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5 Ways to Avoid Disputes in the Construction Industry | John Toohey

5 Ways to Avoid Disputes in the Construction Industry

Over the last 18 years, I have had the privilege of representing homeowners, developers, general contractors and subcontractors in a very wide variety of disputes that require construction litigation – everything from single-family homeowners to the largest condominium and apartment projects on the west coast.  And, I can tell you after all these years that there exists a similar common set of themes.  I can also tell you that avoiding these mistakes is not a panacea, but it will give you a distinct advantage going forward:

  1. Always Get A Contract

I know, sounds simple this day and age.  However, I cannot tell you how many times I have represented homeowners and contractors that were operating without a contract.  Having a contract binds the parties to operate under the terms of the contract – what the contractor will do, how much you will get paid, when you will get paid, etc.  Not having a contract leaves all of these issues wide open.

  1. Read The Contract

Again, I know, sounds simple, right?  I have represented hundreds of subcontractors that had no idea how much they would be obligated to pay if things went wrong – and things often go wrong in large projects.  Understand what types of warranties/promises you are making and understand in what situation you be obligated to pay for damages and attorney’s fees.  Same with homeowners – know exactly what your contractors are doing, what they are not doing and what they are subbing out to others.

  1. Do Your Homework

Homeowners, please use www.cslb.ca.gov before you agree to start any project.  Confirm that your contractor’s license is valid and up to date.  And, this is important, make sure they are licensed to perform the work you are asking them to perform.  Contractors – find out if the homeowner has been litigious and if they have sued contractors in the past.  It is easy to run a check with the local Courts.

  1. Get Insurance

More often than not, even in this highly litigious environment, I represent parties that are not insured, under-insured, or find out the other side has no insurance.  All parties should do two simple things: 1) make sure that the insurance obligation is clearly spelled out in the contract; and, 2) make sure all parties exchange insurance dec pages as proof of insurance before the project starts.  And, owners and developers – make sure you are identified as an additional insured on the dec pages from the general and the subs.

  1. Talk, Meet, and Follow Up

So many disputes can be avoided when both sides meet to discuss any issues, and when the contractor makes all efforts possible to correct the issue.  So many times in the past I represented contractors that were never contacted to fix something that they would have been more than happy to fix.  Same with homeowners – I represented homeowners in lawsuits that could have been avoided because they could not contact their contractor to fix their problem.

John Toohey is a Partner with the law firm of Bremer Whyte Brown & O’Meara and can be reached with further questions at jtoohey@bremerwhyte.com or (949) 221-1000.