SUMMARY OF NEW HOME BUILDER AND RENOVATOR EDUCATION AND TRAINING PROGRAMS:

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SUMMARY OF NEW HOME BUILDER AND RENOVATOR

EDUCATION AND TRAINING PROGRAMS:

PROGRESS REPORT ON

PROJECT TO DEVELOP A NATIONAL DESIGNATION FOR

NEW HOME BUILDERS AND RENOVATORS

Prepared for

Canadian Home Builders’ Association

Prepared by

Holmen Enterprises Ltd.

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INTRODUCTION ... 1

BRITISH COLUMBIA COURSE REVIEWS... 2

SUMMARY OF CHBA-BC’S COURSE: FINANCIAL MANAGEMENT ... 3

SUMMARY OF CHBA-BC’S COURSE: SALES AND MARKETING... 7

SUMMARY OF CHBA-BC’S COURSE: SALES AND MARKETING FOR RENOVATORS... 11

SUMMARY OF CHBA-BC’S COURSE: CONSTRUCTION LAW... 13

SUMMARY OF CHBA-BC’S COURSE: PROJECT MANAGEMENT ... 19

SUMMARY OF CHBA-BC’S COURSE: INTRODUCTION TO THE BC BUILDING CODE ... 27

SUMMARY OF CHBA-BC’S COURSE: BUILDING TECHNOLOGIES FOR THE NEW MILLENNIUM ... 30

SUMMARY OF CHBA-BC’S COURSE: BUILDING ENVELOPE SOLUTIONS THEORY AND PRACTICE (BEST PRACTICE) ... 35

ALBERTA COURSE REVIEWS ... 40

SUMMARY OF PHBIA COURSE: BASIC BUSINESS LAW ... 41

SUMMARY OF PHBIA COURSE: BUILDING CODES AND STANDARDS ... 50

SUMMARY OF PHBIA COURSE: BUSINESS PRINCIPLES FOR THE BUSINESS OF HOME BUILDING... 53

SUMMARY OF COURSE: COMMUNICATION AND NEGOTIATION FOR THE HOME BUILDER ... 57

SUMMARY OF PHBIA COURSE: ESTIMATING FOR RESIDENTIAL BUILDERS... 60

SUMMARY OF PHBIA COURSE: FINANCE AND ACCOUNTING... 66

SUMMARY OF PHBIA COURSE: MOISTURE CONTROL TECHNICIAN ... 70

SUMMARY OF PHBIA COURSE: NEW HOME MARKETING ... 74

SUMMARY OF PHBIA COURSE: SERVICE EXCELLENCE... 78

SUMMARY OF PHBIA COURSE: BLUEPRINT READING ... 83

SUMMARY OF PHBIA COURSE: BUILDING SOLUTIONS ... 85

SUMMARY OF PHBIA COURSE: CONSTRUCTION ADMINISTRATION... 92

SUMMARY OF PHBIA COURSE: CONSTRUCTION FUNDAMENTALS... 97

SUMMARY OF PHBIA COURSE: CONSTRUCTION SUPERVISION ... 104

SUMMARY OF PHBIA COURSE: LAND DEVELOPMENT ... 109

SUMMARY OF PHBIA COURSE: SALES MANAGEMENT... 114

SUMMARY OF PHBIA COURSE: PROFESSIONAL SELLING 1 ... 117

SUMMARY OF PHBIA COURSE: PROFESSIONAL SELLING 2 ... 123

SASKATCHEWAN COURSE REVIEWS... 128

SUMMARY OF SHBA COURSE: BUSINESS MANAGEMENT... 129

SUMMARY OF SHBA COURSE: FINANCE AND BANKING... 133

SUMMARY OF SHBA COURSE: CODE CONSTRUCTION... 138

SUMMARY OF SHBA COURSE: CONSTRUCTION MANAGEMENT... 139

SUMMARY OF SHBA COURSE: SERVICE AND WARRANTY ... 144

SUMMARY OF SHBA COURSE: COSTING AND ESTIMATING ... 148

SUMMARY OF SHBA COURSE: SALES AND MARKETING MANAGEMENT... 152

SUMMARY OF SHBA COURSE: NEW HOME SALES ... 155

MANITOBA COURSE REVIEWS ... 157

SUMMARY OF MHBA COURSE: BUSINESS PLANNING... 158

SUMMARY OF MHBA COURSE: MARKETING AND SALES ... 163

SUMMARY OF MHBA COURSE: FINANCIAL MANAGEMENT... 166

SUMMARY OF MHBA COURSE: BANKING AND BORROWING ... 171

SUMMARY OF MHBA COURSE: MANAGING DESIGN ... 173

SUMMARY OF MHBA COURSE: MANAGING CONSTRUCTION ... 177

SUMMARY OF MHBA COURSE: LAND AND LEGAL ... 183

ATLANTIC HOUSING PROFESSIONAL COURSE REVIEWS ... 186

SUMMARY OF ATLANTIC HOUSING PROFESSIONAL COURSE: BUSINESS PLANNING... 187

SUMMARY OF ATLANTIC HOUSING PROFESSIONAL COURSE: MARKETING AND SALES ... 192

SUMMARY OF ATLANTIC HOUSING PROFESSIONAL COURSE: FINANCIAL MANAGEMENT... 195

SUMMARY OF ATLANTIC HOUSING PROFESSIONAL COURSE: BANKING AND BORROWING ... 200

SUMMARY OF ATLANTIC HOUSING PROFESSIONAL COURSE: MANAGING DESIGN ... 202

SUMMARY OF ATLANTIC HOUSING PROFESSIONAL COURSE: MANAGING CONSTRUCTION ... 206

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SUMMARY OF ATLANTIC HOUSING PROFESSIONAL COURSE: NATIONAL BUILDING CODE – PART 9 223

SUMMARY OF BUILDER SERIES WORKSHOP (SELECTED MODULES) ... 230

SUMMARY OF ENERGY EFFICIENCY RETROFITS COURSE... 234

SUMMARY OF SITE SUPERVISION COURSE... 238

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Overview

This report contains summaries of education and training programs for new home builders and

renovators that have been developed and are delivered by provincial home builder associations (HBAs)

themselves or in cooperation with others.

Purpose of Summaries

The purpose of preparing these summaries is to facilitate an analysis of the content of all programs in

order to identify areas of coverage and depth. The results will help determine recommended areas of

education and depth of coverage in a national designation.

Scope

The main criterion of scope of analysis is the courses delivered in provinces by provincial HBAs for a

provincial designation. In addition, the scope includes other courses that provincial HBA have

recommended and are being delivered.

Each program has been analyzed to explain the topics covered and the depth of coverage, in

accordance with the planned approach for this project.

Some of the course manuals include materials on training methods (how to teach various topics),

work sheets, self-tests, etc. These materials have not been summarized. The summaries refer

only to substantive/technical content.

Organization

The remainder of the report is organized first by province/region and then by program. Each

provincial/regional section begins with an explanation of its contents.

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BRITISH COLUMBIA COURSE REVIEWS

Two designations for individuals are available in British Columbia: Registered Housing Professional

(RHP) and Registered Renovation Professional (RRP). Certification requires individuals to

successfully complete the following courses:

Course Requirements for RHP Certification Course Requirements for RRP Certification Financial Management Same course as for RHP certification

Sales and Marketing Sales and Marketing for Renovators Construction Law Same course as for RHP certification Project Management Same course as for RHP certification BC Building Code - Part 9 - An Introduction Same course as for RHP certification Building Technologies for the New Millennium

The chart shows that seven different courses are offered. Summaries of these courses are presented

below.

In addition, the course “Building Envelope Solutions: Theory and Practice (BEST Practice) has been

summarized. It has been included for several reasons: 1) it is delivered and promoted, 2) it deals with

a topic of growing importance – moisture control, and the trend in some other provinces is to focus on

this topic (that is the reason that moisture control is one of the main areas of education recommended

for consideration for national designation in the proposal for this project).

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Major Topics covered in Course Manual Length (No. of pages)

Source

(page) Details of Coverage

Overview (59 pages) 1.2 _{The objectives of Day 1:}

- Determining profitable types of work.

- Assess your chances of success on a job before bidding it. - Determine monthly break-even volume.

- Understand overhead recovery. - Calculate gross profit and mark-up. - Understand pricing sensitivity. - Identify different types of budgets. - Understand the principles of budgeting.

- Know how to calculate and interpret working capital. - Understand cash flow principles.

- Manage monthly progress billings. - Know how you can improve profits. - Differentiate between cash and profits. - Understand predatory pricing.

- Complete a budget and bid activity. Identifying profitable

work:

1.2 _{This section is intended to review alternative types of work and identify those that are}

most profitable. The process and criteria are as follows: - Allocate costs (including overhead) and revenues by job type. - Assess profitability in each case.

Details:

- Alternate ways to allocate overhead, e.g., percentage of sales, labour or floor area. - Possible change options to increase profits, e.g., revise selling prices, reduce costs. - Assess implications of change, e.g., cutting overhead costs may add cost elsewhere. Assess chances of

winning a bid.

1.3 _{Indicators/Attributes of Jobs/Prospects}

- Indicators of low gross profit jobs: 1) six or more bidders, 2) customer is a price shopper, job is new to company, etc.

- Indicators of a high gross profit job: 1) few bidders, 2) customer is a value shopper, 3) work is familiar, 4) customer is a repeat, etc.

- Quoting in growing market sectors. Monthly break-even

volume

1.4 _{Break-even analysis:}

- Explanation of concept of break-even analysis. - Explanation of calculation.

Overhead recovery 1.6 _{- Explanation of overhead: costs not associated with jobs, e.g., rent, insurance, etc.}

- Explanation of related concepts: gross profit (sales – direct job costs). - Explanation of need to estimate it and charge for it.

Dual overhead recovery

1.7 _{- Explanation of the need to establish specific overheads for each “department”}

(probably a better expression is element of the job), because they are different. - Guideline: allocate overheads against direct costs.

(Comment: The term, “dual recovery” or its relevance is not explained. Explanation of gross

margin and mark-up

1.9 _{The relative amounts are compared to illustrate a relationship.}

Comment: Examples are provided but not definitions. Profit sensitivity

analysis

1.12 _{This section illustrates the impact of changing various variables on profits, e.g., price,}

sales volume, job costs and overhead. Forecasting /

budgeting

1.20 _{Alternate types of budgets (by item budgeted):}

- Capital budgets: e.g., purchase of buildings, equipment, vehicles, computers - Job cost budgets: Allows comparison of budget and actual costs; also track

productivity during the job.

- Overhead budgets: fixed and variable.

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Source

Working capital 1.23 _{This section provides comments and suggestions about working capital:}

- Explanation of working capital.

- Explanation of working capital turnover.

- Guidelines on working capital turnover: preferred rate (8-12), warnings about high rates, i.e., likely to incur cash flow problems. Comment: Reasons and explanations are not provided.

Cash conversion cycle 1.25 _{1) Cash, 2) inventory, 3) work-in-progress, 4) accounts receivable.}

Explanation of the merits of shortening the cycle.

The cash trap 1.27 _{- Managing cash flow in construction is difficult because costs are incurred at a}

different time than payment

- Overtrading: doing too much with too little.

Improving cash flow: 1.29 _{- Guidelines to improving cash flow: 1) get advance payments, 2) include financing}

costs in the bid, 3) get payment for material delivered, 4) set contract payment terms, 5) estimate cash flow projections, 6) check credit rating of customer, 7) arrange for partial release of holdbacks, 8) set billing procedures.

Monthly progress billings

1.30 _{Guidelines for improving cash flow through monthly billing practices:}

- Minimize the delays between the date equipment is received (relates to payment date) and installed (related to billing date).

- Submit bills before customer’s cut-off date. - Report percentage completions as of billing date. - Avoid delays in billing for changes.

Manage the collection of accounts receivable

1.32 _{Guidelines for managing the collection of accounts receivable:}

- Give it high and persistent priority. - Develop a tough credit policy. - Evaluate customer.

- Use/check accounting information (e.g., to ensure that the customer has not exceeded it credit.

- Establish credit policies and procedures. - Manage holdbacks.

- Calculate and track receivables.

Math exercises 1.39 _{- The following types of exercises are included: calculation of percentages, calculation}

of gross profit, mark-up, rounding, break-even and profit. Answers are provided.

How to improve profits

1.42 _{Guidelines are provided in five steps or categories:}

- Estimating: The estimate must be comprehensive, accurate, etc. - Pre-planning the project.

- Check progress.

- Build to an appropriate standard.

- Profit: The result of implementing the previous steps correctly.

Comment: This appears to relate more to business planning than to financial planning.

Cash or profit 1.45 _{Explanation of the difference between cash and profit.}

Price wars 1.48 _{This section summarizes the negative results of price wars.}

Budget/bid assignment

1.50 _{This section presents an exercise to develop a bid for a job by students.}

Overview (47 pages) Objectives of Day 2

- Identify three types of business entities.

- Understand the nine basic accounting principles.

- Understand the three methods that form the basis of accounting. - Understanding the difference between bookkeeping and accounting.

- Identify the controls that non-accountants can use to control the accounting function. - Understand the primary financial statements: income statement and balance sheet. - Identify the four main groups of ratio analysis: liquidity, activity, solvency and

profitability; understand how to interpret the ratios. - Know why businesses fail.

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Length (No. of pages) Types of business entities

2.1 _{Types and characteristics:}

- Sole proprietorships: General set-up procedures are explained; also liabilities. - Partnerships: Similar to sole-proprietorships; dissolution arrangements recommended. - Limited company: Distinct feature is limited liability; set-up procedures.

Basic accounting principles

2.2 _{- Accepted solution becomes a generally accepted accounting principle.}

- Criteria for measuring a solution: usefulness, objectivity, and feasibility.

- Nine principles: 1) focus on business entity, 2) record items at cost, 3) records kept on an accrual basis, 4) records consistent, 5) measurements in money, 6) business must be a going concern, 7) bookkeeping done on a duality (balancing) basis, 8) based on conservative realism and 9) materiality.

Basis of accounting 2.3 _{- Cash}

- Percentage completion (recommended) - Completed contract

Bookkeeping versus accounting

2.6 _{- Bookkeeping: recording financial transactions.}

- Accounting: preparing income statements and balance sheets from financial records. Bookkeeping controls 2.7 _{- Bank reconciliation}

- Trial balance - Subsidiary ledgers

- Percentages of expenses to sales. Financial statements

(If you don’t manage the finances, you can’t manage the business)

2.8 _{Key statements and indicators:}

- Income statement: The following inclusions are expected: percentages, sales to gross profit, elements of direct cost, overhead.

- Balance sheet: Guidelines are provided on the layout of the balance sheet. - Financial ratios”

- Liquidity ratios: Indicates whether the company can pay its bills on time - Current ratio: Current assets/current liabilities (guide: about 1.5).

- Acid test ratio: (Cash + accounts receivable)/current liabilities (guide about 1.00). - Working capital turnover: Sales/(net current assets); should be 8-12.

- Activity: age of receivables (about 45 days); age of payables (about 45 days) and inventory turnover (about 30 days).

- Solvency: Debt to equity (not over 2); also current debt to equity. - Profitability ratios:

- Gross profit

- Pre-tax profit (at least 5%) - Return on equity (30%). Understanding

financial statements

2.13 _{- Balance sheet: Assets = liabilities + net worth.}

- Comments: Explanation of current and long-term liabilities.

2.16 _{- Income statement: Typical example presented.}

2.19 _{- Test on classifying items into the following categories: assets, liabilities, capital,}

revenue and expense. External accountant

prepared statements

2.20 _{Accountants can prepare financial statements to one of three standards:}

Notice to reader (no verification involved).

Review engagement report (bank balances are verified; some accounts are checked). Audit: most stringent and most likely to detect mistakes.

Interpreting financial statements

2.27 _{This section mentions the income statement and balance sheet but does not explain}

them. It also comments on ratios already reviewed. Some additional ratios are noted: - Leverage ratios, i.e., the same as solvency ratios; also degree of capital asset newness. - Activity ratios: cash conversion period, cash demand period

- Profitability ratio: materials and subcontracts to labour, overhead to sales, overhead to direct cost, overhead to materials, overhead to labour, direct cost to sales, gross profit to sales. Break-even sales, net profit to sales.

Why businesses fail 2.44 _{Although this course is about financial planning, some of the reasons listed are not}

financial. They have therefore been grouped separately. They generally pertain to business planning and/or management.

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Source

Financial reasons:

- Failure of management systems, including financial ones - Lack of financial planning.

- Inadequate capitalization. Non-financial reasons: - Lack of vision and purpose.

- Over-dependence on particular employees - Poor market strategy.

- Lack of market knowledge.

- Failure to establish or communicate company goals. - Absence of performance and quality standards.

- Owner’s concentration on technical issues rather than strategic issues. You don’t plan to fail;

you fail to plan

2.45 _{Business management requires monitoring on an ongoing basis to determine what is}

going right and what is going wrong. The following guidelines are offered: - Prepare an estimate that is reconciled with your accounting system. - Prepare a comprehensive estimate

- Develop a plan for implementing the job. - Monitor the job on an ongoing basis.

Comment: This section also applies to business management.

Down-sizing 2.47 _{- Review the key variables and decide on an option that preserves the business, e.g.,}

prices, volume, overhead.

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Source

Foreword (1 page) The guide provides a solid foundation for a market-oriented approach to the new home-building business. It discusses the principles of marketing and presents practical information on how to implement marketing and sales activity.

Marketing – A Total Approach to

Connecting with Customers (3 pages)

1 _{Key ideas:}

- A market-oriented approach focuses on people (services) – not products.

- Marketing requires focusing on consumer satisfaction, i.e., with the product and the buying experience.

- Builders need to understand the marketplace through market research.

- Marketing is an integral part of business planning. It consists of three interconnected steps: 1) market research, 2) planning, i.e., making decisions about the company’s long-term strategy and short-term goals and developing an action plan, and 3) implementing the plan.

Understanding the Big Picture (5 pages)

5 _{The housing market and home buyers are different than in the past. Key indicators are}

outlined below.

Demographics 5 _{- Builders should recognize that some population segments are decreasing and others}

are growing.

- New market niches are emerging.

Consumer priorities 6 _{- New/emerging consumer priorities include the following: modest expectations of}

Generation Xers, growth in home-based businesses, health, environmental issues, etc. - Design implications of new priorities, e.g., home offices, health housing, etc.

Return to traditional values

7 _{Housing as a good investment.}

Increasing demand for quality, value and service

7 _{Key ideas/suggestions:}

- Know customer expectations.

- Develop and implement a quality assurance system. Communications

revolution

9 _{Key ideas/suggestions:}

- Promote the company on the Internet. - Provide sufficient, relevant information. What Every Builder

Should Know about Today’s New Home Buyers (5 pages)

11

Consumers’ perceptions of the product

11 _{- The text presents some results of consumer research completed in the mid 1990s.}

Some of the results are negative, e.g., quality of construction. Consumers’

perceptions of builders

12 _{- The text presents some results of consumer research completed in the mid-1990s.}

Some results are negative, e.g., builders are not responsive to their needs. - Some consumers believe that the government protects them from poor building

practices. Consumers’

experience as home buyers

13 _{- The text presents some results of consumer research completed in the mid-1990s.}

Some results are negative, e.g., consumers do not appreciate what are called “hidden costs”, buyers do not generally like sales personnel, etc.

Challenges and opportunities

15 _{- Builders should explain the following topics: 1) quality of new homes, 2) construction}

process, 3) the buying process, 4) the financial requirements. (These comments are based on some results of consumer research completed in the mid-1990s.)

Do Your Own Market Research (22 pages)

17 _{Market research is the gathering and evaluation of information related to the sale of a}

product or service to a customer. It should be done before acting. Planning the research 17 _{Key concepts:}

- Types of market research: ongoing and in-depth for major projects. - Options re: who does it: builders and external professional

- Approach: 1) decide information requirements, 2) determine main sources, 3) collect it, 4) evaluate it and 5) use it.

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Source

Collecting the information

20 _{Sources of information:}

- Customer base, i.e., those who bought from the company, those who bought from others, those who have not bought yet. Methods for gathering information are reviewed, e.g., visitor registration form, visitor survey form, customer profile form, home buyers’ survey, focus groups.

- Local municipality: Key types of relevant information are identified (population characteristics, economic conditions/forecasts, housing conditions, supply/demand indicators, etc.). Methods for gathering information are reviewed, e.g., municipal offices, chambers of commerce, real estate companies/boards.

- Competitors: Key types of relevant information are identified (who they are, what they provide, their prices, etc.). Methods for gathering information are reviewed, e.g., shop their model homes, and collect promotional material.

- General trends: This refers to trends in society, e.g., population trends, economic trends, market segmentation, house construction changes, etc. Sources of information are reviewed, e.g., CHBA, CMHC (Market Analysis Centre, CHIC), provincial home warranty programs, Statistics Canada, bank manager, sub-trades and supplies, home shows, magazines and newspapers, etc.

Evaluating the results 35 _{Topics to examine: 1) target market, 2) products and services, 3) price, 4) promotion, 5)}

the sales environment/methods and 6) follow-up actions (after-sales service, utilizing work-of-mouth recommendations from buyers).

Taking action 37 _{Market research provides guidance in deciding on changes. However, a builder must}

understand the consequences of changes before making them. Develop your Market

Position (4 pages)

39 _{- A company’s position reflects a long-term business strategy.}

- A company should focus.

- A position has two attributes: product and commitment to customers (how business is done). It is based on the following: 1) the market, 2) the competition, 3) company attributes (strengths and weaknesses).

- A company should have a mission statement to provide focus/guidance/rationale. Prepare your

Marketing Plan (6 pages)

43 _{- Explanation: A marketing plan is a written statement that describes a company’s target}

market and the products, services, promotion and sales environment (approach) to be used to sell to that market.

- Elements of a marketing plan: 1) target, 2) product, 3) price, 4) cost by component, 5) positioning, 6) promotion and 7) sales environment (approach).

- Benefits of a marketing plan: (many are listed and explained).

- Elements of a marketing budget: 1) market research, 2) promotion, 3) advertising, 4) sales approach (e.g., personal selling, model homes, sales tools), 5) product and service delivery (e.g., mortgage buy-downs, bonuses).

Communicating with Customers (6 pages)

49 _{Communication efforts should have two goals: 1) to reach prospective home buyers and}

2) sell them on the company, its services and products.

Three major factors 49 _{- Motivating prospective buyers to contact the company (to create selling opportunities).}

- Sales environment: Includes personal selling, physical environment and sales tools. - Follow-up: Customer service.

Communication approach

50 _{- Develop the company’s identity: The company must be distinct and stand for}

something.

- Send consistent messages from all company members, i.e., owner, receptionist, crew, electronic messages.

- Set short and long-term communication goals (each has different rationales). - Select prudent/helpful messages (avoid clichés and platitudes)

- Keep promises.

Promotion (19 pages) 55 _{- Explanation: Promotion involves materials and activities to present a company.}

- Promotion goals: 1) be distinct, 2) deliver clear messages, 3) promote benefits, and 4) be professional and consistent.

- Elements to establish a company “look”/appearance: 1) logo, 2) business card, 3) stationary and 4) company brochure/literature.

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Length (No. of pages)

Print advertising 59 _{- Options: 1) daily and weekly newspapers, 2) home buyers’ guides, 3) special events}

publications, 4) other.

- Factors to consider: 1) cost, 2) content, 3) design and 4) placement. Guidelines are provided.

Radio and television advertising

62 _{- Use of radio advertising: reinforces other advertising.}

- Guidelines for radio ads.

- Guidelines for the use of TV advertising Direct mail

campaigns

63 _{- Benefits of direct mail campaigns, e.g., targeting opportunities, low cost.}

- Guidelines on direct mail campaigns, focusing on 1) appropriate occasions for use, 2) target audience, print materials, distribution methods.

Signage 65 _{- Purpose: supports other forms of promotion}

- Placement guidelines: easy to see and catch the attention of passers-by. - Readability guidelines:

Home shows 67 _{Guidelines on promotional items to include in home shows, e.g., brochure, past projects.}

Internet 67 _{- This is a growing medium for promotion.}

- Guidelines on how to establish a web site are provided.

Public relations 69 _{- Explanation: Public relations are the promotion of a company and its products through}

means other than paid advertising.

- Goal of public relations: to generate publicity.

- Some public relations activity: 1) participate in community activities, 2) develop a relationship with your local media and 3) become involved with CHBA.

CHBA 71 _{- Participate in cooperative marketing events, e.g., New Homes Month, Parade of}

Homes, home tours.

- Participate in research and demonstration projects. The Sales

Environment (26 pages)

75 _{Elements of the sales environment:}

- Personal selling:

- The place of sale, e.g., model home, sales centre, office, customer’s home, etc. - Sales tools: all tools to support communication, e.g., floor plans, purchase agreement. Personal selling 77 _{Four personal selling options are explained and assessed:}

- The builder as salesperson

- A real estate company (regulations about disclosure and business relationships are discussed).

- In house sales staff. - New home specialists.

Sales process 86 _{The process is explained in five steps:}

- Greeting: Create trust and support

- Qualifying: Focus on customer readiness, finances and needs and wants - Demonstrating: Build confidence, provide information and learn more about the

customer’s needs and wants. Focus on benefits and values

- Objections: Acknowledge and respond. Focus on quality – not price. - Closing.

The place of sale 89 _{Alternative places are reviewed:}

- Model home: Benefits and guidelines for setting up the home are provided, e.g., furnishings, labelling, etc.

- Sales centre: The purposes are 1) to provide an area to meet customers, 2) to inform customers and 3) to set the stage for selling. Guidelines for setting up a sales centre are provided.

- Spec of pre-sold homes: Guidelines for setting up a spec home are provided. Suggestions on using pre-sold homes are provided, e.g., hold an open-house during construction.

- General guidelines on using open houses: These include timing guidelines, promotional support guidelines, e.g., prepare flyers, prepare mailing lists, erect signage.

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Source

Sales tools 96 _{Sales tools are numerous and have been organized by function:}

- Tools to promote the builder/company: e.g., brochures, photos, testimonials, credentials, awards, memberships

- Tools to promote the homes: e.g., maps of community amenities, plans, specifications, price lists, samples of finishing materials.

- Tools to explain the buying process: e.g., consumer publications, promotional material from financial institutions.

- Tools at the sales desk: e.g., site plan, schedule of availability, and list of closing costs. - General: Electronic tools, such as computer-generated views of a house.

Seeing the Sale Through (8 pages)

101 _{- After the sale, the goals are to make the process from the commitment to purchase to}

move-in are pleasant and satisfying

- Guidelines for achieving these goals are listed: stay in touch, work with customers during construction and act promptly on requests.

Explaining and implementing next steps

101 _{- Legal issues: e.g., requirements of the sales agreement, closing details.}

- Construction issues: e.g., selections, site visits, cut-off dates for changes, new home orientation and move-in arrangements.

New Home orientation

103 _{- This stage should focus on explaining features and operational requirements, e.g.,}

operation of mechanical systems, maintenance requirements and warranties. - Guideline: Provide an information package, e.g., homeowner’s manual. - Guideline: Explain potential problems in advance, e.g., nail pops. On moving day 105 _{- Guideline: Check that all systems are working}

- Guideline: Provide clean, safe access to the house.

Keep in touch 106 _{- Guideline: Maintain periodic contact in addition to service calls.}

- Guideline: Carry out surveys re: service and house. - Guideline: Seek testimonials and references. Respond quickly to

problems

106 _{Home purchases are major financial and emotional investments. Problems with a house}

– even minor ones - may seem very serious to homeowners. That is one reason to respond quickly – to avoid a small problem from becoming big.

Follow-up with Non-Buyers (1 page)

109 _{This section offers guidelines on how to follow-up with non-buyers, i.e., prospective}

buyers, e.g., call them, include them in mail-outs, inquire about obstacles and question non-buyers who bought elsewhere about their reasons for being non-buyers.

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The manual for this course is the National Renovators’ Business Course manual, Module C,

Marketing. The course also refers to material in a CMHC publication, Renovator’s Business Guide

(referenced as “RBG”) and it is referenced where the material is relevant.

Source

Module C: Marketing (24 pages)

C-4 _{This module focuses on market position, identifying market segments, strategy for}

referral business and after sales service as part of the marketing plan, and the need to monitor the business plan and adjust it if the market shifts.

Positioning the business

C-5 _{The need for position:}

- A business position allows a business to stand out from the competition.

- Good positioning of a business allows the renovator to 1) optimize efforts in sales, 2) maximize business sales efforts in areas where it has the greatest strengths and/or profit.

C-6 _{Explanation of positioning:}

- Positioning means finding a distinctive niche in the market and promoting that distinction to the company’s target market.

- A business’s position is reflected in it literature, people, site work and products. Market assessment C-7 _{Assessing a company’s market position:}

- Business plans must be based on realistic assessments of the company’s position by the marketplace and industry.

- The assessment should take into account the following internal factors: 1) financial status, 2) sales and marketing history, staff complement and capabilities, and operating performance and procedures.

- The assessment must include an appraisal of external factors: 1) the existing marketplace, 2) your competition and 3) trends likely to affect the industry. - Market assessments can be performed without a significant expenditure using

available resources.

C-8 _{- Strategic planning (to move from a company’s current position to a desired position).}

- Steps in the strategic planning process: 1) determine vision, 2) develop specific goals, 3) assess current position, 4) identify specific objectives (short and long-term), 5) develop a monitoring plan and process and 6) develop a client referral plan.

C-9 _{Comments about market research:}

- Explanation: Market research is the gathering of al the information that you need to know before selecting a target market, product and marketing approach.

- Rationale: Market research reduces risk through knowledge of supply and demand in the marketplace.

- Approach: Market research requires identification of sources, establishing a system (of information gathering) and evaluation of the information on a regular basis. - Cost: Free or inexpensive market research data and information is available from a

variety of sources.

- Sources: Customers and competitors are good sources of market information.

C-12 _{Developing a business position – key tasks:}

- Describe the product/service being offered. - Identify the target market the business will meet.

- Clarify benefits resulting from customers purchasing the companies products/services

- Assess the competition and determine how to be seen first in customers’ minds. - Assess various strategies and marketing tools for communicating the company’s

business position. Targeting C-14 _{Comments about targeting:}

- Rationale: Unless a renovation business targets its products/services to a specific segment of the market, market forces will control the destiny of the business.

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for, and the specific benefits that the target will receive from the company’s products and services.

- Value: Leading renovators can offer the right product/service to the market and get their asking price without having to compete with most other renovators.

C-16 _{Targeting guidelines:}

- Effective targeting will maximize exposure of the product/service to the target audience and minimize exposure to undesired markets.

- Effective targeting will direct promotional activities to the intended specific markets. - The narrower the target, the greater the likelihood of selling the benefits of the

company’s products/services at the desired price.

C-17 _{Targeting implications:}

- Financial: cost of reaching the target market, cost of sales and effect on cash flow. - Human resource: ensure availability of adequate knowledge and skills to carry out

targeting efforts.

- Operations: ensure adequate resources to respond to leads and deliver on promises. After-Sales Service C-19 _{Implications of poor customer service:}

- Lost referrals and damage the company’s reputation.

- Resolving problems with customers required an assessment of the impact of the proposed solution on al aspects of the business.

C-20 _{Causes of poor after-sales service:}

- Lack of commitment on the part of the owner and the staff. - Unrealistic scheduling/work plans.

- Inadequate customer communications in relation to when work should be done. - Inability to work with suppliers and sub-contractors.

- Initial sub-standard work that is not corrected.

C-21 _{Developing an after-sales service plan:}

- Companies must formalize their after-sales service plan.

- An effective after-sales service program can be seen as a component of the business’s marketing efforts.

Monitoring the business

C-22 _{Value of following the marketplace:}

- Customers respond to situations around them and they change. - Watching market trends helps to identify trends.

- Market awareness helps a renovator make marketing and staffing changes.

- Keeping up to date and in touch with customers will increase business if the work is good. Personal company business plan – marketing section C-24 Template, p12, C-24

This is a learn-by-doing section of the module. The expectations are to produce a marketing component of the business plan.

- It has the following components of the marketing section of a business plan: 1) market definition, 2) market segment, 3) marketing, 4) sales positioning, 5) pricing, 6) competition, 7) monitoring of sales and marketing.

- Identifies components: 1) need for a business position, 2) good understanding of the company’s business position, 3) understanding of methods for obtaining market research information, 4) understanding of methods for targeting their market, 5) a defined after-sales service and 6) a market monitoring program.

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Preface - Some important definitions are explained to clarify the text. Also the appeal system is explained. Glossary of terms Chapter 1: Introduction to Contracts (23 pages) Definition of a contract

1 _{- The main requirements/elements for a contract are 1) two pr more parties with}

capacity to enter into an agreement, 2) an intention to create legal relations, 3) certainty as to subject matter and 4) be in an enforceable form.

- Each of these requirements is discussed in detail in the following sections. Elements of a

contract: Parties

1 _{Relevant issues:}

- Capacity to contract: The capacity of various entities to enter into a contract is reviewed

- Agency: The practice of business and governments to use representatives to enter into contracts is explained

- Privity: This refers to a relation between two parties that is recognized in law (this explanation is not provided in the text). From page 100: the principles of privity of contract have no application in negligence

Elements of a contract: intention to create legal relations

6 _{- The learning objective is to identify the test for whether the parties intend to create}

legal relations. The test is whether the behaviour of the party or parties would induce a reasonable person to be legally bound.

Elements of a contract: certainty as to subject matter

6 _{The learning objective is that for a contract to exist, the parties agree to the same thing.}

Elements of a contract: enforceable form

7 _{Relevant issues:}

- Offer and acceptance: This is a basic condition of a contract.

- Consideration: For a contract to be valid, there must be consideration. It must be present or future – not past.

- Contract in writing: Some contracts must be in writing, i.e., contracts for the sale of land, contracts of guarantee, contracts not performed within one year.

- Public policy: Contracts should be in accordance with public policy. Circumstances where

a contract can be avoided

11 _{The following conditions apply:}

- Mistake of fact: This means that there was no meeting of the minds.

- Misrepresentation: This could be fraudulent, negligent or innocent misrepresentation. - Duress, e.g., threat of physical violence.

- Undue influence.

- Unconscionable, e.g., taking advantage of the mentally challenged, inebriated people, etc.

Terms of a contract that impact on performance obligations

14 _{The following conditions are reviewed:}

- Condition precedent: Obligations are dependent on an event. - Condition subsequent: Contract is terminated by en event. - Substantial completion: This could be a condition of payment. - Performance prevented by opposite party.

- Reasonable performance in good faith - Time for performance

- Failure of consideration

- Interest (must be stated in annual terms). - Performance under protest

Breach of contract 17 _{The following situations are reviewed:}

- General obligations of the owner - General obligations of the contractor

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Remedies for breach of contract

18 _{The following concepts are reviewed:}

- Damages, i.e., return the innocent party to the same position that he/she would have been in had the contract been properly performed. Various types of damages and related concepts are explained, i.e., diminution in value, cost of performance, loss of opportunity, loss of profits, loss of rent, loss of deposits, penalties, liquidated damages, limitation and exclusion clauses, mitigation, betterment, quantum meruit. - Specific performance: This refers to compelling the defaulting party to perform

specific actions.

- Assignment: This refers to transferring the benefits or burdens from one of the contracting parties to another.

Chapter 2: Construction Contracts (12 pages) 24 Types of building contracts

24 _{Three are listed: 1) spec home contract, 2) custom home contract and 3) general}

contract. This chapter focuses on the first two types. Contracts with

subcontractors

24 _{This section reviews the following:}

- Subcontract: a contract between the main contractor and another contractor

- Relationship between the owner and subcontractor: none, except for provisions of the Builders’ Lien Act.

Specifications 27 _{Specifications are normally part of the building contract and describe 1) quality (and}

sometimes quantity) of materials, 2) quality of workmanship, 3) assembly and 4) location.

Method of payment 27 _{- The following bases of payment are explained: 1) lump sum contract, 2) unit price}

contract, 3) cost plus contract and 4) combination. Payment 29 _{The following patterns of payment are explained:}

- Progress payment - Final payment

- Holdbacks: Three kinds are mentioned: 1) holdbacks pursuant to the Builders’ Lien Act, 2) holdbacks for uncompleted work or seasonal deficiencies and 3) holdbacks for defective work and materials.

Extras 31 _{The following topics are discussed:}

- Explanation: Extras are additional work outside the contract. - Payment for extras: Only if authorized.

Death of a contractor 32 _{The personal representative usually has the right to complete the contract.}

Arbitration 33 _{This section explains the following topics:}

- Explanation of arbitration: Settlement of disputes by referring the matter to an independent person.

- Review by courts is possible in some circumstances. - Steps in the arbitration process.

Mediation 34 _{- Mediation is a dispute resolution process in which a third party seeks to help the}

parties in dispute reach a resolution by agreement. No party is compelled to reach agreement.

Chapter 3: Tendering Issues (11 pages)

36 _{- Tenders are a type of contract, and contract laws apply. There is a distinction between}

bid contracts (between the owner and all bidders) and the contract between the owner and successful bidder.

Bid contract 36 _{- A contract exists at the moment the tender is submitted.}

Main contract 38 _{- Once a bid is accepted, the bidder is obliged to enter into a formal construction}

contract. Privilege clause in

tendering

39 _{- This refers to the right of the owner to reject the lowest bid.}

Estoppel in tendering 42 _{- Estoppel means the principle that a person cannot deny the truth or understanding of a}

previous statement. Independent duties of

care

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Length (No. of pages) Chapter 4: Other Common Contracts Used by Builders (8 pages) 47

Bonds 47 _{Bonds are generally a contract under seal to pay a sum of money upon the happening of}

an event: There are three types of bonds of explained: bid bond, performance bonds and payment bonds.

Contracts with third party warranty providers

49 _{The nature of contracts between builders and warranty providers is explained.}

Contracts with lending institutions

50 _{The following types of contracts are explained: 1) mortgage (various types are listed),}

2) promissory note, 3) construction loan, 4) floating charge, 5) assignment of book debts, and 6) guarantee.

Contracts with realtors

51 _{- Various contractual arrangements are explained: 1) listing agreements (a contract}

between vendor and realtor), 2) listing realtor/purchasers’ realtor

- Realtor’s disclosure requirements: These are 1) nature of services, 2) who the realtor is acting for and 3) payment arrangements with other parties.

Chapter 5: Insurance Law Issues (2 pages)

55 _{This chapter cites cases to reach conclusions about coverage provided by insurance}

companies, i.e., an insurer might have an obligation of defend a builder even though the coverage extends only to a portion of the claim, and to establish coverage there must be a possibility of coverage. Chapter 6: BC Land Registry System (6 pages) 58 BC land registry system

58 _{This section explains key features of the land registry system in BC:}

- Governed by the Land Title Act

- Based on the Torrens System (raises an indefeasible title good against the world). - The BC land registration system is explained.

New home

construction and land conveyancing system in BC

59 _{This section explains the following topics:}

- The concerns to a builder if transfer of title to the owner occurs where the owner has not paid the entire purchase price, and if the owner has physical possession of the property before payment or completion of construction.

- The concerns of an owner to ensure that it will not be exposed to builders’ lien claims. Closing procedure 60 _{- The steps involved in transferring land from the developer to the purchaser, and the}

payment procedures are explained.

The holdback 61 _{The conditions to ensure payment are explained.}

Adjustments 62 _{The criterion for making adjustments is explained, i.e., the date of possession. The}

affected cost items are identified. Chapter 7:

Warranties (3 pages)

64 _{The following topics are discussed:}

- Difference between breach of conditions and breach of warranty. - Two types of warranties: implied warranties and express warranties. Chapter 8:

Homeowner Protection Act (32 pages)

67 _{The Homeowner Protection Act (HPO) made the following changes:}

- Established the Homeowner Protection Office - Mandated the licensing of all residential builders

- Required third party warranty protection, except for owner-builders - Established the reconstruction fund.

Barrett Commission 68 _{- The recommendations of the Commission are outlined recommended the creation of}

the Homeowner Protection Act to 1) implement mandatory, third party warranty, 2) regulate and license the residential construction industry, 3) undertake research and disseminate information, 4) provide access to dispute resolution for issues concerning residential construction and 5) establish a reconstruction fund.

Homeowner Protection Office

68 _{- This section explains the purposes of the Homeowner Protection Act and roles of key}

officers, i.e., the CEO, the Registrar and the Director of Research and Education. Licensing 70 _{The following topics are discussed:}

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type and tenure are explained, i.e., hotels, dormitories, care facilities and floating homes; rental buildings under a single title and strata titled if sale is restricted as specified. Other licensing requirements are identified: i.e., details of residential subcontractors and renovators, and compulsory certification occupations. - License features: valid period, transfer restrictions.

- Conditions for obtaining a license: 12 conditions are noted, including the requirement to be accepted by a warrantor. Application and renewal fees are also noted.

- Refusal, cancellation or suspension of a license: Conditions for these actions to occur and procedures by the registrar are outlined.

Mandatory warranties 75 _{Coverage by type of builder: new home construction other than owner-built housing.}

Consumer protection: Warranty coverage requirements are explained. Statutory protection is explained.

Impact of warranty coverage requirements on the Insurance Act is explained. Warrantors are governed by the Insurance Act.

A new home is defined under the Act to ensure intended warranty coverage. Regulations on the

role of home warranty insurance providers

80 _{Distinctions are made between the following:}

- Acceptance of builders for home warranty insurance coverage. - Approval of new homes for warranty coverage.

Warrantors are authorized to make inquiries about the applicant and their projects. They may also set conditions for warranty coverage.

Regulations on mandatory terms of home warranty

82 _{- Mandatory procedures re: assessing claims, disputes, transfer of coverage.}

- Minimum standards: two year warranty on labour and materials, five year warranty on the building envelope, 10 year warranty on structural defects, and living out

allowance.

- Commencement of warranty coverage.

- Other permitted warranty terms and exclusions; also terms not permitted. - Limits on warranty coverage

- Other warranty issues: maintenance requirements (by owner), warranty expiry dates, owner’s obligations and mitigation of damages.

Reconstruction program

89 _{- Explanation: Funding for reconstruction due to past defects in certain areas.}

- Funding the reconstruction program: $750 per multiple building unit. - Failure to pay: The consequences are explained.

- Payments from the Program: Various purposes of payments are explained, e.g., repayment of loans, cost of administration.

Owner builders 92 _{- Exemptions: They need not be licensed but they must provide specified protection.}

- Definition of owner builder: A key provision is the limit of building not less than every 18 months.

- Disclosure requirements: refers to disclosing owner builder status and warranty coverage.

Building envelope licensing

93 _{- Requirements for licensing apply since October 2000.}

- Exemptions from licensing requirements are listed.

Miscellaneous 94 _{- Building permitting process: Conditions for issuing a permit vis-à-vis licensing are}

explained.

- Offences and penalties for them are explained. Chapter 9: Builder

Liability in Tort (15 pages)

99 _{- Explanation of tort law: Refers to action brought against a defendant by a person who}

has been harmed, even though the wrongdoer has no specified duty to the harmed. Criminal charges are brought against an accused by the state. Torts can be intentional (e.g., fraud) or unintentional (e.g., negligence).

Liability in negligence versus liability in contract

99 _{- Principles of damages in contract law are explained, i.e., recovery of damages from}

the breach; return the wronged party to a position he or she would be in if the contract had been duly performed.

- Tort liability does not depend on the existence of contractual relations (the principles of privity of contract have no application in negligence). The principle of damages for negligence is to put the plaintiff in a position that he or she would have been in had the negligence not occurred, i.e., the economic loss caused by the negligence.

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Length (No. of pages)

Concurrent liability 100 _{In some circumstances, a person can be sued in both contract and tort for the same}

wrongful act. Requirements for a

claim in negligence

101 _{Four elements must be established: 1) a duty of care must exist, 2) failure to comply}

with the duty, 3) the homeowner suffered damages and 4) the damages were reasonably foreseeable.

New developments re: law of negligence

103 _{Building contractors and others can be held liable in tort to subsequent purchasers for}

latent defects that endanger health and safety. Builders can use some techniques to limit liability.

Limitation issues in action on construction deficiencies

106 _{- The Limitation Act places time limits on the right to begin a lawsuit. The deadline}

depends on 1) the type of dispute and 2) the date of discovery of the deficiency. - Type of dispute: 2 years for damages in respect of injury to person or property; 6 years

for other types.

- Postponement to date of discoverability. Negligent

misrepresentation

108 _{- Explanation: This occurs when people act to their detriment on the statement of}

someone to whom they have reason to rely.

- To establish a claim for negligent misrepresentation, a reliance relationship must exist. Such a relationship depends on the following factors: 1) skill of the advisor, 2) skill of the advisee, 3) nature of occasion, 4) request, 5) inaccurate and negligent statement and reliance

Owner liability for negligence

111 _{An owner is generally not responsible for the negligence of a builder.}

Chapter 10: Trespass (1 page)

114 _{Trespass is an actionable tort without proof of damages. There must be direct}

interference with the property in question. Chapter 11: Statutory

Liabilities of Builders (8 pages)

115 _{- Summary: Builders can incur liabilities under laws of tort, laws of contract and}

licensing and warranty provisions.

- They also have legal responsibilities to the environment and to workers. Environmental

liability

115 _{- Sources of environmental liability: 1) statutory requirements (e.g., Waste Management}

Act and Fisheries Act), 2) contract obligations and 3) tort obligations.

- Liability for contaminated site: This is governed by the Waste Management Act which is designed to identify contaminated sites, impose liability for remediation and ensure remediation. Owners and developers could be liable for expensive remediation orders.

- Joint, several absolute and retroactive liability: These terms are explained.

- Obligations of vendor to disclose: Where a vendor knows or should have known that a site was used for industrial or commercial purposes, it must submit a site profile. With increasing frequency, transactions involving the sale of commercial or industrial land are often conditional on the property meeting certain environmental standards. Workers

Compensation Act

120 _{- Key functions: 1) enforcement and promotion of health and safety, and 2) provision of}

disability benefits.

- A builder should take the following steps: 1) require subcontractors to carry their own coverage, 2) check with the assessment department of WCB to ensure that a

subcontractor is in good standing and 3) check with the WCB before releasing holdbacks to the subcontractor.

Chapter 12: Builders Lien (25 pages) 123 Introduction: three legal concepts underlying the Builders Lien Act

123 _{- Concept of lien: A lien is a charge (a legal claim against) real or personal property for}

the satisfaction of some debt or duty. The person who files a lien has a right against the person who owes him money and the property that he has helped improve. - Holdback: Money not paid until a certain event has occurred. This is a measure to

give a builder an incentive to pay its workers and suppliers. There are percentage and time limits on holdbacks, i.e., statutory holdback.

- Trust: Property interest held by one person for the benefit of another. The Builders Lien Act: It is based on the three legal concepts and provides and following rights: 1) lien right, 2) holdback defence and 3) trust claim.

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workers. Details of who may not file a claim are explained. Filing a lien 127 _{Key factors are explained:}

- 45-day limitation period (starting as defined).

- Multiple triggering events: Lien claimants must determine the right trigger.

- Certificate of completion: This is issued by the payment certifier and may trigger the start of a limitation period.

- Common mistakes: 1) Lien is not filed against a correctly defined piece of property and 2) the claimant is not defined correctly.

Amount of the lien claim

129 _{- Minimum amount: $200.}

- Amount cannot be changed after filing. - Claims for damages and interest are not proper. - Claims must be provable and not fraudulent Removing a claim of

lien

130 _{Removing a claim can be due to one of four reasons: 1) payment of the amount to court,}

2) payment of security into court, 3) lapse of time (as defined) and 4) determination by court.

Holdback 132 _{- Lien claimants can normally recover up to an amount equal to the statutory holdback}

for that contract.

- Multiple holdback system: Holdbacks apply between contracting parties. The amount is the greater of 10% of the value of work and materials or 10% of each progress payment.

- Recovery under the multiple holdback system is explained.

- Holdbacks by mortgage lenders and purchasers to maintain holdbacks: Mortgage lenders may retain the holdback in place of the owner. Purchasers may require discharge of a lien or adjust the price.

Holdback account 136 _{Separate holdback accounts must be established for each contract.}

Release of holdbacks 137 _{- Holdback period (general): 55 days after a certificate of completion has been issued or}

other conditions where the contract is not governed by a certificate of completion. - Effect of release of holdback: payees are entitled to receive the applicable portion - Use of holdback to remedy deficiencies: This is prohibited.

- Claims against the holdback: This is possible. Therefore an owner or builder should check not only the title and also the relevant court registries.

Trust provisions 141 _{- Trust funds: Money received by a contractor or subcontractor on account of a contact}

constitutes a trust for the benefit of those involved in the project. If the funds are diverted, the contractor is in breach of its statutory trust obligations.

- Trust action: A claimant must prove that he is a beneficiary as indicated by the Lien Act and that he remains unpaid.

Enforcement of liens 143 _{- A lienholder must go to court to enforce his lien. The time limit is one year; the}

claimant must also submit to the land titles office a certificate of pending litigation. - Action against the land: Claimants can seek court-ordered sale of the land or

improvement or the material supplied.

- Disclosure information. Requirements are outlined. - Assignment of lien rights: This is allowed.

- Material on site: Materials and supplies may not be removed from a site because they have not been paid.

- Distribution of money upon enforcement of claims: The rules/criteria are outlined.

Course length: 20 hours of home study, including responses to self-test questions. Then one day of

classroom time, as follows: 3.5 hours of lectures focusing on weaknesses identified in the self-test

responses; exam held in the afternoon.

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Chapter 1: The Superintendent’s Job (16 pages)

1 _{- Overview: This manual is written for the superintendent.}

- Job responsibilities of superintendents vary: in large companies they report to project managers; in small companies, they may also be project managers and owners. - The superintendent has a critical role in determining project cost and therefore overall

profit.

- The superintendent’s main performance criteria are to complete a project 1) on time, 2) on budget and in compliance with accepted quality standards.

Superintendent’s role 2 _{- It varies with size of the company and job, i.e., it may be limited to managing one}

large job or part of one. It may be the entire phase of construction (in a number of jobs).

Superintendent’s authority

3 _{- It varies with company size and type, job scope and experience; also management}

style / philosophy. Superintendent as the

company’s agent

3 _{- This section discusses a superintendent’s role, e.g., represent the company, meets its}

goals, hire and fire employees, schedule sub-contactors Superintendent’s

duties

4 _{- A job description is recommended. A sample list of duties is provided (this is}

somewhat repetitive with previous statements. Superintendent as

leader

4 _{- Leadership is the ability to get things done through others, while winning their respect,}

loyalty and cooperation.

- Various leadership styles are labelled and discussed: dictatorial, bureaucratic, democratic, orchestration.

Superintendent as manager

7 _{- Performance is measured by what others do. The main message is that}

superintendents should have management training. - Guidelines to good management are discussed:

- Planning: Identifying tasks to do. - Organizing: Who does what when. - Directing:

- Controlling: This includes control of materials, labour, and waste prevention and costs. Reports should be timely but not overly bureaucratic

- Accounting and control: Review subcontractor payments based on work and be familiar with lien laws.

Construction activities

10 _{This section discusses the following control systems:}

- Scheduling, e.g., CPM, bar chart

- Staffing: The superintendent has the authority to hire and fire; also training of all site personnel and sub-contractors.

- Estimating: The superintendent is not responsible for estimating but must adhere to it. Chapter 2: Project

Start-Up (25 pages)

17 _{Overview: The superintendent is responsible for project management and control.}

Starting off right 17 _{This requires planning and scheduling.}

Pre-construction 18 _{Factors to be controlled:}

- Key personnel to be used.

- Planning project implementation with them. - Site conditions

- Project and site logistics: arranging for utilities, physical layout of the site (storage sheds, fabrication area, field office), surface water control.

- Schedules:

- Regulations: Be aware of them; also ensure compliance

- Defining subcontractor responsibilities: This involves the following - Pre-bid procedures: Clarify scope of work

- Bid review and selection

- Understanding of construction documents and contracts, including work, price, timing, delivery, payment options, liens, liquidated damages, bidding mistakes, termination, change orders, contract interpretation, changed conditions, submittals,

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owner responsibilities.

- Other: resource for site personnel and sub-contractors

Pre-construction meetings: The purpose is to clarify responsibilities of all parties, clarify communications, lines of authority and procedures re: schedules, acceptance of work, inspections, change orders, safety, payment and disputes. The meeting must be well planned and run, e.g., establish ground rules; have and agenda and stick to it; identify key issues, etc.

Construction 27 _{- Reports and documents: Establish a balance between no reporting and excessive}

reporting. Job reporting is useful for informing company management, of project status at any given time, establishing projections for future activities and job control. Reports should be accurate, timely and objective.

- Types of reports:

- Daily reports serve four purposes: record activities, document instructions, provide back up for additional charges, and dispute resolution. A list of possible inclusions is provided.

- Progress reports serve the following purposes: communicate project status to management, summarize daily reports, summarize instructions, summarize progress and facilitate coordination. A sample is provided.

- Safety: This is a key part of project planning and control. The superintendent is primarily responsible for ensuring that workers have a safe and healthy place to work. This is governed by legislation. Related materials and issues: WCB rules: Appendix 1, Workplace Hazardous Materials Information System (WHMIS) (Appendix 1), liability problems of non-compliance with safety rules and corporate image of poor safety record.

Chapter 3: Quality Control and

Inspections (19 pages)

42 _{Of the superintendent’s three primary responsibilities, quality control will have the}

greatest impact on long-term success. Quality control depends on 1) recognizing performance standards, 2) judging compliance with them and 3) establishing procedures to ensure that they are met.

Responsibility for quality control

42 _{All members of a building team have a responsibility for quality control.}

Creating an atmosphere of high quality

43 _{- A company that emphasizes high quality inspires excellent workmanship.}

- Performance standards are basis of a quality control system, and should be in writing (precise, understandable and measurable).

- Training is important to achieving quality control. This applies to employees and subcontractors.

- Enforcing standards: Each member has a role but the superintendent is in the best position.

Inspections 44 _{- Internal inspections should be timely and can avoid the risk of shoddy and expensive}

work.

- Inspections can be aided by checklists. These checklists should consider problems in the past, are difficult to repair later and are important to customers. Examples of checklists are provided, e.g., inspection checklists for footings, foundations, prior to backfill, framing, insulation, before painting, and final

- Pinspections can prevent rejection by an external inspector, eliminate the cost of re-inspection, and maintain a company’s reputation as a high quality builder.

- Critical inspections: These are listed (they are similar to the stages of checklists). - Logging inspections: Internal and external inspections should be logged, i.e., critical

information reported.

- Final inspection: It should be conducted by the supervisor of the super. Identifying items here will reduce customer complaints.

- Customer walk-through and orientation: If the work is done properly, this can be a pleasant experience. Some builders invite contractors to participate and explain systems, which increase owners’ understanding of their responsibility.

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Length (No. of pages) Chapter 4: Budget Control (13 pages)

61 _{Overview: A budget should be established before work is started.}

Establishing the budget

61 _{- Budget categories: They can be trade or function based. Another criterion is to group}

together those tasks that occur roughly at the same time. This allows a comparison of the budget and cost of an item quickly.

Material control 62 _{This section discusses seven activities to control materials:}

- Value engineering and planning: The concept of optimum-value engineering is explained, i.e., getting the same or more with less materials and cost using cost-effective construction techniques. It is based on four steps: 1) gather information, 2) identify alternatives, 3) assess alternatives and 4) select the best one.

- Completing specifications: This allows builders to proceed efficiently. Allowances should be set fairly to avoid surprises

- Ensuring accurate contracts: This can avoid disputes.

- Purchasing: Effective purchasing ensures the right materials are provided. Also, avoid delivery just before weekends to reduce theft.

- Scheduling deliveries: This ensures that the materials arrive on time. A site designation should be attached, the materials should be placed were desired and stacked in order of use. Deliveries should be inspected for accuracy and damage. - Storage and care: Guidelines for the proper storage and care of materials are provided. - Avoiding material waste and misuse: Care in ordering materials and reviewing their

installation can reduce waste.

Labour control 70 _{The position taken is that the greater use of subcontractors does not allow much control}

of labour (i.e., direct labour). However, techniques to increase productivity can help keep costs down.

Chapter 5: Schedule Control (13 pages)

74 _{Overview: Effective scheduling is the ke}