In the field of construction, the construction project owner is the initiator of a construction project, whether it be a for a house or a building. Most often, he becomes the client of an architect which can also be the project manager who contributes his expertise in the design, directs the construction and ensures the reception of the works. The contracting authority is necessarily the owner or holder of the rights to use a land lot on which the construction will take place.
The construction project owner, or contracting authority, is a natural person (private or professional) or a private legal entity (company or association) or public institution (the State or a local authority) who assumes the financing of the project of house, building or infrastructure, and contracts the services of third parties involved in the design and construction of the house or building.
For smaller projects, such as the construction of houses or small buildings, the initiator of a construction project who is also its owner, is sometimes referred to as the “owner-builder” or “self-builder”. An “owner-builder” or “self-builder” may be engaging in his project for his own use or to resell or rent the completed construction to third parties in order to earn the value-added from the construction.
For public construction projects, in most countries, the public authorities have to proceed according to strictly codified procedures which clearly define the organizations tasks and its relationship with the project manager and entities involved in the construction.
The project owner is the initiator of a construction project
The project owner contracting authority implies:
- ownership or right to use a suitable land lot
- the definition of the purpose and objectives of the building
- a duration for the complete realization of the design, the construction works until the final delivery of the building
- a budget to cover all the costs of the interventions of the companies involved in the construction until the final delivery of the building
As the person in charge of the construction project, the project owner has to contract the services of experts in areas which may exceed its competence, depending on the characteristics of the building considered and the corresponding regulations: technical, legal, financial and internal or external project management.
In some countries, it is a legal obligation to obtain the services of an architect for the design of the plans of any construction project (sometimes from a certain size threshold) who may also serve as a construction project manager.
Delegation of responsibility of the project owner
The contracting authority may also be assisted by a licensed general contractor, who, on his behalf, ensures the direction of all stages of the construction project of a building according to the best practices and in accordance with the local regulations.
The various companies involved in the design, execution and control of the works at the service of the client share or take full responsibility for their area of activity and expertise. They may subcontract or co-work in all or part of the construction works, and may divide the project into separate “lots” for the design, construction works or reception.
For projects of considerable size or complexity, the contracting authority may choose to hire a general contractor, a single person or company who will then be responsible for the entire project on his behalf.
Costs of project ownership
Once completed, the use of a house or building usually involves maintenance charges, which normally weighs upon the owner; he may delegate them to third parties. Depending on the purpose of the building, its use may also require marketing services, various experts’ interventions, controls by independent specialists, etc.
In order to finance his construction project, the owner-builder can call on banks and financial institutions. In some countries, these institutions have a legal obligation to advise him to the extent of their real estate financing expertise; to do so they may have real estate services or contract the services of specialists.