2023 in review – a year of project management on the Costa del Sol

At the beginning of a new year, it is always good to reflect on the year that has just passed, as well as look forward to what is on the cards for the year ahead. We asked our CEO and Project Manager Mark Lawson to look back and give us a summary of what happened and highlight any changes or changes he’d seen. Over to you Mark!

“2023 has been a year of conflict resolution, crisis management and project rescue. We have been called in by many clients who needed our help to overcome conflicts with their architects, builders, funders and suppliers. Sadly, they have been suffering the effects of spiralling costs and delays, which has adversely affected their quality of life, as well as causing issues with providing the product to their buyers. When they have contacted us, they’ve been feeling adrift and frustrated with the whole process and needing outside and objective help to resolve the issues and start moving forward again.

There has been a significant increase in these conflicts, delays and budgetary issues over 2023. Reasons for this vary from project to project, but there are clear trends fuelling these problems across the board, such as lack of overall strategy and planning, price constraints caused by inflation, as well as changes in specs due to shortages and stock issues caused by COVID. Other issues which we have seen a lot of over the past 12 months have been incorrect documentation and contracts being agreed and signed, activities and deliverables being unsupervised and undelivered and a general lack of attention to detail and failure to properly assess what is being actually delivered.

This has made it a challenging year, as, whilst we enjoy sorting stuff out, coming in and firefighting after things have gone wrong, it is intense and results are hard won. It is better for the client and for us to get involved with the project in the early stages and stop things from going wrong, or catch them before any issues occur.

Here are just a few instances of where we’ve been called in for project rescue on the Costa del Sol in 2023.

Ruinous infrastructure works- delays, poor quality and overcharging, with no controls being put into place

We were called by a big international developer to review why infrastructure works covering almost 500,000m2 were substantially delayed and over budget. We found that the construction company executing the works was also determining what works were required as they saw fit, charging at rates and units that favoured them, and ignoring the rates and limits contracted. In this case, there were basically no controls whatsoever. To hide the fact that the budget was nearing 80% over contract, they issued falsified reports and calculations.

Twin Villas chaos- project indefinition and constructor extras

We were called in by a Foreign Developer to investigate why his villas were well above budget- with extended delays. Like many others, this developer was reliant on his architect and technical architect to manage the process in his favour. But unfortunately for him, there were a number of negatives in the mix. Firstly, the architect had not spent much time defining the details in his design project – leaving many construction items out of his plans- including the vitally important MEP & Aircon systems. This anomalous situation had then been transferred by the technical architect into his Bills of Quantities- meaning that these omissions did not appear anywhere in the technical documentation. They had selected a “friendly constructor”- without bidding the works out to ensure a competitive price and signed an “open contract” with him. This contract meant that any items additional to the design package could be charged for as “extras” and unfortunately this included the hugely expensive MEP Project, which was roughly 35% of the total costs. This loose handed process meant that the developer could not sell his villas at a price to make a profit.

It became clear that in the initial planning stage, the whole business case had been poorly defined by individuals who had no local experience of development in Spain. Plus, those contracted to have a “duty of professional care”- did not ultimately care and were not representing the developer’s best interests. Unfortunately, the numbers did not add up, and the developer was left with a product that was not financially viable.

Stalled villa project – contractor doubles the price and threatens to abandon the site

Our client called us to intervene in a stalled Villa project that was suffering excess demands from the builder and was six months late. On review we discovered that the builder had been nominated directly to the work by the selling estate agent and had been paid a forwards payment amounting to 30,000€ to cover supposed “purchase of materials”. They had not agreed to any repayment of this, nor had the “materials” materialised. At this point the builder insisted on a 60% increase to the contracted price and threatened to leave the site if this was not paid.

We ran a covert and alternative bidding process to establish a true comparable – and whilst this indeed indicated that due to inflation there had been a 10% increase in some items – it did not justify the patent profiteering attempt by a builder who had signed a fixed price contract. So, we ejected this problematic builder from the site and contracted another more realistic builder. We then assisted our client to formulate a legal case to regain the amount paid and the damages caused for breach of contract.

Golf Villa Scam & extended delivery dates

We were contacted by an Estate Agent who were engaged with a part time refurbishment operator attending to a wholesale extension and complete refurb to a substantial villa. Their client- soon to become ours- was incensed at an ongoing delivery delay surpassing six months and a wilful cheapening of the agreed spec – a process he called “a Scam”.

After a thorough analysis, we could only but wholeheartedly agree with him! The extension was illegal, the villa qualities were being cheapened without his acceptance, there had been omissions on damp coursing and sound insulation measures, typical of a quality construction and the Mechanical, Electrical, Plumbing and Aircon systems had been installed without any spec or plans – so would not work correctly. Having informed the client of our serious concerns, he decided to continue with the purchase but insist on a reduction in price due to these clear failures and non-compliance with the purchase contract. This meant that we had to integrate with the Client’s legal team and identify all the failures and omissions and place values on them to justify his position.

Developer bit off more than he could chew

We were called by this potential client, whose tales of woe were lengthy. He admitted that he had bit off more than he could chew – even though he was involved in the development of 10 projects and was a well-known brand. The owner of this company had finally lost confidence in his own team who he claimed “have never delivered one project on budget nor on time and are plagued with poor quality issues”. Things were so bad that he felt he was going to suffer a heart attack soon. He went on to say “what we need is a decent project manager”- and begged us to take over the process and exonerate him from his baying clients. However, he then attempted to tie us into a “profit share” having already told us he was “losing money” as a substitute for our minimal fees, and further attempted to lock us out of our existing assignments for other Clients. This was not acceptable to us- so we left him to deal with his issues. If ever there was an example of how better to do things and structure your technical department- this was it!

Defects and urbanistic issues highlighted prior to purchase

We were called by some renowned lawyers on behalf of a client who wished to purchase a relatively new multi-million Euro villa in an exclusive area of Marbella, but wanted a better understanding of the innards and true status of the villa prior to purchase. We performed a technical due diligence to all of the installations and also assisted the lawyers with a review of the Urbanistic compliances. We found some issues that we communicated to the potential buyer. Despite these issues, the client was happy to proceed and bought the property, happy in the knowledge that he was fully appraised of the true status and felt comfortable with the situation to proceed with the investment.

Developer assistance to sell an asset and ensure compliance with development targets and profitability.

We had been working as the project managers for a Swedish entity designing and producing a project of distinction- a gated community of 12 Nordic styled villas, when it was decided to place the opportunity on the market. This project is designed, planned, costed and legalised, “ready to fly” as it were. It is unique because all the urbanistic, land segregations and infrastructure requirements have been resolved by us, and any new Investor can literally get started imminently- with none of the typical impediments.

Our role in the disposal of this asset is to assist any new potential investor to evaluate the true realisable benefits of the opportunity. To do this we liaise with the selling agents to provide the technical due diligence, and offer security to those investment vehicles who have not developed here before. We are on hand to ensure that the correct story is told, the correct figures banked on, and the most realistic timescale is observed – thus avoiding many of the above-mentioned errors and mistakes and saving our client time and money through the process! This is being undertaken as a post contract service to our previous client. We will of course also be available to assist the new buyer with whatever development services he may need to ensure he gains the profit projected- as a minimum!”

The value of our experience

As these examples show, a lot can go wrong during a complex building project and price increases, inflation and lack of supply caused further issues to clients in 2023. We’re happy to go in and undertake project rescue, but we know that our clients have gone through a lot of pain, stress and financial pressure by the time they call us in.

That is why we suggest that developers and those people who are building a luxury villa in Spain, get a Project Manager in from the outset. Project Planning and overall Strategy being agreed is key to the viability of what can be a lengthy process ahead.

An independent project manager can aid in the planning stage to ensure the project is financially viable in the case of a developer, and that in the case of an end user that a client can afford it. We can support clients to choose the right professionals and that any contracts they sign protects them from future problems. We can help them to get their licenses as quickly as possible and ensure that everything is moving forward in the best way to help them hit their deadlines, or finish even earlier than planned. Plus, we can be an expert eye, surveying everything that is going on during the project, making sure everything is being done correctly and pushing all the suppliers, contractors and trades to work as efficiently as possible and produce the best quality of product at the end. You- our Client- will be the beneficiary of our expert eye and process, enhancing results and bringing vast peace of mind to you.