Alkalay & Smillie, PLLC

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Attorney Edward Alkalay writes a regular column for the Conway Daily Sun newspaper entitled "The Legal Corner." His articles address a wide variety of timely legal issues. Click on the titles below to review his past articles.
 

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The Legal Corner: How to Avoid Contractor-Homeowner Disputes

Each year, many contractors and landowners come to my office complaining about the other not living up to an agreement that they had made for construction or re-modeling of a house. Typically, the contractors contend that the landowners failed to live up to the contract in that they refuse to pay for multiple change orders, extras, and even the work that was originally agreed to. Landowners, on the other hand, typically assert that the contractor failed to provide them with the home that they expected or made mistakes in construction which has caused the landowners needless stress and extra money to repair. Many of these disputes could have been avoided had the parties simply agreed, in writing, before any work was going to be done, to the exact terms of the contract.

The following are suggestions to help avoid these disputes:

(1) Have a Written Contract: It is surprising how many contractors and landowners enter into oral agreements for construction of a house, with very little documentation to back up what either side expects of the other. This is the number one area that causes legal disputes. How do you rectify this? Contractors should have a standard contract that they base every job on. In meeting with the landowners, that contract can be edited to meet the demands of the particular job. However, there are certain provisions governing the responsibilities of both the contractor and the landowner that should be in every contract. The safest way to draft a standard contract is with an attorney’s help. There are also many online resources which can help a contractor or landowner draft a reasonably good contract.

(2) Communicate Early and Often: If either the contractor or the landowner has any concerns (or even if they do not), it is a very good practice to speak or meet often during the construction process. This allows both sides to discuss any concerns early in the process before substantial time and money has been expended. If there are change orders, the contractor should inform the landowner that they will be doing the change order at the landowner’s request and should inform the landowner of the likely cost. A contractor should also make sure that the change order request is in writing and should even consider billing the change order costs at that time to avoid disputes later on.

(3) Take Pictures: It is important for there to be a record of the construction process. This is critical for both the landowner and the contractor. Landowners can see how the process works and will likely save the pictures as a memory of the process. Contractors can use the pictures to assure that they have done what was promised in the contract. Moreover, if there are any disputes, pictures will go a long way toward resolving them.

(4) Try to Resolve Disputes Early: Inevitably, no matter how careful a person is, there may be a dispute that occurs during the construction process. If so, do not lose your temper and argue with the other party. Personality conflicts are as much responsible for court cases as the legal disputes themselves. Try to be calm when talking about your concerns and try to rectify them informally before they mushroom into something more.

(5) Understand Your Costs Before Entering Into a Contract: So many borrowers have gotten into trouble recently by purchasing properties that they cannot afford. Likewise, some contractors have committed to building homes without a full understanding of their costs and the landowners ability to pay. Construction of a home should be a mutually beneficial process – a new home for a landowner and a profitable venture for a contractor.

(6) Use Common Sense: If when you meet someone they give you a bad feeling, be very cautious about entering into an agreement with that person. I have had many clients who come to me with a legal dispute based on a year or more relationship with another person. Many times, the client tells me that they had a bad feeling about the person from the start. You should listen to that internal voice. Whether it is simply a personality disconnect or something more serious, those feelings almost always have a valid basis to them.

In conclusion, building a home (whether you are the landowner or the contractor) involves substantial time, hard work, stress, and money. Both contractors and landowners should be sure to protect themselves before the process begins. Avoiding unnecessary and costly disputes can be avoided with some careful planning and foresight.

Edward D. Alkalay is a partner at Alkalay & Smillie PLLC and can be reached at (603)447-8994 or ed@northconwaylawyers.com. (This article conveys general information and should not be relied on for legal advice without further research and/or consultation with an attorney.)

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