The construction industry is complex, with lenders not necessarily having the resources to monitor all technical issues and performance requirements or develop an informed view of cost issues associated with projects. That’s why independent project monitors, who possess that expertise, are needed to minimize a lender’s risk exposure in administering its loan for a given construction project.
However, until now, project monitors in Canada have been operating without uniform market standards that monitors, lenders and borrowers can all follow, with variations often existing in the services monitors offer and no guarantee of consistency. That’s why RICS established a working group to develop project monitoring guidance, with a draft guidance note currently being finalized with the support and input of CIQS, which will be cobranding the document, entitled Project Monitoring for Real Estate Lending: Canada.
“Drawing on our shared expertise and leadership, our goal is to ensure we are on the same page so that lenders can be confident they are receiving a consistent and high standard of project monitoring service from RICS members and other service providers across the industry,” says Naren Chande, who chairs the working group that is developing the guidance and is Senior Executive Vice President for Cost Consulting at Altus Group, a leading provider of independent advisory service, software and data solutions to the global commercial real estate industry.
When the guidance is published, “project monitors will have a common platform that can be used as reference for their work,” says Chande. “This document will act as a definitive resource to help those in the financial services industry better understand what to expect from service providers, and ensure they are asking for the same or similar services.”
“In addition, we’ll now have a document that can be used for training, especially since many consultants currently are offered little or no formal training in project monitoring,” says Clint Kissoon, who chairs the School of Architectural Studies & ADZ School of Construction Management in the Centre for Construction and Engineering Technologies at George Brown College in Toronto. “I think the guidance will formalize the curriculum for project monitoring training in Canada,” adds Kissoon, who serves as technical author for the working group.
A guidance note such as this one provides recommendations for accepted good practice as followed by competent and conscientious practitioners. The final guidance will be published in June 2015.