Construction disputes are harmful to both the property owners and contractors or builders involved in them. However, most construction disputes involve the contractor or builder being the defendant and are especially harmful to these businesses in three main ways. First, if you run a smaller construction business, being forced to go to court may require that you delay or completely stop your current projects. Additionally, construction disputes lead to costly litigation that includes attorney fees and monetary compensation if you lose your case. Finally, even if your case does not require litigation and instead the property owner gives you the chance to remedy the dispute, this takes both time and money that you would have otherwise not had to expend. Below are five common issues that lead to construction disputes and ways to avoid them.
Common Causes of Construction Disputes and How to Avoid Them
Have a Construction Attorney Create or Review Contracts
For many parties in the construction industry, focusing on creating a good construction contract is seen as a distraction. As such, many construction focused companies create a simple and general contract that they can use for each job. This can keep costs low and allow a company to become familiar with the contract. However, using a general contract can lead to costly litigation. Furthermore, this practice opens the door for other parties to take advantage of missing provisions.
One way to avoid potential legal issues while still keeping legal costs low is to decide what types of construction projects your business most commonly partakes in. After narrowing down areas, you hire a lawyer who can draft project-specific contracts. For example, if you are a construction company that most commonly works on residential real estate projects, you could hire a lawyer to create separate contracts for you to use when you are building a property, remolding an existing property, or simply offering advice on how to utilize undeveloped land.
Prepare Realistic Schedules
No matter how many preventative clauses a construction attorney puts into your contract, if you prepare an unrealistic work schedule, legal problems will ensue. Many different contractors or builders work on a single project. Thus, the schedule you give to the property owner or manager will determine not just when your business works, but when other companies complete projects as well. As such, if you give an unrealistic schedule to the property owner, they could bring litigation forth. To avoid issues, take the time before a project begins to map out each project that needs to be completed. Finally, give yourself some leeway on the timeline you create. This allows small issues to occur during the course of the job without completely derailing the entire project.
Install a Clear Scope of Work
When creating a construction contract, you must clearly agree upon the work that is to be done. Additionally, use this clause to discuss what will occur if there are any unforeseen events that occur that prohibit either party from doing what is stated in the contract. When incomplete descriptions of work appear within a contract, builders or contractors may experience confusion. Additionally, one party may simply try to take advantage of you which leads to incomplete or defective work. Consequently, additional problems tend to appear with coordination between multiple contractors. This not only slows progress but can also lead to disputes concerning the quality of the work completed. This occurrence is especially dangerous as issues with the building itself can occur that lead to lower property values.
Only Take Jobs You Know How to Do
Not taking work that you do not know how to do may seem like an obvious tip. However, many businesses in the construction industry jump at the opportunity to work on a well-paying project. However, to get these jobs, companies will sometimes exaggerate their skills. You may be able to get away with learning as you go on certain projects. But if you are working on the structure of a building or other work that is crucial to the longevity of a building, exaggerating your skillset is a bad idea. Not only will you likely take longer to perform the work that you agreed to. However, if issues do occur because of your poor workmanship on the project and the court finds out you lied about your skills, you will likely face massive penalties.
If you do accept a job that has tasks that you cannot handle or easily learn, make sure that you have an independent contractor in place who can take care of this portion of the job. Furthermore, ensure that you list this contractor in the agreement and state exactly what they will be working on.
Document Project Issues as Occur and Report Them as Soon as Possible
In almost every construction project, an issue will occur at some point that requires you to stop working or change your schedule. These issues are harmful whether they require the project to stop or be delayed. Your construction contract should detail the procedures for what happens if an event occurs that is not your fault but still requires you to delay or stop working. If the reason for the delay or stoppage is your fault the procedure is different. If the issue is your fault, document the issue immediately and give an updated project schedule to the property owner. One way to protect yourself from costly litigation is to create a daily report. This report should document the work done and any issues that you are experiencing. Furthermore, the report should include labor on the site, delays incurred, problems encountered, daily work performed, and differing site conditions. By creating this report, you catch problems quickly and show that you tried to remedy the issues.
Final Thoughts
Following these guidelines will help you avoid construction disputes and the costly litigation that follows them. However, there may be certain situations where litigation is inevitable. In cases where you must go to court or participate in a form of alternative dispute resolution, let Atonoplos & Associates help guide you through this process. With over 20 years of experience, Antonoplos & Associates Washington DC construction attorneys can help construction company owners, contractors, subcontractors, material suppliers, architects, and designers with a wide range of services before, during, and after a construction project.
Contact our DC Law Office for More Information
Finally, for more information on tips to prevent construction disputes, contact us at 202-803-5676. You can also directly schedule a consultation with one of our skilled attorneys. Additionally, for general information regarding construction law, check out our blog.