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30May 2024

Florida construction projects are the work that builds our communities. Whether you’re looking to build or renovate your home, a business, or other structure, it’s important to understand the financing options available to you before committing to any loan options.

When people seek out financing for a construction project, it’s often the first time they’ve ever heard the terms “single-close” or “multi-close” loans. Construction jobs generally require (at least) two loans or terms: a construction loan that funds the work over the time of the job and then a term that extends long-term like a 30-year mortgage. As you weigh your options, we want to help you understand what each of these options is so you are able to proceed with clarity and confidence.

What is a Single-Close Construction Loan?

A single-close construction loan is a process that streamlines securing construction financing into a single transaction. It consolidates the construction phase financing and the subsequent long-term mortgage into one comprehensive loan application and closing. Upon the completion of construction, the initial loan transitions into a traditional mortgage, hence the alternate names “all-in-one” or “construction-to-permanent” (CTP) loans.

The appeal of single-close loans lies in their simplicity and cost-effectiveness. Applicants face just one set of paperwork and one closing event, significantly cutting down on administrative burdens and closing costs. Moreover, the security of knowing your long-term mortgage’s terms and interest rates upfront eliminates the uncertainties that come with securing additional financing post-construction.

What is a Multi-Close Construction Loan?

In contrast, multi-close construction loans introduce a degree of flexibility to the construction loan process. This model necessitates obtaining two distinct loans: one for the construction phase and another for the long-term mortgage that refinances the initial loan upon project completion. The first loan covers construction costs, while the second, secured post-construction, transitions the financial commitment into a 15 or 30-year mortgage.

Opting for a multi-close loan opens up additional possibilities that could lower costs, but it comes at the expense of certainty. Although it involves more steps, with separate approvals and closings for each phase, this route can offer lower rates and more favorable terms for the long-term mortgage. It caters to those willing to take on the uncertainty of a second approval process while preparing for potential financial or project changes that could lead to better loan conditions down the line.

Proceed With CertaintyAt Florida Construction Law Group, we are ready to help the hard-working people of Florida through the construction loan process. We understand the weight of these financial decisions, and we are committed to guiding you toward the financing option that best suits your project’s needs and your financial situation. Contact our team to schedule a consultation and get started on the road toward making the most informed choice possible.

17Apr 2024

Handling change orders and preventing scope creep without legal complications is a balancing act for contractors and developers. While change orders are a normal part of construction projects, they can sometimes lead to disputes and additional costs. The process is meant to adjust the project as it moves forward, but it can lead to unexpected challenges without careful management. Understanding the legal framework and having clear protocols can significantly affect handling these changes.

Change Leads to Possible Disputes 

It’s not uncommon for the initial agreement to be modified in construction projects. These modifications, known as change orders, adjust the original scope of work, whether by adding or removing tasks. Florida law defines a change order as any modification authorized by the property owner that changes the originally agreed-upon labor, services, or materials. While contractors might see change orders as an opportunity to increase project value, they also acknowledge that these can extend the project timeline. 

Disputes often arise when there’s disagreement over whether a task is a change order or was included in the initial contract, whether the change was authorized, or if the cost of additional work was agreed upon. Including a ‘construction change directive’ in contracts allows owners to make unilateral order changes. This can sometimes make it hard to predict how changes affect project costs and timelines. A written agreement on extra work, signed by both parties, can also help clarify expectations. Identifying authorized individuals who can approve change orders on behalf of each party is crucial. This approach minimizes confusion and ensures that modifications are documented and agreed upon.

The Critical Path & Extensions 

Change orders potentially increase the project’s scope and affect the project’s completion timeline and costs. For a delay to be considered compensable, it must impact the project’s critical path. The critical path is the sequence of stages determining the minimum time needed to complete a project. However, not all delays will extend the project’s completion time. Understanding which delays affect the critical path and could lead to compensable claims. Additionally, change orders can extend the deadline, allowing a contractor to get a lien on the property. 

This extension is valid as long as the change order work was agreed upon in good faith and completed within a reasonable timeframe. The court uses the Aronson/Michnal test to determine if work counts as final furnishing, extending the time for filing a claim of lien. This test checks if the work was done in good faith, within a reasonable time, according to the contract, and was necessary for a complete job. The ‘punch list’ work, blending repair, and additional work under a change order illustrate how specific tasks can extend the lien filing period if authorized as change orders. Ensuring that change order work aligns with the contract and is completed promptly protects your ability to secure a lien, highlighting the importance of clear, mutual agreements on project changes.

Solidify Your Project With Florida Construction Law Group 

If you’re facing challenges with change orders or scope creep in your construction projects, seeking professional advice is essential. Consulting with an attorney experienced in construction law can help you understand your rights and obligations and ensure that your contracts are structured to manage these issues effectively. Schedule a consultation today to get the guidance you need to navigate these challenges successfully.

18Mar 2024

Encountering delays and budget overruns is a given. These are issues that can be mitigated as opposed to outright eliminated. Despite how common they are, don’t overlook the importance of developing pre-emptive ways to limit their impact on your project’s timelines and finances. Indirectly, this will also safeguard your relationships with your clients. The secret to overcoming them lies in adopting a proactive stance and being equipped to address arising issues promptly. This approach is pivotal in steering construction projects toward successful completion.

Be Proactive with Construction Delays

The initial step in confronting project delays is pinpointing their root causes. Typical culprits range from adverse weather conditions and supply chain disruptions to modifications in project scope. Understanding the underlying issue is a prerequisite for developing a solution that works for you and your clients. For example, weather-induced delays call for a revised work schedule, whereas supply chain issues could be mitigated by identifying alternative suppliers or materials. Moreover, a thorough reassessment of the project timeline may reveal opportunities for recuperating lost time, potentially through workforce augmentation or extended working hours.

Evaluating the ramifications of delays on the project’s overall timeline and budget is imperative. This evaluation should be accompanied by transparent communication with subcontractors and suppliers, given their critical roles in the project. Documenting the delays and their justifications will be referenced by your attorney (if necessary), and it will assist you with the discussions with your clients when there is an alteration to the timeline. Proactively managing delays and incorporating buffer periods into project timelines can significantly reduce their impact.

Maintaining open lines of communication is crucial. Ensuring that all project participants, including team members, stakeholders, and clients, are apprised of delays and the measures being implemented for resolution is essential for sustaining trust and managing expectations.

Legal Considerations for Managing Cost Overruns

Dealing with cost overruns begins with a detailed project budget analysis to determine where your additional expenses came from. These could stem from unforeseen site conditions, fluctuations in material costs, or other factors. It may be necessary to reassess the project’s scope. During this time, look at your options for making adjustments, ultimately allowing you to fulfill your obligations. Engaging with your team members to brainstorm cost-saving strategies can yield creative alternatives.

Establishing a contingency fund for unexpected expenses is one financial strategy for construction projects. Negotiating favorable terms or rates with suppliers and contractors can alleviate financial pressures. Consulting with a financial expert specializing in construction projects can offer insights into budget management and risk mitigation. Being transparent with budgetary concerns with stakeholders can preempt misunderstandings and preserve the project’s integrity. You should have budget reviews regularly to address some of the financial challenges you’re facing at their earliest stage. 

Maintaining an open dialogue with clients about cost overruns is essential. Candid discussions regarding the situation and potential remedies, such as project downsizing or pursuing more economical options, are difficult to have—but they are better than late-stage surprises.

Lawyers Who Understand the Construction IndustryFacing delays and budget overruns in construction requires a comprehensive understanding of the issues, effective communication, and practical problem-solving strategies. Should these challenges arise, consider consulting with a law firm with significant construction law experience. Contact us to schedule a consultation.

09Jan 2024

Delays are an inevitable reality. While minor setbacks are often absorbed into the project timeline, more significant delays can have far-reaching consequences. They disrupt project schedules and increase costs. When substantial delays arise, the question of who bears responsibility and the extent of compensation becomes a complex legal issue. This is where delay claims come into play.

Delay claims are formal notifications sent by a contractor to the project owner or another responsible party alleging that their actions or inactions caused a delay in the project’s completion. These claims seek to recover damages incurred due to the delay, such as increased labor costs, overhead expenses, and lost profits. 

Understanding the intricacies of delay claims is crucial for Florida contractors to safeguard their interests effectively and navigate the legal landscape surrounding these complex disputes. We wanted to explore the legal aspects of delay claims to provide contractors with valuable insights into identifying, documenting, and pursuing delay claims in Florida.

Identifying Delay-Causing Events

The first step in handling delay claims is to identify and document the events that caused the delay. Accuracy is critical. This requires a detailed overview of the project’s contractual obligations, the original project schedule, and the actual progress of the work.

Common causes of delay in construction projects include:

  • Owner-caused delays: These delays arise from actions or inactions of the project owner, such as late or incomplete design changes, delays in obtaining permits, or interference with the contractor’s work.
  • Subcontractor-caused delays: Delays caused by subcontractors can disrupt the overall project schedule if their work is critical to the project’s progress.
  • Unforeseen events: Unforeseeable events beyond the control of any party, such as severe weather conditions or natural disasters, can also cause delays.

Documenting the Delay

Once the delay-causing events have been identified, it is essential to document the delay. This documentation should include:

  • Date and time of the delay event: Accurate timestamps are crucial for establishing the sequence of events and determining the impact on the project schedule.
  • Nature of the delay event: Clearly describe the event that caused the delay, providing specific details and supporting evidence.
  • Impact of the delay event: Analyze how the delay affected the project’s progress, including the specific activities that were hindered or halted.
  • Communications with the project owner: Document all communications with the project owner regarding the delay, including notices, letters, and meeting minutes.

Pursuing Delay Claims in Florida

In Florida, contractors can pursue delay claims under the Florida Prompt Payment Act (FPPA). The FPPA establishes a framework for resolving payment disputes in construction projects, including delay claims.

To pursue a delay claim under the FPPA, contractors must follow specific procedures, including:

  • Providing timely notice of delay: Contractors must provide written notice to the project owner within 20 days of becoming aware of the delay.
  • Submitting a formal delay claim: A detailed delay claim must be submitted to the project owner within 45 days of the substantial completion of the work.
  • Negotiating a resolution: Contractors should attempt to negotiate a settlement with the project owner before resorting to litigation.

If negotiations fail, contractors may have to pursue their claims through litigation. This process can be complex and time-consuming, and it is highly recommended that contractors seek legal counsel from an experienced construction law attorney.

Legal Insights for Contractors

As Florida contractors navigate the complexities of delay claims, here are some valuable legal insights:

  • Proactive approach: Early identification and documentation of potential delay-causing events can strengthen a contractor’s claim.
  • Effective communication: Maintaining open and transparent communication with the project owner can help resolve delays amicably.
  • Seek legal counsel: Consulting with an experienced construction law attorney can provide invaluable guidance and representation throughout the delay claim process.

Delay claims are a prevalent issue in the construction industry, and Florida contractors must be well-versed in their legal rights and responsibilities when handling them. By understanding the causes of delays, documenting delays, adhering to FPPA procedures, and seeking legal counsel, contractors can protect their interests and navigate the complexities of delay claims.

Florida Construction Law GroupIf you need help with delay claims in your construction projects, don’t navigate these complex situations alone. Schedule a consultation with Florida Construction Law Group to ensure your interests are protected, and you have the legal insights to handle these claims effectively.

08Dec 2023

Construction work is the backbone of our cities, an essential but complex combination of hard work, meticulous planning, and substantial financial transactions. The industry not only builds our communities but also shapes them to be better, safer places to live.

All of this also comes with complex legal issues that require diligent attention. Throughout the course of work, significant documentation must be not only drafted, agreed upon, and signed, but kept securely to reference when needed.

This is one critical aspect that will make or break the success and legal standing of a construction project: record keeping. Verbal agreements, while sometimes legally enforceable, are far from the best practice in the construction business. The foundation of any solid construction project management lies in the meticulous documentation of physical and digital records, and ensuring multiple copies are safeguarded.

Protect Yourself from Litigation

The construction business, with its myriad of transactions and interactions, is no stranger to litigation. It’s an inherent part of the business landscape. However, being dragged through legal proceedings doesn’t have to be a norm for your company (nor is it what you signed up for when you got into construction).

A comprehensive and accessible paper trail acts as a shield against the risks of litigation. By meticulously documenting every transaction and maintaining a record of all work completed, you create an armor of evidence that can protect your interests. This systematic documentation can be the difference between a resolved dispute and a prolonged (and expensive) legal battle. To safeguard your work from unnecessary litigation, it’s imperative to keep precise records that capture all the information necessary to defend your projects and your company.

Maintain Records Long-Term

It’s not just about keeping records while the work is active. The conclusion of a construction project doesn’t signal the end of the need for its records. In Florida, the statute of limitations on construction litigation is up to four years post-completion. That number can be extended to ten years in cases where the defects are considered to be latent.

This sets a minimum standard for how long records should be kept, but the savvy approach is to maintain these documents indefinitely. These records could be pivotal in future legal disputes or serve as a blueprint for handling subsequent projects and disputes. The longevity of your records could mean the longevity of your legal and financial security.

Establish a Consistent Record Keeping for Your Construction Business

Consistency is key. You need to prioritize efficiency and reliability in record keeping. When records from various projects are uniform in the way they are drafted and maintained, it not only streamlines management but also reinforces their credibility in the legal realm.

Courts tend to raise an eyebrow at records that lack consistency, casting doubt on their authenticity. A haphazard approach to documentation can lead to confusion, errors, and legal complications. It is crucial to establish and adhere to a consistent record-keeping protocol.

Ensuring that your record-keeping practices are beyond reproach is not just good business – it’s a legal imperative. At Florida Construction Law Group, we take pride in crafting consistent legal documents for your projects. Contact us today to fortify your record-keeping strategies and cement the legal standing of your construction work.

09Nov 2023

At Florida Construction Law Group, we regularly discuss the importance of strong construction contracts and how they safeguard any project’s progress and ultimate completion. Your work is best protected when you draft, sign, and thoroughly understand strong contract terms.

One of the most important elements of these contracts is the scope of work clause. This sets the stage for much of the project and is one of the key aspects of a construction contract that not only settles disputes but also proactively prevents them. Everyone should understand the scope of the work at hand so nobody is able to dispute strong work being done in the future. 

What is a Scope of Work (SOW) Clause?

A scope of work clause, commonly referred to as an SOW, serves as the blueprint of your construction project. It outlines the materials, activities, project milestones, deliverables, and, ultimately, the end product expected in the work.

Think of it as the document that gets everyone on the same page. It should leave no room for ambiguity, ensuring that both parties understand their responsibilities and expectations from the very beginning.

An SOW allows all stakeholders to align their efforts and resources effectively. Whether you’re the property owner, general contractor, or subcontractor, a well-drafted scope of work clause is your compass.

How Scope of Work Clauses Protect Your Project

These are often the key to preventing and resolving some of the most common construction disputes. Before you take any other steps when a dispute arises, refer to the SOW to see if the dispute is able to be quickly resolved.

Imagine a scenario where there’s a disagreement between the property owner and the general contractor regarding the quality of materials used. Without a comprehensive scope of work clause, this dispute could spiral into a costly and time-consuming legal battle. However, if the scope of work clause clearly defines the materials to be used and the quality standards to be met, it becomes a straightforward resolution.

Work with Florida Construction Law Group on Your Contracts

When it comes to protecting your Florida construction project, partnering with experienced legal professionals who understand construction law is vital. At Florida Construction Law Group, we have significant experience in drafting, reviewing, defending, and disputing terms in Florida construction contracts. We are able to handle disputes from either side because we understand the scope of work being done to build and preserve our communities.

Don’t leave the fate of your construction project to chance. Rely on Florida Construction Law Group to draft and defend your next construction contract.

04Oct 2023

In construction law, performance bonds play a pivotal role in securing financial commitment to a project. These financial instruments ensure that construction projects are executed smoothly and without disruption.

However, when disputes arise and claims are made against performance bonds, a complex dance of legal intricacies commences. When a surety is facing potential liability due to a performance bond claim, it’s imperative that a thorough investigation takes place to verify the claim and find potential remedies.

What is a Performance Bond?

Performance bonds guarantee the value of the work is not lost if a contractor is unable to pay, faces bankruptcy, or is dealing with a similar circumstance. These bonds ensure progress is not stalled on the project when financial issues arise. They provide protection through payment guarantees for labor, materials, and services rendered.

Verifying a Performance Bond Claim

Upon receiving a performance bond claim, the surety’s initial duty is to launch a comprehensive investigation. This process serves as the cornerstone for determining whether the bond principal (the party responsible for fulfilling contractual obligations) is indeed in default. Verifying this is an important first step before anything else is able to move forward.

Once liability is confirmed, it’s important to investigate each and every aspect of the agreement and its ties to the project. By delving into the specifics, the surety gains a panoramic view of the circumstances, allowing them to determine the most appropriate course of action.

Investigating a Performance Bond Claim

The investigation process during a performance bond dispute is vital to finding a resolution that satisfies all involved parties. As a surety, engaging in a thorough and expeditious investigation is not just a legal obligation but a strategic move to uncover remedies, safeguard interests, and facilitate a fair resolution.

A thorough investigation not only demonstrates the surety’s commitment to remedying the situation. The investigation serves as a crucial element for the surety to identify potential avenues for resolving the dispute while mitigating the impact on all parties involved. All options should be on the table, including renegotiations or even collaborative solutions to rectify the situation without entering litigation.

Work with an Experienced Florida Construction Law Firm

In the realm of construction law in Florida, a surety’s responsibility is not one that can be taken lightly. The intricate web of legalities, obligations, and potential liabilities requires a steadfast dedication to due diligence. That’s where Florida Construction Law comes in.With a deep understanding of construction law and performance bond intricacies, we provide clients with unwavering representation and advice through every phase of a surety claim and construction project. Whether you are facing a claim or attempting to execute a claim, we handle both sides. Contact our team and get the best representation for your performance bond dispute today.

06Sep 2023

What’s in a contract? For construction contractors, the answer should be everything. Contracts are the backbone of Florida construction work, and it’s imperative that these contracts are fortified with careful and thorough legal consideration.

But, what terms do you really need and what do some of the common terms actually represent when you’re signing a contract? We want to make sure you have peace of mind before you sign anything.

Pricing Terms

Fixed Price – For fixed-price contracts, all work must be done for the defined price that will either be paid for all at once (lump sum) or over the course of the work.

Guaranteed Maximum Price (GMP) – Under GMP terms, there is a price limit set for the work. Any work done beyond this upper limit is paid for by the construction manager.

Time and Materials – This type of contract requires the contractor to bill the owner for labor, materials, and hours worked. This is best for jobs where the amount of time and materials required is unclear.

Unit price – Unit pricing uses a fixed price on a defined “unit” such as price per square foot. Contractors bill for each individual unit in the work.

Draw Request – Many contractors are paid out in phases over the course of the job. A draw request is made when more money from the loan is needed and a phase of the work is complete. These often result in draw request disputes.

Dispute Resolution Terms

Dispute Resolution – Dispute resolution in construction contracts ensures a proactive approach when disputes arise involving draw requests, payments, materials needed, and other issues.

Indemnification – This is applied when any damages are incurred due to actions or omissions by a contractor. The contractor is held responsible for these costs as opposed to the owner unless otherwise defined.

Forced Arbitration – Certain contracts will include language for forced arbitration which requires that the involved parties enter into legally-binding arbitration as opposed to filing a lawsuit to resolve issues that arise.

Termination – Construction contracts must define when a job is able to be legally terminated. This includes when contractors are able to walk away and when the owner or client is able to terminate the work to either hire new contractors or abandon the project.

Use Florida Construction Law to Review Your Construction ContractsThese are just a sample of the many key terms included in Florida construction contracts. It’s important to have an attorney review your contracts before committing to a job. This protects you, your employees, and the work being done. Contact Florida Construction Law Group for a thorough contract drafting or review today.

09Aug 2023

One of the best and most efficient ways to help ensure payment as a construction contractor is to file a mechanic’s lien. A lien, in general terms, is a legal guarantee that the lienor (person who filed the lien) gets money if the property is ever sold. There may be multiple liens on one project or property, which is one reason why contractors should file a lien as soon as they believe it would be beneficial.

This blog will walk through the general process of filing a mechanic’s lien and enforcing the lien through a foreclosure action.

Step 1: File the lien in accordance with Florida law. 

The most important thing to keep in mind at the beginning is the deadline for filing a Florida mechanic’s lien. As long as you are privy to the project’s prime contract, you have 90 days from the project’s last work to file a lien. If the prime contract was terminated earlier than the project’s last work, you must file within 90 days of that contract termination. 

The lien itself must contain certain information about the project and be filed with the county clerk’s office where the project is located.

Step 2: Send notice to interested parties. 

After filing your mechanic’s lien, the real work begins. Florida law requires lienors to file copies with the project’s interested parties within 15 days of the lien’s filing. Copies should go out to developers, owners, lenders, subcontractors, and material suppliers. 

In many cases, simply giving notice that you are planning to file a lien will get you the payment. A Notice of Intent to Lien is not required in Florida, but it may result in payment all the same.

Step 3: Consider filing a foreclosure lawsuit to enforce the lien. 

You’ve filed a lien and haven’t heard anything from the project owner despite the lien notice and multiple attempts to contact them. It might be time to tighten the screws.

Under normal circumstances, the lienor in Florida has one year from the date of the lien’s recording to bring a foreclosure action. However, that statute of limitations can be drastically shortened in two ways. One, the property owner can file a Notice of Contest of Lien to shorten it to 60 days. Two, the deadline can be changed to just 20 days if the interested party comes back with a counter-lawsuit after receiving notice of the lien.

Step 4: Talk with your lawyer and turn over everything.

Your attorney should handle all the technical requirements, like filing the foreclosure lawsuit with the appropriate court and arranging for service of process to the other parties. However, you can do your part by giving your attorney relevant documents, contracts, pictures, and other information. Being transparent and forthcoming can help your case.

A successful case will usually result in a sale of the property or project. You may have to wait before you get the money you are owed. In some cases, successful claimants (lienors who enforce their liens by filing a foreclosure action) receive reimbursement for attorney’s fees.

A Skilled Attorney is Your Greatest Resource

Filing and recording a mechanic’s lien requires great attention to detail, as does ensuring you did so in the appropriate amount of time. Filing a foreclosure lawsuit to collect on that lien is much more complex; hiring an experienced attorney is the best thing to do. You deserve to be paid for the work you did, and our firm would be glad to help make that happen. Call us at 305-227-4030 or fill out a form on our website to get in touch with Florida Construction Law Group.

15Jul 2023

You have probably heard all about home solar panels- go green to save the earth, with no money down, and pay almost nothing on your electric bill. It sounds like a no-brainer if you are a homeowner to use clean energy to cut back on your electric bill.

With over 11,000 solar panel companies nationwide, the ease and availability of equipping your home with panels are unending. Homeowners can pay cash, take out solar loans, and use solar leasing. We are going to look at one specific funding option known as PACE

PACE (Property Assessed Clean Energy)

PACE loans are increasing rapidly throughout Florida. PACE loans are a low-cost, long-term financing option for homeowners. Through the PACE program, homeowners can purchase energy-efficient equipment through a non-ad valorem assessment that is repaid through the homeowner’s annual tax bill. There is no upfront cost for the homeowner, but a lien is then placed on the property equaling the value of the improvements, then assessed and added to the future property taxes. There are some considerations and concerns surrounding the program.

Underwriting Issues

With these PACE programs, the lenders are not thoroughly looking at the owner’s financial ability to repay these loans. They are m looking at your history of re-paying your mortgage and the equity in your home.

Lender Concerns

PACE Providers have not been upfront in explaining that the lien placed will likely inhibit any additional bank financing while the lien is still on the property. Lenders are rightfully concerned because the lien can potentially impair their rights as the lienholder. Certain banks will not back mortgages that currently have a PACE lien against them.

Sale of Property

If the property is sold, the lien may need to be repaid in full before the home is sold.

Loan Disclosures

The PACE loan providers slickly gloss over the details and critical implications of agreeing to the loan. In their agreement, PACE states that they have a right to foreclose upon their investment if there is a failure to pay. Therefore PACE can take the property away from the homeowner.

Contractor Issues

The PACE program does not install the solar panels themselves. They hire contractors, which does not guarantee that the contractor is reputable or responsible. There have been several circumstances where the contractor does not complete the project correctly or even walks away from the project, and the homeowner is still liable for the lien on their home.

Get Representation

Let our experienced and dedicated attorneys at the Florida Construction Law Group help you with any questions or issues you may have surrounding the Florida PACE program or its loans.

06Jun 2023

Construction contracts require meticulous planning and negotiation. Each party has a goal to get the job done, but what this looks like and what it will take to get there may look different to each party.

In negotiating a contract on your next Florida construction site, there are certain details that are often overlooked and taken for granted. Every detail of a contract matters, otherwise you end up in mediation to deal with disputes that arise later. Read on for a few key elements of a construction contract that you should never overlook.

How disputes will be handled

Contract disputes happen. We know because we handle them on a regular basis. So, how do you want those disputes to be handled?

Both sides should be aware of the proper channels to handle a dispute. A failure to address this in your contract means you will be forced to be reactive instead of proactive.

There could be ways to ensure the work continues while disputes are handled by project management. Forced arbitration is a popular option, though this may need to come with concessions depending on which side prefers to go that route. Keeping your project out of the courts could benefit both sides and prevent long and damaging delays.

Specific project schedules

Any contract can indicate when a project will start and when it should be completed, but it’s important to take the time to nail down projected dates for stages in the construction process. This is especially important for larger construction projects that may take months or even years to complete.

Draw requests are often based on these dates, and if you over or under-estimate the timing of each stage of a project then you can end up in dispute. Work diligently and honestly to determine realistic target dates.

Force majeure provisions

Schedules can only go as far as nature allows. Even the most fastidious project managers will fall off track if an act of god disrupts the work. This has become especially relevant in the wake of the COVID-19 pandemic.

Natural events like hurricanes, other weather events, and viral diseases put the health and safety of workers at risk. You can’t force workers to move forward in unsafe conditions, but you also have deadlines to hit. A force majeure provision is a sensible middle ground that allows workers to stay safe and prevents liability when unforeseen, uncontrollable events delay the project.

Keep your attorney closeConstruction contracts will benefit from the meticulous attention of a construction law attorney. At Florida Construction Law Group, we have the experience and expertise to help you navigate the contract negotiation, renegotiation, litigation, and mediation process. Get our team involved early and we will work with you every step of the way.

09May 2023

The health and long-term viability of almost any business is heavily connected to its insurance policies. Because there are so many types of businesses in the U.S., the types of insurance policies that exist to protect businesses are also numerous. It can therefore be confusing to know which policies your business needs. 

Construction companies and contractors have unique liabilities that require a thoughtful and detailed insurance coverage strategy. The specific policies your construction business needs can vary depending on the scope of each project and the characteristics of each project owner, but it can be wise to purchase the following:

1. Professional liability insurance.

Just about any business that employs licensed professionals—such as a physician’s practice, law firm, or accounting firm—carries this type of insurance that is sometimes referred to as errors and omissions insurance. As that name suggests, this insurance policy can step in when contractors commit errors that cause financial loss to clients. It often covers breach of contract, missed project deadlines, and services that were promised but not provided.

2. Workers’ compensation.

Some companies are not required to carry workers’ compensation for employees if the company employs a small number of workers (the exact amount varies by state). The elevated risk of injury on a construction site, however, means general contractors are hardly ever exempt. In Florida, contractors with one or more employees are required to carry this policy, which covers medical costs and partial lost wages when a worker is injured on the job. 

3. Subcontractor default insurance.

In lieu of surety bonds, which are usually required for public construction projects, larger general contractors may instead purchase a subcontractor default insurance policy. This policy will pay the contractor after three things happen: a subcontractor defaults on its duties, the contractor selects a replacement subcontractor, and a deductible is paid by the contractor. The deductibles are often large, but the terms may be more convenient to contractors than those of many surety bonds. 

4. Inland marine insurance. 

This policy has nothing to do with water-related projects. It does cover movable property, equipment, and materials that may “float” or be transported between job sites. Generally, inland marine insurance covers equipment and materials that are in transit to or from a job site. This policy can fill in the gaps for property insurance, which covers many fixtures of a permanent physical location.

5. General liability insurance. 

This policy is used by most construction contractors. General liability insurance usually covers losses in several different areas, including injuries incurred by non-employees on the project site, property damage to a client’s property, and even advertising injury. It can also cover legal fees that may associated with such incidents.

A construction contractor that has adequate insurance policies should be able to feel secure in the event of a covered loss. After paying your premiums on time and notifying your insurance provider of an incident, you have nothing to worry about, right? Unfortunately, the answer is not always clear. 

An experienced construction attorney can fight for the outcome you and your business deserve in the midst of any disputes. Our firm would be happy to discuss your situation and advise you on sensible steps moving forward in a wide range of legal areas. Call us at (305) 227-4030 for a consultation.

12Apr 2023

Construction projects shape our communities. The homes we live in, the businesses we buy from, the places our children learn and play, and more. This, of course, makes avoiding mistakes imperative to ensure the protection of our communities and the people living in them.

Mistakes are a reality in any line of work. They are going to happen, and we must recognize that in order to mitigate the risks that come with those mistakes.

Construction defects can put construction workers and the individuals who eventually occupy a building at serious risk – both physically and financially. Exploring the common types of defects that pop up in construction allows us to be keenly aware of and prevent them.

Design Defects

The most obvious and common defect comes before any equipment or supplies are ever ordered. Architects and engineers must work together to ensure the vision they have for a project can actually be reproduced in reality.

These are trained professionals, often with decades of experience. Understanding the functionality of a design can prevent major design defects. Common design defects include:

  • Lack of structural integrity
  • Mechanical and electric issues
  • Lack of heat and moisture control

Material Defects

Once a design is complete, the construction team will work to order the necessary materials to complete the job. This presents another opportunity for defects to become present on a construction job.

Ordering the correct materials will prevent issues, but this is a unique challenge. Having a vision for a construction project is one thing, but turning that vision into reality with physical materials requires careful attention to detail. Common material defects include:

  • Damaged or broken materials implemented into a project
  • Mismatching materials
  • Poor waterproofing
  • Cutting corners with too little or too much material
  • Using inferior products to cut costs

Construction Defects

Each of the above defects is an example of a construction defect, but the actual construction of a project can lead to some of the most common defects. Proper workmanship will be an integral element of any project.

Experienced teams and workers understand the importance of every element of the job. Working with a team you know and trust can help avoid these issues. Common construction defects include:

  • Opting for inexperienced contractors who aren’t ready for the job
  • Failure to properly seal windows and doors
  • Shoddy roofing
  • Shoddy drywall
  • Working too fast to catch mistakes

At Florida Construction Law Group, we have been on both sides of a construction defect. We understand the challenges workers face in shaping our communities, and we understand the devastating impacts a defect can have. Whether you are the victim of a construction defect or need to defend yourself against claims you were responsible for a defect, contact our team today.

06Mar 2023

As we have previously discussed on the blog, disputes in a construction project can derail the entire project and put multiple parties at risk of losing out on serious cash flow. Common or minor disputes can quickly grow and halt work.

There are numerous ways to solve a construction dispute, including arbitration which we covered in January. Mediation is another great alternative that allows you to bring in a third party to help you navigate these issues and get impartial suggestions on what to do next. At Florida Construction Law Group, we can work as a mediator and believe this is a great tool to continue the work being done and paid for.

Mediators Are Independent Third Parties

Like arbitrators, mediators provide an independent review of the situation. You will get in a room with the other party and the mediator to discuss what the issue is, what the possible causes are, and what solutions have been considered.

Some people believe that because one party reached out to the mediator themselves that the mediator will side with them. We can assure you that this is not the case. There are numerous laws that prevent mediators from choosing sides and being partial.

You will receive honest and considerate advice to address your Florida construction law dispute.

You Hold the Power

Unlike arbitration, mediation is not legally binding. The decisions and insights provided by a mediator are merely suggestions for how the two parties can and should proceed. However, if one or both parties disagree with the suggestions of the mediator then the parties can look for alternatives to resolve their disputes.

Mediation is generally a preferred method early on in a dispute as opposed to arbitration which should often be a last resort if the parties wish to proceed but cannot agree on how that will look.

Cheaper and Quicker Alternative to Other Solutions

You could go all the way through the courts to litigate these issues or even go through arbitration, but both of these processes are time-consuming and expensive. As you know, time is money in the construction business. The longer these issues drag out the longer the construction project is delayed and at risk.Our team wants to be a part of your solution and allow you to continue improving Florida’s communities through hard work and dedication. If you are having trouble resolving a construction dispute and need to bring in a mediator, make our team your first choice. You can contact us online or call us at (305) 227-4030.

15Feb 2023

Entering into business with a construction contractor is often much more complicated than what many people presume. Besides disagreements between project owners and contractors over the quality of work performed, most other conflicts between these two parties come down to money. A relatively new type of financing for some home improvements, PACE, is causing some headaches for homeowners in Florida.

What is PACE Financing?

PACE (Property Assessed Clean Energy) financing is a unique financing structure that allows homeowners and other property owners to pay for renovations as an extra line item on their property taxes. This financing is technically not a loan; the capital needed for each PACE project is paid upfront to the contractor, arranged for by organizations like Ygrene.

Ygrene enlists the help of contractors to sell projects paid for through PACE financing. A common type of home improvement project that uses PACE financing is solar panel installation. Salespeople inform homeowners of the benefits of PACE financing, including the ability to transfer the debt to buyers if they sell the property, delay payment for up to 12 months (or whenever the next set of property taxes is due), and save money through lower energy bills.

Plenty of homeowners have realized great benefits through PACE financing. Conversely, though, many feel they have been duped by Ygrene

The primary complaint is that consumers were not informed that receiving a project through PACE financing means a first-priority lien will be placed on their home until the project has been fully paid off. In other words, homeowners may experience foreclosure if they fall behind on their bills that coincide with property taxes. What’s more is that homeowners are forced to pay their PACE financing obligations in the event of a forced sale; that money cannot even go toward the property’s mortgage.

If a sale is not forced through foreclosure, homeowners might not ever be able to sell their property. Many mortgage lenders will not lend to buyers who wish to purchase a property with a first-priority PACE lien. Complicating matters is the fact that contractors are often awarded finder’s fees for selling PACE projects, presenting a potential conflict of interest.

Understand Your Contractor’s Terms

The most important tool for homeowners and consumers before beginning a home improvement project is information. It is important to understand exactly how you will be billed, the interest rate, and any liens that will be placed on the property. Solar panels are attractive to homeowners and entrepreneurs due to decreased energy costs, but the PACE financing often attached to such projects can be troublesome.

In the event of a dispute with your contractor, your greatest tool as a homeowner is an experienced Florida construction attorney. The earlier you consult a trusted firm like Florida Construction Law Group, the better your chances of outright prevailing in your case. In any situation, our team will work tirelessly to resolve your dispute as efficiently as you’d like. Call us at (305) 227-4030 to discuss your legal needs today.

09Jan 2023

Contract disputes are often best resolved through alternative dispute resolution (ADR) methods, and construction disputes are no exception. The two most common ADR methods are mediation and arbitration, the latter of which is often considered to be the happy medium between informal mediation and often-costly litigation.

Greater Control of Intermediary

Arbitration shares features of mediation and litigation. Arbitration is similar to mediation because the two disputing parties have some control over who eventually occupies the position of arbitrator. Sometimes, a panel of arbitrators will function as the intermediary in an arbitration.

Parties will often choose an arbitrator or arbitration panel from the American Arbitration Association (AAA), which prescribes unique procedures for construction disputes that are better suited for the industry. Accordingly, arbitration offers parties an opportunity to select an arbitrator who is actually knowledgeable about their specific industries. In litigation, you risk being assigned a judge who is not familiar with the construction industry, its common types of disputes, or best practices.

Customizable Discovery and Preliminary Procedures

In contrast to the relatively rigid procedures in civil court, parties in arbitration may choose to forego certain customs in favor of an expedited timeline and lower costs. For instance, upon the approval of both parties, an arbitration might disallow live witness statements in front of the arbitrator and instead rely on document exchanges. Or, you might want to keep as many formalities as possible so your arbitration process more closely resembles litigation. The money at stake in your dispute will likely play a large part in these decisions.

The Hearing

Both parties will go before the arbitrator or arbitration panel and present their side. Again, the extent to which each party will be able to question the other side and present certain types of evidence might be limited by a prior agreement. The hearing date will be agreed upon by both parties, another advantage over litigation.

One often-misunderstood part of arbitration? The decision reached by the arbitrator or arbitration panel is legally binding and generally not eligible for appeal except in special circumstances. This can save time and money by preventing appeals, which are typically available in litigation. Another feature of arbitration is that the process remains private. Litigation is usually a matter of public record.

Look Over Your Contract

Mandatory arbitration clauses are increasingly used in construction contracts. Many parties who end up in a dispute are surprised to learn they are required to resolve things in arbitration. Arbitration is not always better than litigation, especially when an especially large sum of money is at stake.Whether your construction dispute is to be resolved via litigation or arbitration, an experienced Florida construction attorney is critical. Our team has deep experience representing clients in a wide variety of construction and real estate matters. We would be more than happy to evaluate your situation and work with you to put your legal issues behind you.

08Dec 2022

“Blood, sweat, and tears” is a generic phrase, but it’s exactly what contractors genuinely put into Florida construction projects. Construction workers are some of the hardest-working people among us, and they deserve to be paid for their work. Unfortunately, sometimes their paychecks come up short or wires get crossed which can result in a lien on the property being worked on.

A construction lien is a tool to protect the pay of those working on the project. We previously talked about how these work and briefly touched on the release of lien process, but we want to dive deeper into how you can get these liens released to cut any of the strings attached to a project or property.

Rights to Lien Cannot Be Waived

First and foremost, you won’t be able to go into a job without lien rights remaining intact. Florida law prevents construction workers from waiving these rights in order to protect them from unfair labor practices or negotiations. Florida law specifically states “a right to claim a lien may not be waived in advance. A lien right may be waived only to the extent of labor, services, or materials furnished. Any waiver of a right to claim a lien that is made in advance is unenforceable.”

If you are a construction worker and are being asked to waive this right or feel like an unwillingness to do so has cost you a contract, you should work with an attorney to recoup what you lost in the process.

Filing a Release of Lien

The official process of removing a lien will be through filing a release of lien. This is a common practice that will be used to confirm the circumstances that led to the lien either never happened, were misleading, or have been remedied and are no longer present.

In remedying the lien, there are two options: releasing the lien after a “progress payment” or after the unpaid amount has been paid in full. The statute linked above provides a specific form that can be used for these waivers:

WAIVER AND RELEASE OF LIEN

UPON PROGRESS PAYMENT

The undersigned lienor, in consideration of the sum of $ , hereby waives and releases its lien and right to claim a lien for labor, services, or materials furnished through   (insert date)   to   (insert the name of your customer)   on the job of   (insert the name of the owner)   to the following property:

  (description of property)  

This waiver and release does not cover any retention or labor, services, or materials furnished after the date specified.

DATED on  ,   (year).       (Lienor)  

WAIVER AND RELEASE OF LIEN

UPON FINAL PAYMENT

The undersigned lienor, in consideration of the final payment in the amount of $  , hereby waives and releases its lien and right to claim a lien for labor, services, or materials furnished to   (insert the name of your customer)   on the job of   (insert the name of the owner)   to the following described property:

  (description of property)  

DATED on  ,   (year).       (Lienor)  

Proving Timely And Accurate Payment

Of course, there’s a chance the lien wasn’t necessary in the first place. Construction companies should keep accurate and consistent records of all contracts, payment/draw schedules, draw requests, and actual payments. If you’re running a construction job and are able to prove that payments were actually made in a timely manner based on the contract that was signed then you can secure a lien release without requiring the other party to agree.At Florida Construction Law Group, we have worked with both sides of construction liens. We understand the perspective of contractors who haven’t been paid for their hard work, and we also know these can occasionally happen without merit. It’s important to ensure liens are only placed on property when necessary and that they’re remedied properly. Contact our firm if you need help filing or dealing with a construction lien.

01Nov 2022

General contractors work hard to get the money they’re owed to complete a project in a timely manner. Draw requests play a key role in making sure that is possible, but when a draw request dispute arises it can delay the project, make the project more expensive, lead to loss of labor, and more.

At Florida Construction Law Group, we handle these disputes to make sure contractors have the funds they need at the time they are supposed to get them. We fully understand the risk these disputes create for any project. There are several steps you and your team can take to avoid these disputes.

Set a Clear, Reasonable Schedule

These contracts are set on a schedule that dictates when and how draw requests can be made. However, it’s not as simple as setting dates and times for these payments but about paying out draw requests as the project progresses. Once work is completed and confirmed to be completed then the draw request for the next step of the project can be made and fulfilled.

Understanding this schedule will help you avoid disputes down the line. You need to make sure you understand each part of the schedule negotiation, what work is expected of you and your team, and other details within the documents. Be sure to keep any agreements in a secure and accessible place so you are able to review any details you need down the line.

The “reasonable” portion of this is also imperative. Both sides should go into the project with realistic expectations about what the work is, what it will take to get it done, and when it should be done. Everybody wants quick work but what everybody needs is quality work. You shouldn’t be forced into a contract that expects you to complete the work too quickly or that separates the funds out to a point where you won’t be able to purchase the necessary equipment, tools, and supplies for that portion of the project.

Keep All Receipts

Record-keeping on any project is a must. You can’t expect to be paid for your work or settle disputes down the line if you don’t have evidence of what’s being done. If you have an invoice for any previous draw request as well as any receipts for work done then the draw request process should move quickly.

Any contract will clearly state that proof of completion will be necessary to execute a draw request. The more organized and thorough your records are the quicker draw requests can be completed.

Document and Explain Changes

Any experienced contractor knows construction projects generally face a few changes. These changes are nearly inevitable but they’re also understandable. However, changes could derail the draw schedule you’ve already agreed to which is why documentation of these changes is necessary.

You and your team will need to showcase the reasoning for a change which could be related to weather, supplies, funding, ownership, or another unforeseen circumstance. When this happens, you will file a change order that explains the reason for the changes, what the changes are, and what additional costs may be associated with the change.If you’ve taken these steps then your project and draw schedule should be able to move forward without any disruptions. However, even the most thorough project can end up with disputes for various reasons. Contact the team at Florida Construction Law Group if you’re dealing with a draw request dispute that is disrupting your ability to do your job.

15Oct 2022

We all need to work to make a living. In some professions, taking on every job that comes your way may be the best avenue to financial security for the whole family.

Some construction companies may take this approach, but there comes a time when a project and your company aren’t a match. There’s nothing wrong with saying no – and we want to explore some things you should look out for before signing any contracts.

The project doesn’t fit your portfolio

Have you grown a successful construction company with a ton of big projects in your portfolio? If so, it might not make sense for you to take on small home-improvement projects or the like. You may not want to tie up resources in smaller projects in case a large project comes along that you want to put your name on. It’s also logical that you may be too expensive for someone looking for small projects.

The same is true for the opposite – if you’re a small construction company just getting off the ground it might be sensible to avoid biting off more than you can chew. You have the experience and knowledge to get the job done, but you might not have the staff, materials, or finances to compete with bigger companies at this point. There’s nothing wrong with this. Those bigger companies started off in the same place you did.

Too good to be true

We all want that one big project that puts us on the map. It can be tempting to take the big, shiny project that hits our desk right away – but tread carefully.

Some projects genuinely are too good to be true. A quick and easy project promising big money? A massive project hoping to hire a small or new construction company? These can be signs there’s something missing behind the scenes. It’s important to thoroughly vet each project to make sure you’re not being put in a position to fail before you even start.

Your team is stretched thin

Burnout is a major problem in many industries, but the physical toll construction projects take on workers can be detrimental. If you’ve been constantly shifting from project to project recently it may be sensible to pass on a project or two so your contractors and workers aren’t pushed beyond their limit.

Burnout leads to mistakes. Mistakes in construction can lead to lawsuits, injuries, or worse. Be sure to take the pulse of your team before committing to that next big project when you’ve been booked up recently. Another option is to hire a separate team of contractors who haven’t been as busy lately – even if you’re not as familiar with them.Your experience in construction should tell you when a project isn’t the right fit for you and your team. There are many reasons to consider taking on or turning down a project depending on the circumstances at that time. If you’ve recently signed a contract but realized it’s not going to work out or need help negotiating a legal and feasible construction contract, contact Florida Construction Law Group today.

15Sep 2022

Construction projects require significant attention to detail to ensure quality control across the board. There are many layers to a construction project, so it’s important to be sure every member of your team is in sync with the details and expectations of the job.

If a homeowner feels a job wasn’t done up to standard and files a claim over defects such as roofing issues, improper materials, or, even worse, a personal injury, then your reputation can immediately go out the window. Florida construction contractors, sub-contractors, material men, and workers bring important experience to every project and one mistake shouldn’t upend a career of good work. Still, that’s the reality of the business at times, so it’s imperative that the whole construction team put time and effort into avoiding defects.

1. Document and review all contract details

The contract process should lay out the expectations of the job. This is an opportunity for the construction workers and property owners to put forth any specifications for the job at hand. This can include expectations of the materials used, present problems that need to be remedied, and other necessary details.

You and your team should be aware of every relevant detail in the contract. Some contracts may seem standard and every contract will include some standard language, but a thorough review may find that the contract requires specific products or materials. Any unusual request in a contract should be acknowledged and adhered to in order to avoid issues down the road.

All efforts to follow through with contract details should be documented, and any reason contract details cannot be honored should be taken up with the property owner prior to any final decisions being made. Even if a contract detail is unreasonable or unviable in your project, you are still legally bound to it until the other party agrees to alter the contract.

2. Don’t be afraid to start over

Nobody on a construction site should be cutting corners. It can be tempting to get the job done early to satisfy the customer or to let a small error go by covering it up. Unfortunately, the costs of a defect being caught later in the process are exponentially greater than just scrapping the part of the project where the error is and starting it again.

The risks to your finances and reputation are too significant to try and get away with cutting corners. Even if the property owner isn’t knowledgeable about construction and the project at hand, it seems every defect eventually comes to light. Take the time to get it right at every step.

3. Constantly review the project

Once the work starts there’s this itch to keep going and get the job done. That’s because construction workers are some of the hardest workers in America. They’re literally building our country.

With that said, sometimes it’s good to slow things down and review all recent work on the project. This can be done by one manager or a quality control team established at the beginning of the project (the more eyes on a project the better). This could be something members of the quality control team do at the beginning and/or end of every day or it can be done as a phase of the project is completed.

However your team decides to do this, it’s important to be consistent and not be afraid to take a pause to ensure nobody is building on a mistake. Mistakes have a way of compounding on construction projects.

4. Call an attorney

You shouldn’t be subjected to claims against your hard work that are malicious and invalid. Any construction team should have an attorney they know and trust to write and review contracts and to step in when you’re accused of wrongdoing.At Florida Construction Law Group, we represent both construction workers and property owners in defect cases. We understand the law and when a defect is actually present vs. when a claim is misguided. Contact our team if you need help taking care of a claim.