Definition:

A rehab cost overrun is when the cost of a renovation project exceeds the initial budget. This can happen for a number of reasons, including:

• Unforeseen expenses: During the course of a renovation, it is not uncommon to discover unforeseen expenses that were not originally budgeted for. These can include things like the cost of repairing damage that was not visible before the renovation began, or the cost of upgrading electrical or plumbing systems that were found to be in poor condition.

• Changes to the scope of work: It is also common for the scope of work to change during the course of a renovation. This can happen for a number of reasons, such as the homeowner deciding to add or remove features, or the contractor discovering that the work is more extensive than originally thought.

• Delays: Delays can also lead to cost overruns. This is because the contractor may have to pay for things like overtime or additional materials if the project takes longer than expected.