Should you enter into a construction contract if you’re uncertain about the terms? You might prefer to trust that everything will go smoothly, but in reality, any number of things can go wrong when you start a new construction project. It’s worth checking your contract for any possible error or flaw. If you do, you could save yourself a great deal of legal trouble in the long run.
- Time frame
Make sure the contract provides a time frame that works for both parties. As the property owner (or person receiving construction services), you may have a strict deadline in mind, with other scheduled tasks that depend upon timely project completion. For example, you may be a homeowner looking to finish an addition before you can list the property for sale. In turn, the contractor should only accept if the proposed time frame is feasible.
- Prices and pricing scheme
While it may seem obvious to agree upon a price for the construction services, contractors sometimes include additional charges that were not initially discussed. You should ask about the possibility of extra fees and request an estimate. These details can be included in the contract to help you avoid any financial surprises. You should also specify the pricing scheme—in other words, whether the cost will be paid in a lump sum, a rate per unit, or another pricing method.
- Payment terms
The contract should specify whether you will be paying a lump sum or in monthly installments. If you are making monthly payments, make sure the payment dates are practical for you, and decide whether the contractor should be able to issue late penalties.
- Construction lien law protection
Florida law requires certain types of residential contracts to include a visible lien law notice. If you are engaging in a project that exceeds $2,500 and relates to the improvements of real property, your contract should include the lien notice. It essentially states that if your contractor fails to pay subcontractors, sub-subcontractors, or material suppliers, those parties are legally entitled to file a lien on your property. This means your property can be sold against your will to make sure everyone—including the original contractor, if you failed to pay them—is adequately compensated for unpaid labor, materials, or other services. You can add a stipulation to your contract in order to protect yourself from Florida lien law, but it’s best to consult an attorney to ensure that you understand every aspect of this provision.
- Recovery fund disclosure
Most types of construction contracts that must include a lien notice must also include a recovery fund disclosure. It must be visibly placed within the contract. This disclosure outlines your right to seek compensation when a contractor’s unlawful actions result in losses on your end.
- License number
The lien law notice, the recovery fund disclosure, and the contractor’s license number are all required by Florida statute. Make sure all of these elements are clearly visible on your construction contract, if applicable, before signing. Any violation could result in a hefty fine.
- Disputes and termination
Your contract should also include specific methods that you and your contractor will use to resolve disputes or problems. For example, you may include an arbitration clause to avoid having to settle disputes in court. Contracts can be dissolved if one or more parties breaches the contractual terms. Mistakes in the contract can also lead to termination, so make sure all the information is correct. If you both mutually decide to terminate the contract for any reason, you can draft a document stating the contract has been voided.
A qualified lawyer can ensure that the terms of your construction contract benefit you as much as they benefit the other party. Call the Florida Construction Law Group to discuss your upcoming construction project and see how we can help protect your legal rights in the form of a contract.