When entering into a construction contract it is important that a property owner take measures to protect themselves from possible issues that may arise. The most common disputes between property owners and contractors stem from miscommunication. It may have to do with the scope of work performed, the cost of the project, or the amount of time for completion. Below are some basic tips which can help property owners avoid common issues:
When receiving bids, make sure you have a full understanding of the scope of work. It is common for property owners to obtain estimates from multiple contractors when deciding who will do the work. Often times the estimates are not entirely “apples to apples” in that they differ in the exact scope of work to be performed. This occurs more often in large projects where a single line item can include a large amount of work. For example, a property owner installing a new roof may see a line item for “roof replacement” with a lump sum that is less than another contractor. However, that line item for roof replacement might not include things like installing an ice and water shield, or removing and replacing the gutters, whereas the other estimate does. As such, it is important to make sure that you understand the full scope of work to be performed from the contract you sign.
Make sure change orders are clearly communicated and in writing. It is very likely, especially when doing restoration work on older homes and buildings, that additional issues will arise which require additional work. This also happens on new remodels when the property owner will tell the contractor to change a design item or make some other alteration to the plans. Sometimes this additional work will have a substantial cost increase. Thus, it is important that when the work is deviating from the original scope or plans that both parties communicate the cost of the change and why the change is necessary. Once this is understood, make sure the change order is placed in writing. This, more than anything else, will help protect a property owner from feeling like the project “got away” from them.
Have a clear (and realistic) understanding of the time the project will take. For many reasons, both good and bad, projects can take longer than anticipated. I often advise property owners to assume that the work will take longer to complete than stated. If you require work to be performed in a certain amount of time this must be communicated with the contractor before the work begins. Further, if you require an accelerated timeline, you should be prepared to pay extra for it. However, if the timeline is reasonable and allows ample time for the contractor to perform the work, you may want to put a completion date in the contract to keep the project on track.
Finally, you can always ask for help! If you are considering taking on a project, especially a large or commercial project, you may want to have an experienced construction attorney help review the contract at the onset of the work. A little extra time and money on the front end can often save time, unforeseen expenses, and headaches on the back end.
-Ross Hussey, Attorney @ Smith Jadin Johnson, PLLC