Construction Management & Inspections

During construction the developer (owner) manages cost, schedule, quality, and risk.

Cost & payment

• Schedule of values breaks the contract into line items.
• Monthly pay applications (often AIA G702/G703) request payment for work in place.
• Retainage (commonly 5–10%) is withheld until completion to ensure the job finishes.
• Lien waivers are collected with each payment to protect against mechanic's liens.

Schedule & quality

• Track the critical path; manage delays and change orders.
• Inspections — the building department inspects at milestones (footings, framing, MEP rough-in, final). Third-party special inspections (concrete, steel, soils) may be required.

Risk

• Maintain insurance and safety (OSHA) compliance.
• Document everything: RFIs, submittals, change orders, daily reports — your paper trail in any dispute.

Going Deeper (Intermediate)

During construction the developer (or their CM/owner's rep) manages budget, schedule, quality, and draws, and coordinates required inspections — both agency and lender. The job is to keep the project on time, on budget, and compliant.

Advanced / Pro-Level

The developer's role is risk and money management, not field labor:

• Manage the GC, change orders, RFIs, and the critical-path schedule.
• Lender draw inspections and the owner's contingency for surprises.
• Agency inspections at hold points (grading, utilities, building) and special inspections (structural, etc.).
• Track budget vs. actual and cost-to-complete; manage the horizontal-to-vertical handoff and phasing.
• The developer protects the equity by catching cost/schedule problems early through these controls — not by swinging hammers.

Practice Challenge

On a development deal, what is the developer's primary job during construction if not doing the building work? (Answer: managing risk, money, schedule, and compliance — overseeing the GC, change orders, draws, cost-to-complete, and required agency/lender inspections so the project stays on budget, on time, and approved; the developer protects the equity by controlling the project, not by building it.)

In Practice

A dispute arises and the owner has no documentation to back their position. Daily reports, RFIs, and photos are your protection.

Common Mistakes to Avoid

• Poor documentation
• Not managing change orders
• Missing required inspections

Takeaway: Document everything and manage change orders — your paper trail protects your profit.

Educational content — not legal, engineering, or financial advice. Requirements vary by jurisdiction; always confirm with the local authority and your professional team.