Hiring the trades yourself on a commercial build-out: when it works and when it backfires

Yes for small cosmetic jobs, rarely for a full finish-out

You can manage a small commercial remodel yourself, especially cosmetic work such as flooring, wall coverings, cabinets and shelving that does not move walls or touch the electrical, mechanical or plumbing systems. A full tenant finish-out, a restaurant or a medical office is different. Once walls, systems, permits and inspections are involved, the owner who hires the trades directly takes on the scheduling, the code risk, the inspections, the insurance questions and the Texas lien and retainage obligations that a general contractor would otherwise carry.

At Harrison Construction we are a general contractor, so you may expect me to say never do it yourself. That is not my answer. Some owners have the time, the experience and a simple enough scope to do it well. What I want you to know is what the contractor's fee actually pays for, so you can decide with your eyes open. The savings are visible on day one. The costs of doing it yourself usually appear in month three.

What a general contractor actually does all day

Most people picture the general contractor as the company that hires the trades and marks up their prices. The hiring is the easy part. The real job is sequencing, coordination and responsibility. Someone has to decide that the plumber trenches the slab before the framer stands walls, that the electrician roughs in before the inspector comes and before the drywall goes up, and that the hood is ordered months before it is needed. When one trade is late, every trade behind it is late too, and someone has to re-sequence the job that afternoon.

On our projects that work includes budget management, scheduling, contractor management, risk management, quality control, safety and project close-out, on top of pre-construction work such as subcontractor qualification and permitting. If you hire the trades yourself, every one of those tasks still has to happen. The only question is whether you are the one doing it.

• Sequencing trades so nobody waits or tears out finished work
• Catching scope gaps between trades before they become extras
• Scheduling and passing inspections in the right order
• Ordering long-lead equipment and materials on time
• Managing job-site safety and the landlord's rules
• Collecting insurance certificates, lien waivers and warranties

Jobs where running it yourself can make sense

Some commercial work really is simple enough for an organized owner. The City of Fort Worth, for example, states that permits are not required for cosmetic remodels such as floor or wall coverings, cabinets, countertops and shelving, or for plumbing fixture replacement. Other cities have their own rules, so check yours, but the principle is common: work that does not change the structure or the building systems carries much less risk.

If your project is mostly paint, flooring, millwork and furniture in a space that already works, and you have time to be on site and make decisions quickly, you may do fine with a few good trade contractors. The same is true for a refresh of an operating business done in phases, where the scope is small and the space stays open.

• New flooring, paint and wall coverings
• Cabinets, countertops, shelving and fixtures in the same locations
• Furniture, decor and signage installed by the vendor
• Replacing plumbing fixtures without moving them
• Small phased refreshes in a space that stays open

Signs the job has outgrown you

The line is usually crossed when the work starts changing the building. Fort Worth's commercial permitting guidance says permits are required for construction that changes, moves or repairs walls, floors, ceilings, windows, doors, or electrical, mechanical or plumbing systems, and that remodels and additions require building, electrical, mechanical and plumbing permits. Once you are there, you need drawings, a permit, licensed trades and a series of inspections that have to happen in the right order. The same page notes that projects with construction costs of $50,000 or more must register with the Texas Department of Licensing and Regulation for accessibility review.

Restaurants and medical offices cross the line almost immediately, because of hoods, grease, plumbing density and health or equipment requirements. A fixed opening date is another signal. If a franchisor, a landlord or a lender is holding you to a calendar, the cost of a mistake is no longer just money. I cover the full approval sequence in the approvals a restaurant build-out needs.

Where owner-run build-outs usually go wrong

The most common problem is the gap between trades. The electrician prices what is on the electrical drawings, the plumber prices the plumbing drawings, and nobody prices the patching, the fire caulking, the blocking inside the wall for a heavy shelf or the cleanup. A general contractor owns those gaps. When the owner hires each trade separately, the gaps become change orders, and each trade can reasonably say it was not in their scope.

The second problem is inspections. A failed rough-in inspection stops the drywall crew, and the drywall crew may have another job lined up and not come back for a while. The third is the owner's own time. Running a build-out well is close to a full-time job, and most owners also have a business to open, staff to hire and suppliers to line up. The money saved on the fee often goes straight into rent paid on a space that opened late.

There is also the question of leverage. A general contractor who gives a trade steady work across many projects gets that trade's attention when something needs fixing quickly. An owner hiring the same electrician once has much less pull, and on a busy week the one-time customer is often the one who waits.

Texas lien and retainage rules then land on you

This is the part most owners do not know about. When you hire trades directly, each one has a contract with you, which makes you the owner dealing directly with several original contractors instead of one. Texas law sets out retainage rules for that relationship. Under Section 53.101 of the Texas Property Code, an owner is required to retain 10 percent of the contract price of the work, or of the value of work done, during the progress of the work and for 30 days after the work under the contract is completed. Those retained funds play a role if a subcontractor or supplier further down the line goes unpaid and makes a claim.

In plain terms, paying everyone in full the day they finish can leave you exposed if one of them did not pay their own suppliers or helpers. This is general information, not legal advice, and lien law has deadlines and notice rules that matter. Before you act as your own general contractor, have a business attorney review your contracts and payment process. At close-out, you will also want lien waivers from everyone you paid, which I describe in what you should have in hand when a build-out is finished.

Insurance, safety and the landlord's rules

Your landlord will almost certainly want insurance certificates from anyone working in the space, often with the landlord named as additional insured, and many centers have rules about working hours, deliveries, roof access and noise. With one general contractor, that is one set of certificates and one person responsible for the rules. With six trades, it is six sets and you enforcing all of them.

Job-site safety is the other half. Someone has to control access, keep exits and fire protection working, manage debris and make sure each crew works safely around the others. If something goes wrong on a site you are managing, the questions about who was responsible get harder to answer. Talk to your insurance agent before work starts about what coverage you need while the space is under construction.

The middle path: a general contractor plus owner-supplied items

There is a reasonable compromise that many of our clients use. The general contractor builds the space and carries the permits, inspections and trade coordination, while the owner buys and manages certain items directly: furniture, the point-of-sale and IT setup, art and decor, sometimes kitchen equipment purchased through a franchisor's program. You keep control of the items where you have expertise or buying power, and the contractor keeps responsibility for the building.

The key is to agree up front on who delivers what, who receives it on site, who installs and connects it, and when it needs to arrive. Owner-supplied items that show up late or without the right connections are a classic source of delay. If you go this route, choose a contractor comfortable with it, and use the questions to ask a commercial contractor before hiring to find one.

If you still want to run it yourself

If your scope is small and you have decided to manage it, set yourself up the way a contractor would. A little structure at the start prevents most of the problems above.

• Get written, itemized proposals that state what each trade excludes
• Make one written schedule showing every trade and inspection
• Confirm with the city which permits you need before anyone starts
• Collect insurance certificates before anyone enters the space
• Hold retainage and collect lien waivers with every payment
• Walk the job every day, and answer trade questions the same day

Talk it through before you decide

If you are not sure which side of the line your project falls on, call us before you hire anyone. We will look at the space and the scope and tell you honestly whether it needs a general contractor. Sometimes the answer is no, and we will say so.

If it does need one, we work across Dallas–Fort Worth and in the other states where we are licensed, and we bring the pre-construction, permitting and construction management that keep the opening date intact. Either way, you will make the decision knowing what each path costs in money, time and risk.

Questions people ask me