3 Things To Do If You Want To Avoid Construction Litigation
A simple construction project can sometimes cost thousands of dollars in labor and materials, and the possibility of something going wrong can hang heavy over your head. If you're looking to mitigate the risk that you'll end up in some kind of lawsuit over a construction project, here are some tips you can follow:
Get a Written Contract
The days of the handshake deal are long gone. No project is fully ready to start until you have a signed contract in hand that goes over your obligations, the obligations of your general contractor, and other important details like the acceptable dispute resolution process.
Make sure that you actually take the time to review that contract carefully before you sign it. If there's anything that you don't understand or if there is anything you feel hesitant over, take it to a construction attorney for an explanation and some advice.
Follow the Notice of Claim Process
This is particularly important to understand before you start a construction project. Most construction contracts require you to submit a notice of claim if there's a problem. If you want to file a claim for compensation or force compliance with a contract later, skipping this simple step can cause you to lose your rights.
Most of the time, people skip the notice of claim process because they're trying to keep a good rapport with the other party. They want to resolve minor disputes without a lot of complications, and they feel like a formal notice will sour relations. However, you can remind the other party that the contract requires you to put things in writing for everyone's protection as you verbally discuss the issue and hand over your written notice at the same time.
Never Pay the Final Payment Until the Job Is Done
Your contract will likely require an initial deposit and periodic payments as construction progresses. However, the final payment shouldn't be due until the project is finished and you've had time to inspect the site for any issues.
If a contractor starts pushing you to make payments ahead of schedule or to release all of the remaining funds for the project, that's a huge red flag and likely a sign of coming trouble. The contractor may be relying on funds from your project to buy materials for another—which means that he or she isn't financially stable. If you give in to his or her demands, your contractor may vanish on you and leave the unfinished project behind.
If the worst does happen and you have to file a claim, a construction attorney can help.