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Protect your building project with strong contracts

| Jun 2, 2017 | Real Estate Transactions |

When you hire a contractor for a building project, whether you are remodeling a home or building something from the ground up, there are many ways that each party’s expectations may not align with the finished product. In many cases, the project may run off the rails long before reaching completion, leaving one party facing costs or difficulties they did not expect.

It is always important to come to any building project with strong contracts that clearly define the responsibilities of each party and the remedies for various conflicts that might arise.

These contracts should cover many areas that you might not anticipate, especially if you are not familiar with the building process. Establishing a practical timeline for project completion or phase completion is crucial, as well as the payment schedule for certain elements of the project. In some cases, it is reasonable to build in certain penalties for one party or another failing to meet expectations or properly issuing payment in a timely manner. These kinds of clauses are especially useful if there is a dispute about who is responsible when things deviate from the plan.

You should also make sure that the contract provides a clear understanding of the overall cost of a project, and remedies if the costs begin to balloon and exceed your budget. While some cost fluctuation is to be expected, especially in a large project where unexpected issues will certainly arise, it is always good to plan ahead for the unexpected and make sure that both you and the contractor understand who is responsible for each kind of unexpected cost.

For instance, if you change your mind about some element of the project during construction, it is not typical for the cost of changing the plans to fall on the contractor, whereas a contractor would typically be responsible if he or she does not correctly anticipate the cost of certain materials when delivering an estimate.

With strong contracts, you can more confidently approach any building project without worrying how any potential conflicts will resolve. An experienced attorney can help you create contracts that keep your rights protected while ensuring that each party is treated fairly.

Source: Findlaw, “Ten Things to Think About Before Signing a Construction Contract,” accessed June 02, 2017

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