Litigation-I Win, You Lose vs. Mediation-Win/Win

Image
  Litigation is a zero-sum game.  It destroys relationships and fosters enmity between the parties.  Parties rarely walk away happy.  Even if they win, the expense of litigation is enormous, and collecting on judgments is difficult. Disputes ultimately resolve, but the focus on winning at any cost can lead to prolonged legal battles.  Living with a lawsuit causes ongoing stress, which can distract you from your business and even have an effect on your health. In a courtroom, the final decision lies with a judge or jury who may not fully grasp the complexities of the case. Parties relinquish control over the outcome, potentially leaving them dissatisfied with the final judgment. Mediation has the opposite effect.   Rather than polarizing people, it enables the parties to attack the issues and not each other.     The process promotes open communication, collaboration and problem-solving, which enables parties to actively participate in crafting ...

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.

Popular posts from this blog

Eligibility Requirements for the LEED Green Associate Exam from Green Building Education and Training

What are the eligibility requirements for the LEED Green Associate exam? http://www.green-buildings.com/content/78626-what-are-eligibility-requirements-leed-green-associate-exam After March 31st, 2009, candidates for the LEED Green Associate (GA) credentials must fulfill eligibility requirements. LEED Green Associate candidates are required to do ONE (1) of the following: Option 1: You must be (or have previously been) employed in a sustainable field of work This is perhaps one of the more nebulous requirements posed by the GBCI, because no definition of a "sustainable field of work" is given. The USGBC does state that the company needs to "relate to environmentalism or the green building industry". If you are in any doubt that your profession would qualify, contact the GBCI at gbci.org or by calling 1-800-795-1746. Option 2: You must be (or have been) involved in a LEED Certification Project To prove eligibility by way of LEED project involvement, you must have bee...
Read more

When the Homeowner is a Bully

I've seen a new trend in contractor disputes lately, and it isn't pretty.  Some homeowners are making unreasonable demands on contractors, and bullying them into doing work without getting paid.  They unreasonably withhold payments, or impose penalties for delays that they cause.  They expect contractors to do all kinds of extra work without being paid or changing the completion date. I have had a series of these recently.  What is a contractor to do? When first meeting with a homeowner, trust your instincts.  If you are sensing red flags, do not take the job. Never let the work get ahead of the money.  If there is a change order, make sure that the payment is contemporaneous with the work. Make sure that all change orders are in writing and reflect any change in the contract price and date of substantial completion. Include a provision in your contract that entitles you to get attorney's fees if you have to go after a client for payment. Make sure t...
Read more

Should a Contractor Have the Homeowner Test for Lead?

I would like to learn more about the advisability of lead testing.  Homeowners might not want their homes tested for lead, because it becomes public record, and may interfere with the sale of a home or the ability to obtain a mortgage or homeowners insurance.  In addition, I strongly advise contractors not to do the testing themselves.  Let the homeowner pay an independent company to do it.  Otherwise if the GC brings a claim against a lead testing company for a false negative, the company might state that the GC did not use the test kit properly.  If the homeowner does have the house tested, consider refusing to do the work unless the homeowner has lead abatement work done.
Read more