2013 is shaping up to be the year of the bulldozer. Construction is up in the U.S. for new single-family homes, and building permits are on the rise. This February, builders in the U.S. started work on more houses and apartments and obtained permits for future construction at a faster pace than we’ve seen since June 2008, according to an article in the Star Tribune from the Associated Press.
As the housing market recovers, legal disputes over construction will grow, too. According to the National Academics Press, approximately one in four projects in the construction industry has a claim. These often expensive disagreements can lead to workers filing mechanic’s liens against a homeowner, which can be very costly and even lead to foreclosure.
Before the bulldozers hit the site, make sure you take precautions in order to prevent construction disputes and mechanic’s liens. Whether you are a construction worker or a homeowner-to-be, contracts, communication, and records are key to ensuring that the process goes smoothly and meets the expectations of everyone involved.
- A written contract assigns responsibilities, outlines expectations, and legally binds parties. Contractors and homeowners should put everything in writing in order to prevent misunderstandings in the future. Homeowners should clearly describe and delineate everything they expect to be done in the construction job. Contractors should ensure that they understand all of the expectations.
- The more clearly the contract is written (and easily understood), the smoother the project should progress. Also, if a construction dispute does arise, referring back to a well-written, well-drafted contract will help the judge and lawyers involved to understand the situation.
- As construction begins, make sure the contract is being followed. Even if the builder and the homeowner have a friendly relationship, ensure that procedures and expectations are met so that the relationship will not sour by unexpected disputes.
- Regular communication between the workers and the homeowner will give confidence to both that things are progressing in the expected time frame, and if changes have to be made to the original contract, this can be discussed and approved by both.
- The head contractor of a project should keep detailed records of the project from start to finish. It is often recommended that contractors take photographs and date them to show progress, as well as video footage of the project. They should also record notes from meetings, correspondence, drawings, site diaries from everyone involved in the project, information about subcontractors, information about deliveries, and cost information. These records can help protect the builders legally and provide reference should any disputes arise.
Taking steps to create a smooth construction experience for everyone is a good place to begin and will hopefully help you avoid any real estate lawsuits.
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