By Chip Bachara
Special to Realty/Builder Connection
Construction law encompasses a wide variety of legal issues from construction contract through the performance of the construction work, issues related to payment for the construction work and issues regarding defects in work, warranty claims and the like.
Realtors need to be aware of the legal isasues that may arise in construction and here are some answers to frequently asked questions:
Q: Do you have to get different permits for constructing homes and office units?
A: This varies depending upon the municipality in which you are working. Typically, however, the construction of a building, whether residential or commercial, requires a building permit and will also require permits for plumbing, electrical, mechanical, roofing, swimming pool and other specific trades that may be involved in the particular project.
Q: Is a contractor bound by his written estimate of a job?
A: The contractor and the owner are both bound by their written contract. If the contractor’s written estimate becomes the basis for construction price, the contractor is bound by that construction price. If the written estimate is understood by the parties to only be an estimate of the cost, the contractor may not be bound by that estimate. To the extent the contractor is bound by the estimate, it is only for the work that is within the scope of that estimate.
Q: The contractor won’t complete my home repairs unless I pay more money. I can’t live in an unfinished kitchen, and feel I am over the barrel. What are my options?
A: If the parties entered into a proper construction contract, the contract should define the owner’s options. Typically, a contractor cannot demand additional money unless there has been a change in the scope, which justifies an increase in the price of the work. The contractor’s failure to complete the work for the agreed upon price would constitute a breach of the contract and would be a basis for terminating the contractor and seeing recovery for damages incurred in finishing the contractor’s work. If the contractor abandons the work, this would be a basis for bringing a complaint against the contractor’s license. In order to protect the owner’s rights, the owner should give the contractor written notice of the breach or abandonment by the contractor and a reasonable opportunity to return to the project and complete the work.
Q: What do I look for in the construction contract to protect me from delays?
A: Make sure that your contract has a specific date or event, which starts the project clock running. Make sure there is a specific period of time within the contractor has to complete the work which can only be extended by acts of God or changes in the work which are documented by a written change order specifically addressing the amount of additional time the contractor is given for that change.
Q: What is the best forum to resolve builder/client disputes?
A: The two traditional forums for client dispute resolution are (1) the court system and (2) arbitration. In commercial projects, the architect is frequently used to make a preliminary determination, which the parties may choose to follow. Whether one forum is better than the other depends upon the circumstances in your case. Factors such as complexity of issues, amount in dispute and financial ability of the parties are all factors to be considered when choosing a forum for the resolution of your dispute.
Q: Is there a government agency that might help me in my claim?
A: In addition to the court system, the most likely place to find assistance through a governmental entity is the Florida’s Department of Business & Professional Regulation Construction Industry Licensing Board. The Construction Industry Licensing Board licenses and governs contractors and can assist with administrative complaints against a contractor’s license. The Licensing Board and its staff will not assist in bringing civil claims against the contractor.
Q: What if I decide I want the house built differently after the builder has already begun the work?
A: In most cases, the owner and contractor can enter into a change order, which allows for a change in the work. A change order of this type will almost always increase the cost and the length of time that it takes to complete the project. It is less expensive to have the design finalized before construction work begins.
Q: How do I know the contractor is licensed and bonded?
A: If a state is required, licensed contractors are required to display their license number on all advertisements, letterhead and contracts. If you do not see a license number, ask the contractor for their license number then verify with the Construction Industry Licensing Board that the license exists and qualifies the company with whom you are planning to do business.
— Henry “Chip” Bachara Jr. is a principal in the Bachara Construction Law Group and can be contacted at (904) 562-1060.