Building a luxury villa in Ibiza can be a challenging task, especially if you reside in another country and don’t have a project manager.
Many people assume that they can manage the process just like in their home countries, with a trusted architect or builder. While this approach may work, it’s not always a recipe for success.
There are many variables to consider if you want to avoid turning your project into a path of problems. Here are some of them:
- Cultural differences
This is a factor that is often overlooked, yet it can be a source of great frustration and problems. Our clients are usually people from northern Europe, such as Dutch, Belgian, German, British, or Swiss. Beyond the language barrier, which determines a whole reality and how things are expressed, there are other less obvious barriers that contribute to the frustrations in the luxury villa construction process in Ibiza:
- Public administration works differently, from the way you communicate with it to the time required to obtain a license.
- The construction roles are different, and there are stakeholders that do not exist in other countries.
- Building traditions are different, and in Ibiza, they are accentuated by the island’s insular character.
- The work culture is different in southern Europe than in the north; not worse, but different.
- Inadequate Contracts that Fail to Properly Cover the Promoter
Contracts serve as the framework for governance of a project, especially in terms of the relationship between the promoter and the service provider. We have seen many complex projects governed by standard contracts, and sometimes without contracts at all. In Ibiza, it is common to work with a simple acceptance of fees, but fees are just one aspect of the relationship between two parties. There are many other factors to consider.
- Contracts, especially construction contracts, should have a well-defined scope.
- Contracts must clearly stipulate when a relationship begins and ends, and what happens if things do not go according to plan.
- Construction contracts must define monetary retentions that ensure proper completion of the building.
- Customers should always retain the right to provide any materials they choose, under conditions negotiated between the parties.
- Licenses and Legal Status of Buildings
Licenses can be a source of many problems in real estate projects. We have other blog entries on this topic, as it has a big impact on the project’s progress and is often unknown to the client. Similarly, when renovating or rehabilitating existing buildings, the legal status of those buildings can have a huge impact on the project’s future.
Proper management of both licenses and the legal status of existing buildings from the beginning can set the path for success in a real estate project in Ibiza.
- In Ibiza, it is very common for a building to have some part that is not legal, or even the entire building. The project must be approached in one way or another depending on the legal reality of the home that is to be renovated.
- Always conduct due diligence of the asset, both legally and technically. Study not only the legal status of the existing construction or the plot, but also its possibilities for the future.
- Incorrect awarding of construction contracts
When considering problems during the construction phase of a luxury villa in Ibiza, the first issue that comes to mind is a faulty construction process, which often stems from an incorrect awarding of the contract. The construction process for a luxury villa is complex, with many stakeholders, and the builder is one of the most important.
To ensure a successful construction process, it is important to follow these steps:
- Establish a bidding process with accurate and complete measurements, including all phases and work packages.
- Ensure that all construction companies quote for the same scope of work and submit complete bids.
- Conduct a thorough comparative analysis of the bids, with complete offers.
- Ensure that the project is well defined and measured.
- Budget for risks.
- Conduct two rounds of bidding, reducing the number of participants and negotiating in the final round.
- Close the process with a well-defined contract.
- Lack of overall project supervision
Clients who carry out luxury housing projects in Ibiza are mostly absent clients. Not for pleasure, but out of necessity. They reside in other countries and their main responsibilities are far from Ibiza.
For the construction of their luxury villa, they rely on their local team. And their local team is usually either the architect or the construction company they have been recommended. The theory is that if you hire the best, everything should go well.
Our experience tells us that this is not always the case.
- In moments where decisions with impact on the project need to be made, it is important to ensure that these decisions align with the main objectives of the project and the client’s expectations.
- When decisions fall on partial members of the project, these decisions tend to be in their own interest, rather than in the interest of the project or the client.
- These problems can be greatly mitigated with proper monitoring not only of the cost and time of the project, but also by ensuring that the project scope is met with the quality set and desired by the client.
- Ensure that someone is your eyes and ears throughout the entire project process and that they are independent from all other parties, so that they only represent the client.
- Carry out an appropriate snagging process
After putting in so much effort to build your luxury villa in Ibiza, the last month before completion is not the time to slack off or rush to finish.
Unfortunately, it is common in the industry to lower the bar of quality and effort at the end. This is perhaps the worst mistake of all because the last thing we did is what everyone remembers. During the last month of touch-ups and snagging lists, any oversights can be resolved. These oversights will ultimately shape the client’s experience of their luxury villa.
In Ibiza, this process is particularly important because we are often marked by special moments in the calendar such as summer, Easter, or Christmas. Historically, this process has not been carried out correctly in Ibiza. However, the calendar is not an excuse. The process of touch-ups must be properly planned and executed as many times as necessary to achieve the planned quality.
- Though it may seem so, the house is not yet ready for occupancy. In a luxury villa, the touch-up process is especially crucial.
- Keep in mind that the builder is obligated to carry out these touch-ups as many times as needed until the work is delivered according to the established quality standards.
- Failure to do so entitles the client to make use of any retentions that were made throughout the construction.
- It’s important to define the acceptance criteria for the work in advance, particularly when working with quality standards that are higher than those stipulated by construction regulations.
- Not hiring a Project Manager until it’s too late
Although we are capable of it, we prefer not to have to do rescue management.
In general, it is better for the client to hire a luxury housing specialized project manager as soon as possible. Not only will they act as your eyes and ears throughout the process, but that’s only one part of their job and not necessarily the one that adds the most value to the project.
At Norden Management, we want to be involved in the project from the very beginning because:
- We conduct a project value audit to determine if the project is adding the expected value for a project of this caliber. If it isn’t, we highlight the points we believe should be modified because they don’t add enough value. The know-how required in the luxury villa field is high and is based on the value added to the project.
- We plan the project from the outset so that we can give the client a timeframe on which to make decisions.
- We evaluate the risks inherent to the project and define the best future strategy with the aim of mitigating or eliminating those risks.
- We lead the team, always respecting each member’s field of knowledge and authority, but ensuring that all members are aligned with the main project objectives above partial interests.
- We document all processes and provide data and information to the client so that they can make informed decisions.
If you want to know more about us,
mail us at info@nordenmanagement.com
or look at us at www.nordenmanagement.com
We the North
