When undertaking a new commercial real estate project, one of your most important decisions is who to put in charge. Having someone you trust to oversee everything is critical. That is why you appoint a project manager.
When communicating your needs to your chosen project manager, you need a legal record called a project management agreement. It ensures that both of you understand what you expect of each other. It allows you to hold the project manager accountable when things do not go as planned. On large projects, there may be a project management team. However, one person will still take overall responsibility for ensuring the success of your project.
The three P’s act as a reminder of the things you need to cover in any agreement:
- Project: You must clearly define the boundaries of the project. You need to set your expectations and limits in terms of time, cost and results.
- People: You need to understand the human resources required at every point of the project. There will be all sorts of different workers, employed for varying amounts of time. Failure to get this correct could result in you going over the budget.
- Process: You need to know how things will function on a day to day basis. How will decisions be made, and how will progress be reported to you? How will payments be made, and how will different aspects of the overall project team communicate?
The better defined your commercial real estate project agreement, the less room you leave for disappointment or confusion. Seek legal help to make sure you have covered every aspect.