Building your dream home should be an exciting experience, not a stressful battle with your contractor. Unfortunately, construction projects go awry. By taking proactive steps before you even sign a contract, you can significantly reduce the risk of construction chaos. We help homeowners navigate the legal aspects of construction projects, helping with a successful journey and minimize financial nightmare, if chaos arises.
Step 1 Building a Strong Foundation: Referrals and Background Checks
- Start with reliable referrals: Ask friends, family, and neighbors for recommendations on reputable contractors.
- Don't stop at referrals: While word-of-mouth can be helpful, take it a step further. We emphasize the importance of a full background check, including:
- Licensing and registration verification
- Insurance coverage review
- Complaint history and litigation records
Step 2 Protecting Your Investment: Negotiation is Key
- Beware of upfront payments: Many contractors request large deposits upfront. We advise against large upfront deposits. Negotiate a lower deposit and get clear terms on how those funds will be used.
- Scope of work: Is the contract clear what is going to be done for you exactly and when? Make sure the contract provides for phases of work, a clear timeline and how much each phase will cost you.
- Transparency is key: Request monthly accounting with detailed line items for expenses. This ensures your money is being used for your project and not another project.
- Progress lien waivers: Require progress lien waivers from the contractor and subcontractors. This protects you from mechanics liens placed on your property for unpaid bills.
Step 3 The Power of a Detailed Contract
- Scope of Work: The contract should clearly outline the project's specifics, including materials, labor costs, and a timeline for completion.
- Change Orders: Establish a clear process for handling project changes beyond the initial scope of work. This protects you from unexpected costs and ensures both parties are on the same page.
- Penalty Clauses: Consider including penalty clauses for missed deadlines that were within the contractor’s control to incentivize the contractor to stay on schedule.
Step 4 Empowering Yourself: Termination Clauses and Control
- Hold your contractor accountable: Include a "right to terminate for convenience" clause. This allows you to fire the contractor without cause, if necessary. While it may not recover lost funds, it empowers you to move on from a bad situation.
- Don't be afraid to walk away: If your gut tells you something is wrong, it probably is. Don't hesitate to terminate the contract if your contractor breaches its terms.
Remember: Ultimately, a homeowner's best protection is a good contract. Do your research, scrutinize, and demand accountability.
At KYZ Law P.C., we can help you vet your contractor, understand your rights, negotiate a favorable contract, and ensure a smooth construction process. Contact us today to discuss your project and avoid a contractor nightmare!
