Construction Law for Homeowners

Dealing with the government can be intimidating. Many people are frightened of going to the courthouse to deal with traffic citations. Some people pay advisors to do their taxes for them, so they won’t make a mistake and upset the IRS. How many of us enjoy going to the DMV? For construction workers, the Miller Act was created to make things a little bit easier.

The Miller Act was passed into law back in 1935. The act requires that all contractors hoping to take on government jobs have bonding secured for the price of the job and the cost of the materials. This means that all contractors hoping to have their construction company build something for the job must first get assurance that a payment bond will cover the cost of the project should the job fall apart for any reason.

The Miller Act led to more trust between construction companies and the federal government. The Pentagon was built as a direct result of it passing. It indicated that the United States was serious about expanding its infrastructure, and serious about their relationship with the contractors that they use.

Under the Miller Act, all contractors must have two types of bonds secured:

• A performance bond, which guarantees that an amount be paid if the job is not done or not done well.
• A payment bond, which guarantees payment for all materials and subcontractor fees undertaken on the job.

The Miller Act is mutually beneficial. For the government, it assures that if a job does not go well, they will not be paying for it themselves. They will also not be passing the cost of the unsuccessful job onto taxpayers. The performance bond means that the government can use the bond to pay another contractor to do the job successfully. The payment bond means that the government will not be sued for the costs of the material on an incomplete job. The bond system in general ensures that the government will be working with trustworthy contractors.

For contractors, the Miller Act should give a sense of security too. It means that if you work hard at crafting your construction company, you will get approved for a bond. This rewards good behavior and makes you more likely to secure the contract with the government, which is normally well funded. It also means that a bond is in place to cover the costs undertaken on materials and subcontractors should anything go awry. It means that the government has confidence in you, and you can have confidence in the job.
If you have any questions, contact the Florida Construction Law Group. We want to consistently exceed your expectations.

Just about any seasoned contractor will tell you which type of construction agreement should be used for a simple job like building a deck adjacent to a one-story house: a lump-sum contract. Also called fixed-price contracts, they’re quite simple: the contractor offers a bid encompassing all expenses for a construction or renovation project, and the owner can take it or leave it. As this blog will cover, there are plenty of pros and cons to this relatively straightforward construction agreement. 

Advantage: Price Certainty

The fear of the unknown is quite prevalent for construction owners before the first shovelful of dirt is moved. Fortunately for owners, though, contractors largely assume the risks in a lump-sum agreement. It’s assumed that contractors build a small bit of monetary insurance into the initial bid to cover any surprises. For peace of mind and price certainty, project owners often willingly accept this exchange. 

Advantage: Simplified Paperwork

Compared to other types of construction agreements, the paperwork involved with lump-sum agreements is fairly light. Because the project’s price is agreed-upon prior to project commencement, the contractor doesn’t need to submit itemized invoices or justify every expense related to the project. However, this can easily lead to distrust between the contractor and project owner if things go south for the project. 

Disadvantage: Lack of Transparency

The vast majority of contractors using lump-sum agreements operate in good-faith. However, there’s seldom a way for project owners to verify that. Because detailed invoices and expenses are not given to the project owner, he or she isn’t able to identify the precise margins for the contractor—and where those margins are coming from. 

Additionally, contractors in lump-sum construction projects are generally free to shop around for the least-expensive materials. Again, it isn’t typical for distrust to plague these types of projects, but there is room for distrust to creep in. 

Disadvantage: Contractor Assumes Risk

Contractors operating under lump-sum agreements take on a substantial amount of risk. If an unexpected expense arises, the contractors are the ones who will shoulder the burden. That’s why contractors should only take projects with a clearly defined scope of work. Also—the fewer moving parts, the better. 

Conclusion

Contractors and construction project owners have a menu of options from which to choose the type of agreement that will shepherd the project through to completion. Lump sum contracts are relatively straightforward agreements, but you need to be sure the project you’re bidding on is conducive to that type of contract. There are also ways to negotiate lump sum contracts to more closely align interests and goals between the owner and contractor. Florida Construction Law Group has extensive experience drafting, negotiating, and reviewing construction contracts and would be glad to help with yours. Call us at 305-227-4030 to discuss your options with our team.

The construction industry relies on legal contracts to ensure everyone is on the same page regarding their roles and responsibilities. A properly written contract can help avoid misunderstandings and help promote a successful project. Once an agreement has been made, it is necessary to have a legal contract written up to make it binding. When having this done, it is best to have an attorney either write it or review it to ensure everything is included. Both the owner of the project and the contractor will need to be assigned specific duties.

Perform Services Appropriately

One of the most important duties of a contractor is to perform their services in an appropriate manner. This starts with completing the work according to the specifications laid out in the contract. Additionally, they need to inform the owner of any potential issues that they discover along the way. For example, if the contractor finds that a building design provided by the owner will violate safety standards, the contractor must inform the owner.

Cooperate with Contractors

The owners also have an obligation to cooperate with the contractors so that the contractors can complete their jobs in a reasonable way. For example, once an owner has told the contractors what they want done, they should largely stay out of the way and let the job get completed. Owners should not try to micromanage how each step in the process is completed, but instead only step in if there is a major concern that will impact the quality or safety of the work.

Craft an Effective Contract

In order to meet those requirements, both parties must also negotiate a fair contract in good faith. Understanding some of the key clauses that should be included is a great place to start. The following are clauses that should be in every construction contract:

• Changing Conditions – In the event of unforeseen events or conditions, the risk of loss or delay will shift from the contractor to the owner.
• Termination for Convenience – When a project becomes overly expensive or hazardous, the owner can stop the contract without liability. This clause will specify what, if any, compensation would be due to the contractor.
• Site Investigations – Contractors need to investigate the site to confirm that the conditions are appropriate for the completion of the job.

Speak with an Attorney

Whenever starting the process of entering into a new construction project, it is important to have an attorney there to represent your interests. Contact FCLG to discuss your situation and have your contract drafted or reviewed right away.

When someone wants to hire a contractor to take care of a job for their home or business, one of the first things they will often look for is a contractor’s license. Contractor licensing is important both for the clients (it gives them peace of mind) and for the contractors (it helps them to get customers, and provides many other important benefits).

Required by the State

In the state of Florida, all contractors who work on either residential or commercial projects need to be licensed and insured. Any contractors who are performing construction related tasks without a contractor’s license are violating regulations and can be fined by the state.

Get More Customers

Florida residents are able to look up and find licensed contractors without any trouble. If you don’t have a license that is valid, this will drastically limit the number of people who are able to contact you for your services. In addition, most people will refuse to work with a contractor who is not licensed due to the added risks that exist should something go wrong.

Contractor’s Insurance

Licensed contractors will also carry insurance on the work that they perform. This insurance is in place to pay for any damages that are caused due to the work of the contractor in question. Whether the problem was due to a problem with the quality of the work done, or the material that was used, this insurance will step in to make sure the client’s home or business can be fixed right away. Without a contractor’s license, it isn’t possible to carry this type of insurance.

Shows a Specialty

There are a variety of different types of licensing requirements for contractors in Florida. While this can make it more challenging to get the licensing needed, it also helps to show clients that you are proficient in specific areas. If you carry a plumbing contractor’s license, for example, your clients will be confident in hiring you to complete that particular type of job.

Preventing Scammers

One of the most often overlooked, yet very important, reasons it is important to get a contractor’s license is to help protect Florida from scammers. If it became commonplace to do this type of work without any license, many unscrupulous people would begin offering their “contractor’s services” in the area, and scam many residents and businesses out of a lot of time and money. By complying with licensing laws and regulations, contractors in Florida are helping to keep the quality and reputation of the industry strong. For help with your Florida construction law matter, call our firm at (305) 227-4030 today!

When drafting or reviewing a construction contract, it’s important to watch out for a few important things. These contracts are designed to clarify what work needs to be done, how it should be completed, the costs involved, and much more. When drafted correctly, a contract can help to avoid disputes over a job. When written poorly, however, they can lead to costly legal battles.

Material Terms
In almost all construction jobs, it’s a good idea to identify the exact materials that are going to be used in the project. For example, if you don’t have the specific material terms in the contract, one party may have cherry wood in mind, and the other may be thinking of pine to keep the costs down. Needless to say, this will have a big impact on the project’s end result, and will almost certainly lead to conflict. Listing exactly what types of materials will be used can help you to avoid costly mistakes and possibly litigation.

Prices
Listing exactly how much a contractor or other party is going to be paid, how they will be paid, and at what points along the project the payments will be made is important. Including items like who will pay for any supplies, how subcontractors will be paid, and other related details are also critical for the success of a construction contract.

Time Frame
Identifying how long a job is going to take is one of the more important parts of a construction contract. In addition to including things like dates by which a given part of the project should be finished, it should also include what penalties will be issued if a project takes longer than indicated. For some contracts, there may be a clause that says if the contractor completes a job early, they get some type of bonus.

Termination Options
Ideally, a construction contract will only end once all the agreed-upon work is completed and payments are made. Understanding that it may be necessary to terminate a contract early, however, is an important part of any agreement. Identifying how to properly and legally terminate the contract can help to avoid any type of conflict or legal action should it become necessary.

Warranties & Guarantees
Having detailed information about the warranties or guarantees that the contractors (or others) provide on their work should always be in a contract. If this type of thing is not present, and something goes wrong, it will leave you in a much weaker legal position.

Let Us Help You with Your Next Construction Contract
Depending on the specifics of the contract, there can be many other things that need to be addressed and reviewed. Contact us to discuss all the ways we can help you before, during, and after you enter into any type of construction contract.

“Subrogation” is the right and power of an insurer to legally go after third parties that caused the insured a loss. This is so the insurance company can recover what they paid to the insured. When writing or reviewing a new contract for a construction project, you may hear about something known as “waivers of subrogation” clauses. If you haven’t worked with these in the past, it may sound intimidating or even confusing. These clauses essentially make it clear that the parties involved in the contract waive the rights that their insurers have to file any type of subrogation claim after a loss has already been paid out.

This is intended to help allow the parties to maintain a positive working relationship, even when there is some type of event such as a fire or flood. Whenever the property owner’s primary insurance policy pays out to cover damages, it prevents that insurance company from suing the insurance company of the contractor or construction company. Of course, this is not an ironclad option, and if it can be proven that the construction company caused the fire or other event, the insurance company may still have a claim. Reducing this risk, however, can have a positive impact on the long term working relationship.

During the Construction Project Phase

Waivers of subrogation are most commonly put into effect to cover the timeframe where the construction project is actually being performed. Due to the fact that construction companies and contractors are actively working on the project, there is an elevated risk that something could go wrong through nobody’s direct fault. While people typically work hard to ensure everything is done correctly and safely, it is impossible to eliminate every risk. Should something go wrong during this phase, the waiver of subrogation will typically prevent a subrogation suit.

Post-Construction Incidents

There are some cases where the courts will rule that the construction company or contractor is responsible for an event even after the project has been completed. A court’s determination will vary on a case by case basis. If an apartment building has been built and then an electrical issue causes a fire for example, the property owner’s insurance company may want to seek damages from the insurance company of the construction company.

These types of cases require that the clause is written clearly and precisely to avoid any ambiguity. Courts tend to honor the waivers and dismiss these types of cases, but that certainly doesn’t happen 100% of the time. Having an experienced construction law attorney write or review a waiver of subrogation clause is the best way to ensure you are protected in as many situations as possible.

Experienced Legal Help

If you are entering into a contract for a larger job, having a waiver of subrogation in place can mitigate the risk of conflict. Contact FCLG to discuss your situation and see if this might be something worth adding to your agreements. We can write up the contract, modify an existing one, or simply review something before you sign. Whatever you need, we’ll put our experience to work for you.

When you need a construction job completed properly, it is very unlikely that you’re going to want to manage the day to day activities that need to be completed. To get things done right, you’ll need to hire a construction manager to oversee the project. Part of hiring on a construction supervisor or manager is drafting a construction management agreement to ensure everything is handled according to your wishes.

What is a Construction Management Agreement?

Simply put, a construction management agreement is a contract that is signed between a property or project owner, and the construction foreman. It details information about the job in a format that ensures all parties understand their roles and responsibilities for the project in question. These types of agreements are important because they can help avoid confusion, which all too often leads to conflict in projects like these.

What is in a Construction Management Agreement?

This type of agreement will contain a significant amount of information about the project in question, the property owner, the foreman, and much more. Each agreement will be unique, but they should contain the following information:

• Deadlines – Identifying deadlines for when different milestones within the project must be completed.
• Wages – The amount available for wages to pay contractors, employees, and others involved in the construction project.
• Project Specifications – The details of the project. This would include things like the architectural designs, any specific types of materials to be used, and more.
• Responsibilities of Foreman – Any specific responsibilities that the foreman has to take on.

The level of detail, and the specific things that need to be included will depend largely on the complexity of the project. A small single-family home that needs to be built will not require the same things in the contract as a large multi-million dollar construction project. That being said, anytime a property owner is hiring a construction company or firm to complete a project, it is a good idea to have this type of contract in place. In fact, most construction managers will require one before they can start work.

Get the Help You Need

If you have a construction project coming up and you need a construction management agreement, it is important to work with an attorney experience working on construction contracts. Contact Florida Construction Law Group to talk about your project and see how we can help you draft or review your contracts.

Construction companies and contractors are typically able to accept and complete jobs without any significant problems. Unfortunately, disputes related to these types of jobs are all but inevitable when you’ve been in this business for long enough. In many cases, these types of disputes can be resolved through dialogue, mediation, and other resolution techniques. Sometimes, however, they end up going to court to be litigated.

Litigation can be a time-consuming and very costly option, and knowing when a dispute is headed in that direction can help you to better prepare for it. The following signs can be strong indicators that a particular disagreement is going to end up in court.

Only Able to Speak to Other Parties’ Attorney

If the other party begins to tell you that you should be speaking with their attorney, this is one of the most obvious signs that your case is heading to court. While retaining an attorney for a construction dispute is a good idea, it is a bad sign when the other party completely refuses to speak with you without their attorney present.

Unwilling to Compromise

In virtually every construction related dispute, there is room for compromise. If the other party won’t give an inch and is essentially just repeating their demands every time you speak with them, it is likely going to be necessary to litigate the case. In these types of situations, the courts will often force the compromise to take place, so you may be in a strong position.

Poorly Drafted Contracts

Few things can prevent a construction dispute better than a clear, well-written contract. When a contract has all the necessary information, it becomes difficult to have a dispute because all the potential problems have been dealt with ahead of time. Sadly, a large percentage of construction contracts are missing some essential components. A competent lawyer will catch it.

Breakdown in Communications

When a dispute is just starting, both parties are typically willing to talk about the issue and try to work it out. At some point, the other party may stop accepting your phone calls, and be unwilling to meet with you to try to resolve the issues. They may even be trying to ignore the problem until it goes away. If all, or even most, of the communication has stopped, it is likely time to get the courts involved.

Don’t Hesitate to Reach Out to Us

No matter what your dispute is about, we are here to help. Contact FCLG to go over the details of your situation, and get advice on how to best proceed. If your dispute does indeed need to go to court, we will aggressively represent your interests to help you to get the best possible outcome.

A mechanic’s lien is fairly simple in concept, but can get complicated in practice. To put it simply, this type of lien helps to provide assurances to the people who are doing the actual work on a job that they will get paid. This is important because many construction companies will perform the work with the agreement that they will get payment once the job is done, or once the project is sold.

A mechanic’s lien kicks in should the firm that is getting the work done is unable to pay, and they go through a liquidation process (often as part of a bankruptcy). When this happens, the mechanic’s lien ensures that qualifying groups and individuals will get paid out first, before all others. This dramatically reduces the risk of non-payment to the construction companies, so they can take on jobs with a higher degree of confidence.

Does Not Apply to Auto Mechanics

One of the most common misconceptions about a mechanic’s lien is that it is the lien that allows mechanics to take possession of a vehicle they have fixed it they have not been paid within a set amount of time. This concept is actually known as an artisan’s lien, and has nothing to do with the mechanic’s lien.

Who Qualifies for a Mechanic’s Lien?

There are many groups of people who will qualify for a mechanic’s lien. Whether for a new construction project, improvement work, or most any other job related to the construction field, the following people will likely be covered by a mechanic’s lien:

• Laborers – Those who are performing the on the site work. This includes carpenters, laborers, electricians, plumbers, HVAC contractors, and others.
• Lumber Yards – As one of the main sub-contracted groups involved in most construction jobs, lumber yards will typically qualify for the mechanic’s lien.
• Architects – The architect (and, if applicable, civil engineers) who worked on the plans related to the job.
• Off-Site Fabricators – Those who create items specifically for the job may qualify for the mechanic’s lien.

Length of a Mechanic’s Lien

A mechanic’s lien will typically remain in effect until those protected by the lien are paid in full. This typically occurs once the construction project is completed, but it may extend further depending on the situation.

Enforce Your Mechanic’s Lien

If you have performed supplies, labor, or something else to a construction project and have not been paid, you may be able to enforce the mechanic’s lien. It is important to act quickly, however, as companies that are going through bankruptcy or liquidation often have many different creditors trying to get as much out of them as possible. Florida Construction Law Group [Link to CONTACT US page] has years of experience working with mechanic’s liens, and we would be happy to represent you throughout the process.

Construction projects can be extremely costly and complex, which is why it is important to have everything in order before anything is started. Customers and construction companies should also keep in close contact throughout the job to ensure there aren’t any miscommunications. Once a project is finished, both construction companies and those who hire them often think that everything is set, but that is not the case.

Before a job can be considered finalized, a notice of acceptance must be sent to the construction company. This notice essentially lets the construction company know that the job has been completed and the contract has been deemed fulfilled.

When to Send a Notice of Acceptance

A notice of acceptance should be sent only after a job has been completed and properly inspected. If there are any issues with the job itself, they need to be fixed before a notice of acceptance should be issued. If an individual or company issues a notice of acceptance prior to completing inspections and they then find something wrong, the construction company would not be obligated to fix the issue as part of the original contract.

What Is Included with a Notice of Acceptance?

A notice of acceptance should include the construction number and the proper wording to confirm that the job has been completed. It should also verify that all needed quality control checks have been performed. Along with this notice should be a copy of the quality control checklist that identifies everything that has been inspected on the project. If there were any additional tasks or corrections that the construction company had to perform, the inspections on those items should be included as well.

Why Is a Notice of Acceptance Required?

The notice of acceptance provides legal proof that the contract for the construction job has been completed to the satisfaction of everyone involved. If someone attempts to sue the construction company for something related to the construction job after this notice of acceptance, the courts will be very hesitant to rule in their favor. This also allows construction companies to be able to have a firm end date for each contract, which makes planning and budgeting much easier.

Sending & Receiving Notice of Acceptance

Whether you operate a construction company or you’ve got a contract with a construction company, it is important to send or receive notice of acceptance documents properly in accordance with the law. Having an attorney write up the notice and confirm acceptance is very important. Florida Construction Law Group has years of experience helping both contractors and customers, so contact us to discuss this type of notice today.

Whether building a small home or a skyscraper, construction projects are always very complex. They involve multiple parties, including the architect, the construction company, sub-contractors, the customer, and many others. With all these different parties working on a single project, it is really surprising that disputes aren’t more common than they are.

Years ago, most serious construction disputes would end up in court. This was very expensive and costly, and even had the potential to disrupt the construction process enough that it would never be completed. In recent years, however, more construction disputes have been turning to mediation to solve disputes. This is because of some of the incredible success that this type of conflict resolution has had in just about every type of dispute.

Required or Optional Mediation

Mediation has become so successful that some construction contracts are being written to include a requirement that all disputes go through mediation before the courts are involved. Even when this is not the case, however, the parties in dispute can agree to come to the table and use mediation to attempt to solve the problem.

Bringing Everyone Together

The goal of a mediator is not to help find the winners and the losers in a conflict (which is what the courts do). Instead, the mediator is trying to find solutions to problems, which will maximize the benefit to everyone involved. With this focus, the mediator will bring the parties together and help guide the conversation toward ideas that are mutually beneficial.

Accepting Sacrifices

In many disputes, the hardest thing for the parties to do is compromise in a way that doesn’t work out in their favor. A mediator can help everyone realize, however, that if all sides are able to give in a little bit, they can avoid costly court battles and the possibility that the entire project will be lost. In the end, mediators are often able to help convince all parties to accept less than they would have desired in order to keep the construction project moving forward.

Learn More about Construction Mediation

Having an attorney who is dedicated to construction law working as a mediator can help bring a lot of insight into the process. If you are having a conflict about a construction project or you would like help in avoiding these types of conflicts, please contact FCLG today. We’ll be more than happy to work with you to find creative solutions to construction conflicts throughout Florida.

Unlicensed contracting is a crime in Florida. Section 768.0425 provides that a consumer (typically a homeowner) harmed by an unlicensed contractor is entitled to treble damages and attorney’s fees.

In Home Construction Management, a general contractor sought the civil remedies under §768.0425 against its subcontractor for disgorgement and treble damages. Home Construction Management, LLC v. Comet, Inc. 125 So.3d 221 (Fla. 4^th DCA 2013).  The general contractor alleged that the subcontractor was unlicensed where the scope of labor required licensing and was thus harmed by the overcharges that had been paid to the subcontractor. The court held that the subcontractor was guilty of unlicensed contracting and ordered treble damages and attorney’s fees.

General contractors should be aware of this law as it can be used against unlicensed subcontractors to obtain an award of treble damages and attorney’s fees. Subcontractors, and any unlicensed contractor, should also be aware of the punitive damages, as well as criminal penalties they may face for committing unlicensed contracting in Florida.

Ray Garcia, Esq.

www.floridaconstructionlawgroup.com

Florida contractors have developed a reputation for have suspect business practices such not completing jobs properly, using inferior quality products and overcharging for works or sub contracting work off to less reputable individuals. Here are some tips that may help you in avoiding being taken advantage of by a contractor.

1. Obtain Multiple Estimates. Contractors will often provide you a low estimate to get the job. Then, as the work progresses they will upsell you on products and services such change orders. Always get a very detailed estimate that includes the cost for materials, labor, fees and the contractor’s profit margin.

2. Create a progress payment schedule. A progress payment schedule incentivizes the contractor in continuing to working on the project. Avoid paying large upfront deposits that incorporates immediate profits. Schedule the payment whereby the contractor receive payment after completing portions of the work.

3. Ask the contractor for references. Find out from others or the contractor himself individuals who have used the contractor in the past. Then, ask those individuals how they heard about the contractor. Ask if you can visit the job to inspect the quality of the work and products used on the job.

4. License Status.  Contact the department of Business and Professional Regulation to see if the contractor’s license is in good standing or the contractor has received complaints from other consumers. Additionally, ask for a copy of the contractor’s insurance policy.

Ray Garcia, Esq.

Board Certified in Real Estate Law

by the Florida Bar

www.Floridaconstructionlawgroup.com