If your project financing includes banking with a commercial real estate lender, chances are your lender will require the services of a bank inspector. The borrower, though, give consideration to partnering in this requirement and hire an independent (third-party) construction consultant as a construction monitor instead. A most important distinction to recognize between a construction monitor serving all parties versus a bank inspector is that the bank inspector reports his findings only to the bank.
The key advantage? Neutrality. A third-party monitor serves all stakeholders – owners, lenders, developers, and investors – providing unbiased oversight that benefits everyone. This impartiality allows for more open, honest discussions about quality, compliance, schedules, and budgets.
As a neutral entity, the monitor can effectively lead owner-architect-contractor meetings, facilitating smoother communication and quicker issue resolution. When conflicts arise, they’re well-positioned to mediate, keeping the project on track and relationships intact.
Their comprehensive involvement yields detailed, objective reports shared with all parties. This transparency ensures everyone has the same information, promoting accountability and informed decision-making. The success of the project itself becomes the central and main goal.
Perhaps most crucially, an independent monitor excels at ensuring fair contract administration. They track weather delays, oversee proper payment procedures, and help resolve design and construction issues promptly. With a deep knowledge of both finance and construction details, an independent construction monitor can significantly reduce the risk of costly post-project disputes.
The typical bank inspector can’t offer the level of services that a construction monitor provides. Their fees are reflective of this as they have to bid in a competitive situation and as a result, must limit their expenses and time to the absolute minimum. A construction monitor, as a rule of thumb, will be more expensive than a bank inspector, however, on an hourly basis and total benefit analysis, the construction monitor is the best value for all.
While the upfront cost may be higher, the long-term value is clear: better risk management, improved project efficiency, and a higher likelihood of completing on time and within budget. For senior living executives focused on maximizing facility value and operational efficiency, an independent construction monitor is an investment worth considering.
About the Author:
Rob Milam is the CEO of zumBrunnen, Inc. He has more than 25 years of diverse experience in the construction industry. Rob has worked in multiple market sectors and in all phases of construction management. During his career, Rob has worked on a broad range of facilities including senior living, residential, multi-family, industrial, office, and healthcare.
