CASEYFRANK

CONSTRUCTION WITHOUT CONFLICT

Homeowners spent over $130 billion on remodeling alone in 2003, according to the Joint Center for Housing Studies at Harvard University. Building owners often find the construction process difficult to understand technically, or just plain overwhelming. In turn, Contractors often find it difficult to deal with customers, who may have unfounded expectations, or fail to communicate their goals clearly. People on both sides of this relationship have their horror stories, but there are ways to prevent these disputes.

How Customers Avoid Problems

Know What You Want

This is the most important action to take, yet is so simple it seems silly. But nothing causes more grief. If consumers don't know what they want, they can't expect someone else to create a pleasing environment for them? The ultimate standard by which any construction is measured is whether it pleases the occupants.

Talk with your family and partners, struggle over the design, and then forge a consensus. Then tell it clearly -- and often! -- to the building professionals. Don't assume they have considered everything. Never assume anything -- except a 3% mortgage.

Have a Budget

There is no one "right" way to do something without reference to money. The appropriate way to build a $10,000 kitchen differs from a $100,000 one. The "best" means the best in the context of the quality of the project as a whole, or in the case of renovation or restoration, the state of the existing structure.

Investigate

Ask for referrals from satisfied customers or your architect. Ask for references, call them and discuss the project in detail: Not just a subjective "were you satisfied," but also ask objective questions about quality, timeliness, communication, and problems.

If a construction project is financed, ask your lender, they may have recommendations as to contractors. architects, and building consultants or inspectors.

Check with the BBB. Check with the local or state Department of Consumer Affairs. Find a contractor who is licensed. A licensed contractor is regulated, meaning that the licensing agency can control them to a degree, though not all locales require licenses.

Chose a contractor with experience building your type of project. Inquire as to how many projects are in progress, and be sure they can meet your timetable.

Don't Mislead

If you are still trying to make up your mind and aren't sure whether or not the project will actually be built, say so. If you are getting other bids, say so. You won't elicit honesty if you don't give it.

Pay on Time

This is the cause of much friction. Have a payment schedule tied to work completed.

How Contractors Avoid Problems

Be an Educator

You know what you are talking about, but the building owner or customer may not. Many customers avoid to ask questions, fearing it makes them look ignorant. Reach out and help your clients understand the process technically and socially.

Disclose Your Overall Timetable

If you have many irons in the fire, let potential clients know that. If they need to wait for a different time-slot, give them the opportunity to chose it, and increase the probability of a mutually satisfying project.

Guarantee Your Work

Have materials and labor covered by warranty. Some guarantees come directly from the general contractor, and some of them from subcontractors or suppliers. Whatever the source, provide some technical continuity to all the work.

How Everyone Avoids Problems

Make a Record

Most conflicts come from lack of clarity and communication, not from fraud. An oral agreement is only worth the paper it's printed on because it easily leads to confusion about what was said. Consider using the contracts published by the American Institute of Architects. If it is a sizable project, spend an hour of an attorney's time to review the contract before signing. Of course, never sign anything with unacceptable conditions in it because it is the industry "standard language." Believe what you are signing. It is of no benefit to anyone to sign an agreement that says one thing, but believe it means something else.

Know the Roles

Many separate, yet closely related, relationships exist during every construction project, such as between owners and developers; architects; general contractors or construction managers; subcontractors; material and equipment suppliers; consulting engineering; bonding or insurance companies; lenders; and inspectors. Any of these participants can have one or more contractual relationships with differing duties and obligations.

Know the Law

There are also numerous regulations which apply: Environmental laws; OSHA requirements; zoning restrictions; building codes and ordinances; mechanics' lien laws; labor and union rules; and various licensing statutes. There may be special laws that apply on, e.g. lead paint or expansive soils.

Spell Everything Out

If the parties don't invest in a complete design package (blueprints, technical specifications, & clear contract terms), then different bids from different contractors will not be directly comparable. Neither will any bids be stable, because contractors and consumers will inevitably make divergent assumptions about unspecified issues. It's called wishful thinking.

A good contract helps address likely problems, and allocates risks and responsibilities. Construction litigation usually results from unanticipated problems and unallocated risks and responsibilities. A "tight" contracts attempts to think of everything. A "flexible" contract is more amenable to modification, but the parties must live with financial risks that are less predictable. The parties must decide whether predictability or creative flexibility is a priority.

How to Deal with Conflicts

The large amount of money, the disruption to life schedules (especially when a home is renovated), and the disparity in positions between contractors and customers unfortunately may lead to passionate feelings, and a breakdown in communication. If trust and mutual aspirations are completely destroyed, a customer may fire a contractor, or visa-versa, and litigation can result.

Before going to court, a mediator or arbitrator can often help the parties resolve the conflict. An arbitrator is really a private judge who will receive the facts, hear everyone's arguments and then make a decision, which can enforced in court if necessary.

A mediator will work with the parties to resolve disputes, and help them to find common ground. In the midst of a construction project, mediation is often preferred because work remains to be done. Mediation attempts to restore communication, reduce unwarranted expectations, and reconcile the parties. If construction is over, and the dispute is only about how much money should be paid or refunded, then arbitration is an equally viable option.

When I am approached by the parties to a construction dispute, my first goal is to avoid litigation, which is an expensive and adversarial conclusion to what started as a mutual building effort. Of course, it cannot always be avoided. My next goal is to listen; to appreciate what is essential to each party; to separate out what seems negotiable; to communicate each side to the other; to find the common ground; and to try to restore enough of a working relationship to see the parties through to the end.

I work as an expert witness in construction litigation, both as a technical and as a legal witness. As a former craftsman, I am appalled by shoddy work. As a former builder, I appreciate the complex choreography of contracting. As a building inspector, I understand the technical aspects of buildings. As an attorney, I can integrate the many related legal issues. This enables me to encourage the parties to arrive at a balanced, complete solution to conflicts.