When you hire a construction company, they give you a quote and you sign the contract based on their projections. They will tell you what they think the project will cost and how long they expect it to take. You review the details before you sign.
Many people assume that they're paying for exactly what is outlined in that quote. They sign because they like the final price -- or at least accept it -- and the time frame. Unfortunately, the reality is that most large projects take longer and cost more than those initial quotes.
The difference can be incredible. For instance, one report claimed that these jobs tended to go a stunning 80 percent overbudget, while taking 20 percent longer for the work to get done than was initially scheduled.
So, if you thought you would be paying $1 million for a 10-week job, you may actually end up paying $1.8 million for a 12-week job.
The reasons for these issues are many. Sometimes, contractors and property owners have very different ideas about the realities of the project. In other cases, information sharing isn't optimal and avoidable mistakes are made. In still other cases, contractors and owners may fundamentally disagree on things like changes to the project, overall progress and even who is responsible for increased costs.
As you can imagine, a job that goes overbudget and takes too long can absolutely lead to disputes between the builder and the party that signed the initial contract. When this happens, it is very important for those involved to know their legal rights.
Source: Honest Buildings, "McKinsey finds staggering increase in construction cost overruns," Pauline Nee, accessed May 24, 2018