Contingency is owner-controlled money for uncertainty—not a substitute for missing line items or an automatic contractor fee.
Separate known scope from uncertainty
Price visible, defined work in the base budget. Use contingency for conditions that cannot reasonably be confirmed before demolition, such as concealed damage, obsolete wiring, or unexpected substrate repair.
If a known appliance, permit, or finish is omitted, adding a contingency does not make the budget complete.
Match reserve to project risk
Cosmetic work in a recently documented home may carry less uncertainty than major layout changes in an older building. Age, previous alterations, structural changes, long-lead selections, and incomplete drawings increase risk.
Control how it is spent
Require written change descriptions, price, schedule impact, and approval before work proceeds except for immediate safety stabilization. Track committed and remaining contingency separately from the contract base.
Sources & further reading
References behind this guide
These sources support safety, measurement, or industry context. Product instructions, approved plans, and local requirements control your project.