The commercial terms · GMP & Contract Structure
Where the Contingency Lives
A guaranteed maximum price is the standard structure for multifamily, and how it is assembled matters more than the number on the front.
Bring the site, the unit count and the drawings at whatever stage. You get a range, the drivers, and an honest read on the pro forma.
Self-perform
Dewatering, SOE and deep foundations in house
Licensed
General contractor, licensed in the state of Florida
GMP
Open book, with the contingency visible to you
Draws
Documentation your lender can actually process
A buried contingency is a hidden number
If the contingency is distributed into the trade line items rather than shown as a separate line, you cannot see it, cannot track it, and cannot tell whether savings belong to you. A GMP built that way looks competitive at award and behaves quite differently through the job.
The savings split is the clause most often left until later and it is the one most likely to cause difficulty at the end. Agreeing it at award takes five minutes when nobody knows who will benefit; agreeing it at closeout takes considerably longer when both parties can see the number.
What to insist on
- A visible contingency line with a stated drawdown process.
- Open book — actual subcontracts and invoices, not summaries.
- A defined savings split, agreed before award.
- Clear scope for what is inside the guarantee and what is an allowance.
- General conditions itemized rather than a lump.
What open book should actually mean
Access to the actual subcontracts and the actual invoices, not a summary prepared for the owner. The distinction matters because a summary is a representation and the underlying documents are evidence.
Establish before award what you get to see, how often, and whether you can appoint somebody to review it. A contractor comfortable with genuine open book will answer that easily, and the answer tells you what the term means in this contract.
How we handle it
- 01Present the GMP with the contingency as its own visible line.
- 02Open the books — subcontracts and invoices, not just totals.
- 03Agree the savings split in writing before award.
- 04Report contingency drawdown monthly with reasons.
Agree the savings split before award, not after. It is a five-minute conversation at the start and a genuinely bad one at closeout, when both parties have a view about who created the saving.
FAQ
Common questions
- Should contingency be visible?
- Yes. Buried in the trades it cannot be tracked and savings cannot be attributed.
- What does open book actually mean?
- Actual subcontracts and invoices. Ask what you get to see and how often before signing.
- Who keeps the savings?
- Whatever you agree — and agree it before award.
- Is GMP right for multifamily?
- Usually. It gives a ceiling while the design keeps developing.
What we build
Garden Apartments
Two to three story wood frame with surface parking. The cheapest way to build a unit in Florida, and it only works where land is cheap enough to spread out.
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Wrap & Texas Donut
Residential wrapped around a freestanding parking structure. More density than garden without the cost of building over the parking.
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Podium
Concrete parking and ground-floor uses below, wood-framed residential above. The workhorse of urban multifamily, and the typology where Florida ground conditions bite hardest.
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Mid-Rise Concrete
Cast-in-place or precast concrete throughout. More expensive per square foot than wood and often the right answer anyway — particularly near the water.
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Mixed-Use
Ground-floor commercial with residential above. Structurally one building, operationally two, and the complexity lives in the seam between them.
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Adaptive Reuse
Office, hotel or warehouse converted to residential. Occasionally excellent value and frequently more expensive than building new, and the difference is decided by the existing structure.
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More the commercial terms
Lender Draws
Your lender is a stakeholder in the program whether or not anyone treats them as one. A draw that gets rejected costs you a month of carry.
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Contingency
Contingency is not padding and it is not free money. It is a bounded provision for things nobody could reasonably have known, and it should be governed as such.
Read more →
Schedule Risk
On a multifamily deal a month of delay costs carry plus a month of deferred lease-up, and that combination is usually larger than any construction saving anyone negotiated.
Read more →
Next step
Find out what is actually wrong with it.
An inspection, photographs of what we found, and a written scope. If the honest answer is that it can wait another season, that is the answer you will get.
