Whether you are a homeowner, a contractor, subcontractor, material supplier, engineer, developer, bank, insurance company or a business owner, it is important to consider if you need to consult with a lawyer when you enter into a construction contract.
In order to learn more about the role of lawyers in construction contracts, we spoke to Douglas Healy. Healy’s firm, Healy Law Offices represents clients in the industrial and commercial realms and has offices in both Missouri and Arkansas. He has served in the past as a Greene County Prosecutor. He presently works as the general counsel to the Missouri Joint Municipal Electric Utility Commission. Healy is a graduate of the University of Arkansas Law School.
According to Healy, not only do people who are engaged in any form of construction need to consult with lawyers during the construction process, the help of a lawyers will often be needed in every phase of construction.
Purchasing Land
U.S. News and World Report states that lawyers often provide assistance in helping people buy land for their project. The lawyer will prepare the documents that relate to the rights of the funding source as well as the rights of the purchaser.
Taking Bids
Construction lawyers may help in the negotiation process between the principles when they are deciding upon the best method of completing the project. They may draft the request for bids on the project and negotiate the bidding process. If there is a dispute about the bidding process, construction lawyers can protect their client.
The Construction Contract
The lawyer will draw up a contract that will create an agreement between the landowner, the contractor and their subcontractors. This process will likely be negotiated. The construction lawyer draws up agreements about bonds and insurance. These documents ensure that the project will be completed and that people receive compensation if there is any property damage or if people end up being injured.
Project Phase
During ongoing construction, lawyers help ensure that each participant carries out their side of the contract. This may simply entail negotiation or demand letters, or it may entail the lawyer filing a lien or bond claim to ensure payments flow throughout the project.
If Disputes Arise
If there are disputes between the contractor and the property owner, lawyers will know the best form of resolving disputes, whether that is mediation, arbitration or dispute review panels. These disputes can be about the quality or timing of the work, where the responsibility lies in injuries or issues about damages that might arise as the project is being completed.
Healy cites examples of disputes and damages involving construction projects in the news recently. In one tragic accident, a floor of a Hard Rock Cafe in Louisiana fell, killing some construction workers, injuring others and causing damage and loss of income to nearby businesses, as the dangerous and precarious remains of the accident – including a large, dangling crane – kept the entire block around the structure closed for some time.
In another example reported by Business Insider that occurred long after the completion of construction, a building in the San Francisco Bay area, the Millennium Tower, has sunk 18 inches and tilted 14 inches in the past 11 years. In September of the previous year, the builder agreed to fix the building and compensate the condominium residents who proved that they have suffered financial losses because their residences are selling for far less than expected due to the perceived danger of the problem.
Both of these issues required skilled construction attorneys who were highly competent in the law and how it relates to all aspects of construction, the contract documents and the state statutes governing construction.
Helping Homeowners
According to HouseLogic, construction attorneys are key in helping homeowners who are dealing with fraudulent contractors not living up to their agreements. HouseLogic states that, although you could try to hold the contractor’s feet to the fire on the Better Business Bureau website and give them terrible reviews on Angieslist and Franklinreport.com, you could just end up being sued by the contractor’s lawyer for defamation.
Contract lawyers can help homeowners save money and time in fighting a contractor who has defrauded them or at least broken the contract terms. According to HouseLogic, construction lawyers help their homeowner clients through their extensive knowledge of state statutes. They can also find places in the contract where the language is weak. They may have to defend homeowners from counter lawsuits by contractors that claim their negative online review of the contractor’s work constituted defamation.
Douglas Healy states that all players in construction need to have competent and experienced legal representation. Your construction attorney needs to know the laws and how they apply to contracts, taxes, banking, environmental law, criminal law, international law, real property law, tort law, bond and lien law, insurance law and administrative law. You need a specialist in order to defend yourself and keep the construction process moving smoothly