Opening a commercial building project in Arizona is a big enterprise that demands smart planning and wisdom. Hiring a general contractor in Phoenix can smooth the way, but business owners unwittingly overlook secret expenses that blow their budgets off course. These unexpected expenses, from permit fees to site preparation concerns, can add up rapidly if not identified up front.

With an understanding of these hidden pitfalls, you can make informed decisions and maintain a smooth-running project. In this article, we analyze five unexpected costs that routinely catch clients off guard when they hire a contractor to do commercial construction and how they can be avoided.

1. Building Permits and Code Compliance Fees

One of the most undervalued commercial building expenses is permitting and compliance costs. In Phoenix, permits are required for nearly all commercial construction, from new construction to remodels.

• Fees vary based on project size, location, and complexity.
• Multi-permit jobs typically consist of several permits, each worth hundreds or thousands of dollars.
• Delays in clearance can extend the duration of construction, which raises labor costs.
• Contractors may charge an extra fee to facilitate the permitting process.

Tip: Request your licensed general contractor to provide a complete breakdown of all permit costs and anticipated timelines upfront at the planning phase.

2. Subcontractor Coordination Overruns

Electrical, plumbing, HVAC, and other specialty work often use subcontractors in commercial projects. Ineffective coordination causes unnecessary costs.

• Idle time when subcontractors are not adequately scheduled adds to labor costs.
• Miscommunication among trades may cause rework or delays.
• Overlapping or precipitous tasks can jeopardize quality.
• Large projects are more exposed to coordination problems.

Tip: Request a specific subcontractor management plan and responsibility process. Choose a Phoenix contractor with robust project management processes to limit overruns.

3. Change Orders and Scope Creep

Change orders are a common source of budget tension. These take place whenever there are changes to plans due to customer requirements, design changes, or unforeseen site issues.

• Each change order contributes to labor, material, and time expenses.
• Reversing layouts or finishes during construction may lead to da elay.
• Unforeseen structural problems typically equate to major additional fees.
• An ambiguous contract increases the risk of constant changes to the scope.

Tip: Work with your contractor to firm up plans before construction starts. Include specific language on the contract regarding price and permission for change orders.

4. Gaps in Construction Warranty Coverage

Not everything is guaranteed. Most contractors impose limitations on coverage, putting business owners at risk of future repair expenses.

• Some warranties do not cover material defects, only workmanship.
• Coverage terms vary and last only one or two years.
• Exclusions can leave you paying for costly repairs.
• Incomplete warranty information can lead to post-completion disputes.

Tip: Request written warranty documents that outline what is covered, how long, and what is excluded. Large commercial jobs are especially required.

5. Unexpected Site Preparation Costs

Site preparation is an important procedure, and it can introduce unexpected costs if not addressed at an early stage.

• Soil remediation, clearing, and grading can introduce large costs.
• Urban sites may have high relocating utilities.
• Drainage issues or foundation adjustments have the tendency to occur late.
• These details are usually not covered in the initial contractor bids.

Tip: Get your contractor to do a thorough site inspection and provide a detailed breakdown of preparation charges before work begins.

Selecting the proper commercial contractor in Phoenix is key to avoiding these unexpected costs and ensuring a successful project. Look for a successful Phoenix construction management contractor who has a reputation for transparency, clear contracts, and proactive communication. 

These questions help you choose a design-build contractor or a Phoenix remodeling contractor who offers value and minimizes surprises in finances. A well-thought-out plan and a good contractor will help you achieve your business-building goals without over-expenditure.