Originally posted 2011-11-14 09:00:29.
As I was looking through my Google Reader feeds at the end of last week, I ran across a great post by my friend Andrea Goldman (@andreagoldman) at her Massachusetts Builders Blog. Her blog is a great resource for Massachusetts home builders and their attorneys. In her post, she points out something that contractors (whether primarily commercial construction or residential construction) should not forget: it is up to you, the construction professional, to set expectations and to educate the owner as to how the project will run.
Andrea focuses on residential home builders and projects because she, like I, has seen an uptick in residential construction issues recently. The combination of the easy money of a few years ago and the sudden downturn in the residential housing market has caused some homeowners (and unfortunately a few contractors) to cut corners and seek to run jobs themselves in a way that may or may not be conducive to a well run project.
To save costs, homeowners seek to self perform work or supply materials to a job and thus remove that portion of the scope of work from the contract. As a residential contractor in particular, you need to see that allowing a homeowner to control his or her costs this way is fraught with disaster. Delays, questions about scope of responsibility, and squeezed profit margins (not to mention the frustration of subcontractors and your own people having to work around a homeowners brother in law painting when he can fit it in) can only lead to disputes on the back end. If a homeowner starts to try and pull your scope from you, take it as a red flag that this could end up a troubled project.
Even in commercial construction where the owners are supposedly more sophisticated and aware of the construction process, expectation setting is key. As the construction professional, you must have your contract and scope of work drafted in a manner that leaves as little doubt as possible as to what is and (importantly) what is not included in the contract. A well drafted contract is the first step in the necessary education and expectation setting process. Your local construction attorney can assist you with making sure that your contract includes what it needs to in order to protect you from disputes that may arise from the inevitable and hopefully minor glitches that will occur on a construction project.
The next step that a contractor needs to take, particularly in this economy, is to discuss the progress of the project with all involved from the owner to the architect and the subcontractors. Communication of this information outside of the bare contract documents can only smooth the process. An owner that understands the process will be less troublesome than one that doesn’t. Having a written change order provision in the contract is a must. Following that provision after explaining it to the owner will make your life as a builder much less complicated.
Education, communication and solid contract drafting on the front end will lead to many fewer frustrations and disputes during and after construction.
As always, I welcome your comments below. Please subscribe to keep up with this and other Construction Law Musings.