Contingency and hidden-condition questions for a $107,400 Los Angeles renovation

M

miro_roofs

Property investor
Established
The budget has little value unless the unknown work and permit timing are allowed for. The property is an older 1,020 sq ft small multifamily in Los Angeles, and my preliminary renovation figure is $107,400.

The planned work includes the kitchen, bathrooms, floors, painting, electrical checks and some energy-efficiency improvements. There is no proposed extension. My bigger concern is what may be discovered once walls and flooring come up, especially where plumbing is difficult to reach.

What contingency would you set aside? Before accepting the budget, I also want to know what contractors and inspectors should confirm about moisture, wiring, structural issues, plumbing routes, exclusions, lead times and permits.
 
For an older building where walls will be opened, I’d be uncomfortable with a thin contingency. Something around 15% might work if investigations are thorough; closer to 20–25% if plumbing, wiring and moisture remain largely unknown.

More important: keep contingency outside the contractor’s base number. Otherwise allowances and foreseeable omissions can quietly consume it before genuine surprises appear.
 
How many kitchens and bathrooms are involved, and are fixtures staying in their current locations? Also, will any part remain occupied? Those answers affect plumbing access and sequencing much more than the square footage alone.
 
Good questions. I’d also ask each bidder to identify exactly what “electrical checks” means. Visual inspection, testing existing circuits, panel work and replacement of concealed wiring are very different scopes. A vague line item there can become the first major change order.
 
I disagree slightly with solving this mainly by increasing contingency. A large reserve does not repair an incomplete scope. Spend some effort before bidding on targeted openings or other minimally invasive investigation where practical, then have every contractor price the same written assumptions.
 
Require a written exclusions list with each proposal. Ask specifically about demolition and disposal, wall repair after trade access, damaged subfloor, plumbing behind cabinets, patching after electrical work, permit-related work, protection of retained areas and final cleanup. The gaps between trades are where budgets often become hard to follow.
 
Plumbing access deserves its own conversation. “Replace bathroom finishes” can mean leaving everything behind the wall untouched, or discovering that drains and supplies need attention once fixtures are removed. Ask who pays for opening and closing walls and whether access from another unit is assumed.
 
Sequence the investigative work before ordering finish materials. Confirm concealed conditions, settle any electrical and plumbing changes, then finalize cabinets, tile and flooring quantities. Ordering early can protect a schedule, but ordering against an unsettled layout can lock you into expensive compromises.
 
Don’t treat moisture as only a bathroom issue. Ask for attention around windows, exterior penetrations, under sinks and at floor transitions. If staining or soft material is visible, understand the source before covering it. New paint and flooring can hide symptoms without addressing the cause.
 
Building on Bianca’s point, ask whether the plumbing price assumes access is already available. That single assumption changes demolition, patching and scheduling across multiple trades.
 
For lead times, have the contractor mark which selections must be made before demolition and which can wait until dimensions are verified. Cabinets and any size-dependent items should not be treated the same as ordinary paint or readily substituted finishes.
 
Permit timing should appear in the sequence rather than as a footnote. Ask what work the contractor assumes will require permits in Los Angeles, who prepares submissions, what cannot start while approvals are pending, and whether the price includes revisions or only the initial submission. Local requirements and timing need confirmation for this particular scope.
 
I’d request a simple schedule of allowances too. If the $107,400 includes placeholders for fixtures, tile or electrical repairs, label each amount and state what labor is included. Then compare proposals on the same basis rather than mistaking a low allowance for a lower construction cost.
 
This is helping. My budget currently combines fairly defined finish work with much looser electrical, plumbing and hidden-condition assumptions, so the total looks more certain than it is.

I’m going to rewrite the request into three parts: fixed visible scope, allowances that bidders must state clearly, and unknown conditions held outside the base contract. I’ll also ask for sequencing and exclusions with the price. No extension is planned, but I won’t assume that means no structural repair could emerge after opening finishes.
 
That separation will make the bids far more useful. I’d add a pre-bid walk-through where everyone sees the same access limitations and existing damage. Record unanswered questions and issue the answers to all bidders, rather than letting each contractor make a different private assumption.
 
Yes, and define how unknowns become authorized work. You want written pricing and approval before proceeding where feasible, not a running verbal list discovered on an invoice. Ask for labor, materials and schedule impact to be shown separately when a concealed condition is found.
 
One phrase still worries me: “moderate energy upgrades.” Spell out the actual intended work. Otherwise one bidder may include only basic substitutions while another anticipates opening additional areas. Any upgrade touching electrical capacity, walls or windows can also affect the sequence, so it should not remain a general aspiration.
 
Keep two totals in your spreadsheet: the committed construction scope and the cash you need available. The second should include contingency and items outside the contractor proposal. That prevents the $107,400 base budget from being confused with the maximum amount the project might require.
 
If bids come back far apart, don’t average them immediately. First reconcile quantities, allowances, exclusions and assumptions about concealed work. The middle number is not automatically the most complete proposal.
 
Since the building is older, ask what signs would trigger structural investigation during demolition and who has authority to pause work. “No structural extension” only describes the planned design; it does not answer how existing framing or subfloor damage would be handled if uncovered.
 
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