and administration not directly tied to a specific project. May also be called home office overhead.
Owner – in our industry, the term owner is the buyer of goods or services from vendors and may or may not be the actual owner of a property.
Payment application – in our industry a special term for an invoice. Contractors submit an application / request for payment to owners, generally monthly, as work is progressed.
Portfolio – a collection of initiatives and projects that may have many relationships, but may only have one thing in common – they are all regarding the same organization.
Procurement – the process of sourcing, purchasing and delivering goods and services for a project.
Profit – amount a business (vendor) makes when income exceeds expenses / costs .
Program – a group of related projects managed in a coordinate manner to achieve collective benefits.
Project – fundamentally a project is a specific scope of work to be done usually within a defined time frame and for a desired budget. Every project has a beginning and an end.
Real estate – a bundle of legal rights and obligations comprised of land, improvements, minerals and air rights. Real estate does not usually include things that aren’t permanently attached, such as furniture, equipment, and personal and intellectual property.
Renovation – modifying an existing space or building to be more fitting to current needs, aesthetics and efficiencies.
Retainage – withholding of payment of the value of the work completed as it progresses so that the owner has a means of ensuring punch list work and administrative close out are completed.
Shell conditions – status of a space at the time of possession. This can range from bare structure, to basic walls, to fully conditioned and only needing finishes.
Stored materials – supplies that are purchased in advance, but not yet incorporated into the work of the project. Materials can include lumber, steel, equipment, light fixtures and flooring. Materials may be stored on the jobsite or off-site in a yard or warehouse.
The “Work” – the objectives and results frequently described by a set of plans (drawings) and narratives (specifications) as referenced in a particular agreement. The work can comprise a portion of the project or the entire project.