Contingency and hidden-condition checks for a 125 m² Melbourne apartment renovation

I

InezMarch

Homeowner
One approach is to reserve heavily before any work starts. The other is to investigate first and keep more cash out of the project. For a first renovation, I can see the logic in both.

The Melbourne apartment is 125 m² and was purchased for A$676,400. I have a preliminary A$197,000 allowance covering the kitchen, bathrooms, floors, painting, electrical assessment and some energy improvements; an extension is not proposed. Decorative items can move to a later stage, but unsafe wiring or active water damage would have to be addressed immediately.

Would you set an initial contingency now, then revise it after moisture, plumbing access and the electrical scope are checked? I also plan to ask contractors to list exclusions for opening and repairing walls, waste, common-area protection and service access. Any approval or permit timing that affects the sequence needs to be identified before the programme is fixed.
 
I’d provisionally keep 15–20% outside the quoted works, but the more important step is making every contractor state assumptions and exclusions. Ask whether the price includes opening and reinstating walls, waste removal, protection of common areas, testing after electrical work, plumbing access and rectification of any moisture damage discovered. Also identify long-lead materials before fixing the programme.
 
How many bathrooms are involved, and will the apartment be vacant during the work? Those two details could change the sequencing significantly. I would also ask where the water isolation points, drains and electrical board are located, and whether contractors need access through common property. A neat room-by-room quote can hide the disruption and cost of reaching services.
 
I wouldn’t choose a contingency percentage yet. A$197,000 may contain firm allowances, vague provisional amounts or both, and applying 20% to the total can create false comfort. First split the scope into known work, selections not yet made and hidden-condition risks. Moisture investigation around bathrooms and the kitchen deserves attention before flooring or painting is scheduled.
 
There’s also a practical order to this: investigate moisture and services first; settle any required approvals and access arrangements; complete electrical and plumbing work; then close walls, waterproof where applicable, install fixed cabinetry and only later do floors and paint. Ask each tenderer for a programme showing dependencies, not just a completion date. Permit or building-management timing should sit separately from material lead times so you can see which delay is actually driving the job.
 
That sequencing point changes my view slightly: even after separating the unknowns, I’d still retain a cash reserve rather than allocating the whole A$197,000. The tender questions should include who pays if access is worse than assumed, what happens when damaged substrate is uncovered, and which reinstatement work is excluded. Get the urgent electrical and water items priced as a distinct first phase; cosmetic cuts then remain possible without interrupting essential work.
 
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