Cost & contract · Glossary
Contingency reserve
Also called: contingency, reserve
A contingency reserve is the budget set aside on top of the contracted construction cost to cover unknowns discovered during the project — rotted framing, outdated wiring, surprise plumbing, scope additions. Industry guidance is 10–20% for cosmetic remodels, 15–25% for full remodels, and 20–30% for additions and ADUs.
Why this matters for renovation projects
Contingency reserve shows up on permits, contracts, or estimates that Renology covers across LA, San Diego, San Francisco, Seattle, Portland, and Denver. Most homeowners encounter the term once a project is already mid-flight, when there is no time to learn its mechanics without slowing the contractor. Knowing what it means before signing the contract is the difference between a clean project and an avoidable surprise. For how Renology calibrates cost ranges against permit valuations and contractor invoices, see the methodology.