Friday, September 25, 2009

General Contractors: Beware of Your Subcontractors!

In a certain sense, I hate writing this blog post. It suggests a lack of trust and confidence between parties who are working side by side, and who may have worked together for years. However, in this economy, many are caught by surprise when a business goes awry. There are ways a general contractor can prevent nasty surprises from subcontractors, and vice-versa.

1. Make sure your subcontractors are in good financial shape. You might even want to go as far as doing a credit check on them. You need to know that they can pay their workers, provide proper equipment and have enough manpower to handle the job.

2. Check subcontractors' insurance policies and make sure they are current with high enough limits to protect you. If they have employees, be absolutely sure that they carry worker's compensation insurance.

2. Find out what else they're working on. If subcontractors are over-extended they can cause delays and throw off the whole project.

3. Insist on lien waivers once subs are paid. Nothing is more frustrating than getting a call from an owner who is fuming because a sub has filed a mechanic's lien on the property.

4. Consider a "pay when paid" clause in your contract. I'm not necessarily advocating them, but it is difficult to pay subs when the GC has not been paid by the owner.

5. Have a good contract that spells out your agreement with your subcontractors. It is better when the expectations of the parties are clear from the beginning, including methods and materials to be used.

It is unfortunate that one has to be wary when hiring subcontractors, but they reflect upon a general contractor's business reputation. For that reason, it is better to exercise caution.

Saturday, September 19, 2009

Energy, Post-Occupancy and Codes-Where is LEED Going?

This post at the Virginia Real Estate, Land Use & Construction Law Blog raises a number of the issues about LEED that I have been speaking about for a while. Is LEED going to win out, or will other green regulations take precedence? What is going to happen when buildings start getting decertified? What about evaluation of building performance?

Finally, you may ask why I post so much about green construction. The reason is it is not only the wave of the future, it is now. Even the White House is moving towards LEED certification. Builders who ignore developments in green building are keeping their heads in the sand.

Saturday, September 12, 2009

Lienholder Beware:Suing to Enforce a Mechanic's Lien

Scott Wolfe does a fabulous job of keeping up with mechanic's lien issues. In this post, he discusses how easy it is to lose one's ability to enforce a lien by not following the proper steps to perfect it:

Green Roof Fire

This video shows that green roofing responds properly to fire and does not spread to the building itself. My question is, does this affect the viability of the plants if they have to be chosen for resistance to fire? This video came via Chris Cheatham's blog.

Saturday, September 05, 2009

The Importance of Signs at Your Construction Site

I certainly notice when I see one of my client's signs at a site, but it turns out that other people do as well:

Friday, September 04, 2009

Stylish Solar Roof Panels-A New Product

Check out these solar roof panels that look like traditional roofing tiles:

Thursday, September 03, 2009

Why You Need a Contract

I was at a NARI (National Association of the Remodeling Industry) meeting last night and was speaking with a contractor. He said, "I don't even use contracts," and appeared troubled by the notion of doing so. I am sympathetic. I have spoken with so many contractors who reminisce about the days when everything was done on a handshake. Unfortunately, those days are long past. It is possible to view contracts in a positive light, however.

In law, the definition of a contract is a "meeting of the minds." When one considers the meaning behind these words, a written agreement is really a wonderful document. It ensures that the communication between the parties has been clear, and that each has given careful thought to his or her priorities and understanding of the job. Disputes are prevented because possible issues have been anticipated and addressed. A good contract includes so many provisions that are important, such as scope of the work, allowances, payment schedules, warranties, etc. A well-drafted contract also reflects the experience of the drafter who, having faced many projects where problems have arisen, deals with those issues and therefore prevents these occurrences in future jobs.

In remodeling, the law requires that there be a written contract for any job valued at over $1000.00. The requirements for the contract are so strict, and the penalties can be so severe, that it would be foolish for a contractor to write a contract himself or buy one from the internet without being sure that it is complete and accurate. For new construction, a builder or construction company would be wise to ensure that its contracts are well-written. For example, unless builders include that they are entitled to recover their attorney's fees if they pursue a claim against an owner, then the would not be able to recover those costs.

There are so many reasons to have a written contract for any construction project. It does not have to be viewed as a negative, but rather as a memorialization of the agreement between the parties. As an arbitrator I know said, "A good contract is negotiated, drafted and then lies on a shelf and collects dust." At that point, all parties can have confidence that the terms have been agreed upon and that the communication is clear.