Massachusetts Builders Blog

I represent many, many contractors and construction companies.  Some have never been sued or seen the inside of a courtroom over the life of their business.  Others have had more than one dispute and seem to be fending off attacks on a regular basis.  Owning a construction business is about more than being a skilled contractor.  It's also about running a business. In law, a coach once told me there were three aspects to running a law firm: finding, minding and grinding.  In other words, you have to find the clients.  That involves marketing, networking, word of mouth, advertising, you name it.  Minding is running the business.  There's the accounting, employee management and interaction with clients.  Finally, there's doing the work. The reality is, no one can be an expert in every aspect of a business.  So, do an honest self-assessment, or have a "retreat" with your team.  What are your goals? Where are you succeeding?  Wh...

At the end of the year I think about the disputes I’ve handled, and how they might have been prevented.  I also consider better practices for contractors and how they can improve their businesses.  Here are some old and new resolutions for 2018! 1.                All change orders must be in writing and signed by the parties!   They must state the change in the contract price and how the date of substantial completion will be affected by the change.  This sounds so simple, but I bet I could prevent 90% of all disputes if contractors and homeowner would follow this simple rule.  Document everything.  E-mails or texts are fine.  Just make sure you confirm that they have been read. 2.                Learn how to properly estimate a job. This may be the biggest mistake I have seen contractors make in t...

At the end of the year I think about the disputes I’ve handled, and how they might have been prevented.  I also consider better practices for contractors and how they can improve their businesses.  These are my top ten resolutions for 2017. 1.  Insert a Right to Repair Clause in Your Contracts If you are going to run a contracting business, you are eventually going to run across owners who refuse to pay for work because it is (allegedly) defective.  Or, the client may pay another contractor to “fix” your work and try to collect that money from you.  One way to discourage this practice is by inserting a “right to repair” clause in your contract.  Before an owner can go hire someone else to “repair” your work, they are required under the contract to give you the opportunity to review any supposedly defective work and repair it.  This greatly reduces your exposure to defect claims. 2.  Include a Right to Stop the Work for Nonpay...

“Light At The End Of The Tunnel” by Sura Nualpradid from freedigitalphotos.net My husband, who is a very smart guy, made a very wise observation last week. He said, "It seems to me that most of the problems with construction projects occur when a job is first starting, or at the end." I thought about it and realized that he is absolutely right. A project can go along smoothly, but then problems occur at the end that leave everyone with a negative impression of the experience. I think about my most recent client, who spent over one million dollars renovating his house. He and the contractor are in a dispute about the last $6000.00. I have not made a mistake with the zeros. So, for contractors and construction companies, I offer the following advice: 1. Tell your clients at the beginning if you are finishing up another job. Let them know that you will be starting at a slower pace in order to do justice to the previous project. Promise them that you will afford them t...

To contractors, allowances in contracts may be self-explanatory, but owners often find them confusing.  A typical section on allowances may look like this:              Cabinets                                    $10,000              Kitchen appliances                    $25,000              Bathroom fixtures                     $20,000 What contracts often don’t explain is, what happens when the full value isn’t used? If I only spend $8,000 on the cabinets, do I then get to allocate the $2000.00 to another category?  If not, why not...

Design/Build contractors are really running two businesses at once: there is the design portion of a project, and then there is the actual construction.  Design/Build contractors should therefore have two different contracts for these phases of the job for the following reasons: Design does not fall under the Massachusetts Home Improvement Contractor Statute, M.G.L. c.142A which governs home renovation projects in Massachusetts. There are strict requirements for which clauses have to be included in these contracts and any violation is a  per se , automatic violation of the Consumer Protection Statute, M.G.L. c.93A, which can give consumers up to double or triple damages, attorney’s fees, interest and costs.  For that reason, contractors do not want the design portion of these projects to be subject to these laws. The contractor must make clear to the homeowner that there is a separate fee for the design, and that the fee is  nonrefundable . I have seen too many c...

I have many clients who tell me that they've never been sued. If a problem develops, they work with their clients and try to resolve it. Working as a contractor who does new construction or remodeling has never been harder. Clients turn to the internet and believe they know how to do it faster, better and less expensively. They are savvy consumers who monitor time spent on the job and costs of materials.  Sometimes they work at home and keep close tabs on the work. The pressure on contractors is enormous, and in some cases, can make them discouraged and less motivated to do their best. Despite working in a stressful profession, contractors should always strive to do their best; even if the owner is very, very difficult. The reason for this is simple. A contractor or construction company's reputation can make or break his business. I have had clients receive bad reviews on known websites and seen them severely damage their financial condition. Unfair as it may seem, once ...

It seems as thoug h more and more contractors are branding themselves as design/build these days.  The process is attractive for both homeowners and contractors.  Rather than seeking the services of an architect, the homeowner only needs to engage one professional for the design and execution of a renovation project.  The contractor has a great marketing tool.  He can advertise as a “one-stop” shop that provides both the design and construction as part of a seamless, efficient process that will result in a less expensive, successful project. What I have found in practice is that design/build has both advantages and traps for the unwary contractor and consumer.  The pros for the contractor are many: Earning a fee for both the design and the construction aspects of home improvement projects. Working with a design that has the necessary components for the construction phase. No unclear specifications that handicap the builder. Dealing with known in-hous...

Image courtesy of satit_srihin at FreeDigitalPhotos.net The #1 complaint that I hear from contractors is that they have trouble getting paid.  They provide a service to an owner, do additional work when asked, and then when an owner is presented with a bill, the owner ignores it, pays less than asked or refuses to pay at all.  What is a contractor to do? Here are the rules for getting paid: Start with a good payment schedule. The payments should be linked to milestones so the work does not get ahead of the payments or vice-versa.  Ask for payment at the start of a milestone to ensure reasonable cash flow.  For example: 10% at the start of plumbing. Ask for a reasonable deposit. Make it enough money to ensure payment for custom materials and make it non-refundable.  If you are a home improvement contractor in Massachusetts, the deposit cannot be more than one-third, and you have to include language in your contract stating that fact. Include a ...

When owners discover that their contractor has not paid subcontractors and suppliers, anxiety immediately sets in.  Contractors who are not adept at running their businesses end up with cash flow problems and operate on credit.  The situation then catches up with them and they stop making payments.  Suddenly the owner finds himself being contacted by subcontractors and suppliers who are demanding payment.  The law in Massachusetts is clear; a subcontractor or supplier can only collect against an owner if it records a properly perfected mechanic’s lien.  Then he can only expect payment to the extent that money is owed to the contractor at the time the lien is filed.  That said, the owner has the right to finish the job.  If there are no funds left, the subcontractor or supplier can only go after the general contractor for payment. Mechanic’s liens are complicated.  They consist of two documents: a Notice of Contract and Statement of Acc...

I assume that some of the contractors out there are already nodding their heads.  The Internet has done a lot of good in the world, but in certain ways, it has not benefited home remodelers.  The access to information allows anyone to research products and methods in construction, and unfortunately, a certain percentage of the public concludes that they have developed a level of expertise that trumps that of their contractor's. I have heard numerous complaints from home improvement contractors who now deal with homeowners who want to buy their own materials (they can get a better deal, they want something unique), have their contractors use different methods, or finish a task within an unreasonable amount of time. I am sure that the customers mean well, but interference from their clients can be a real problem for contractors and at its worst, derail a project or result in litigation. How can a construction professional avoid getting stuck with micro-managing (al...