Saturday, September 04, 2010

Why You Need a Contract with your Subcontractors-Now More Than Ever

Most of the general contractors I know have been working with their subcontractors for years.  Business has always been done on a handshake and things have mostly worked well that way.  However, thanks to the EPA Renovation, Repair and Painting Rule, times have now changed.  Although no one can contract away liability in terms of compliance with the Environmental Protection Agency, both contractors and subcontractors will not want to be held responsible for each other's work.

General contractors need to have contracts with subcontractors with a very clear scope of the work to define exactly what falls within the subcontractor's purview.  If the subcontractor is going to be disturbing enough lead paint so the RRP Rule kicks in, the GC will want to make sure that the sub signs an indemnification clause stating that he will defend and indemnify (pay back) the GC for any claim against the GC for damages due to the subcontractor's work, including the cost of hiring an attorney.

The general contractor will also want to make payment to the subcontractor contingent upon receipt of the subcontractor's documentation of the lead-safe practices and once the cleaning verification has been satisfied.

Finally, general contractors should seriously consider whether they are willing to hire subcontractors who have not gotten their Certified Renovator certificate.  If the sub is not certified, then the GC is responsible for on the job training and supervision of the work that disturbs lead paint.  In that event the GC is incurring possible liability and may be considered an employer, which invokes a whole other host of problems including being required to file taxes for the sub as an employee, etc.

So, now is the time to change your work practices and have signed contracts with your subcontractors.  I can help with that.