Large and small construction projects have and will continue to perform well with workers and management following CDC and OSHA protocols. If you have been considering building, these 12 tips will reduce your risks, whether during the pandemic or otherwise. As world supply chains and local labor supply may delay “on time” performance, being diligent and sharing accurate information will help everyone adjust and complete work.
1. Pay for Work Performed and Materials Purchased. No “Upfront Money.”
If your contractor needs money to start your project and cover future labor costs, there may be a cash flow problem. If you are paying for materials prior to delivery, use a joint check payable to the contractor and supplier/manufacturer and require delivery to your jobsite.
2. Do Work Correctly the First Time.
A quality project starts with the first subcontractor setting the standard that later trades follow. Shoddy work should be rejected.
3. What is Unique on this Project?
Have your architect, contractor and subcontractors previously worked with your design, specified materials and systems? There is a learning curve when using new materials and systems.
4. Allowances are a Placeholder for Money.
Allowances for cabinets, fixtures and finishes change based upon what you choose. What you want may often exceed your allowance and budget. Understand what materials and costs are fixed and what will change based upon your selection.
5. Require Written Contracts – Written Change Orders.
When Owners provide plans and specifications, they warrant they can be followed by the Contractor without conflicts, errors or omissions. Contractors need to notify the Owner and document those conflicts, errors and omissions. Changes to the contract need to be written, identifying the changes and the new costs to perform. Contracts should include an indemnification clause and insurance requirements protecting the Owner. Identify whether the Owner or Contractor is providing Builder’s Risk coverage if rain, wind or fire damage your project. Retain ten percent (10%) of each progress payment until substantial completion and retain 150% of the cost to complete the punch list. Retention can be reduced at fifty percent (50%) completion for timely performance.
Agree upon a reasonable but certain time for substantial completion and punch list. Retention and Liquidated Damages for late completion motivate your Contractor and subcontractors to finish. Without an agreed “liquidated” sum for late completion, Owners may not recover any compensation for delay damages.
6. Require Regular Accountings by Contractor.
Your Contractor should deliver a complete accounting, including changes, with each request for payment. Owners need to review and approve. Know the status of your work, the budget and changes.
7. Use a Mechanical Engineer for HVAC Design.
In addition to structural, civil and electrical engineers, a good set of plans needs an HVAC engineer. Neither the architect nor the subcontractor should design your HVAC system. Hot summers and cold winters require professional design.
8. Be a Knowledgeable Consumer.
Learn about alternative materials, systems and finish choices. The standard, less expensive material is often specified without question. If you are buying for the long term, align your goals with the design and specifications. Review your choices with experienced architects, contractors, suppliers or manufacturers to understand what you are buying, including proper design and installation requirements.
9. Do not Sign the Standard Contract Form.
Have an experienced lawyer review the details. Mediation and arbitration are good alternatives to litigation but not if the developer/builder chooses the arbitrator or you waive your rights to damages or attorney’s fees.
10. Take Pictures as Work Progresses.
Digital cameras easily capture all work as performed. You will never see the inside of your project again. Require final “As Builts” by the contractor / architect.
11. Require Lien Waivers from Subcontractors and Suppliers.
An owner-occupied residence can be liened only if the Owner signs a written contract. Nevertheless, preliminary lien notices tell Owners the potential amounts to be paid subcontractors and suppliers. For all other projects, require signed lien waivers using the Arizona statutory form from all subcontractors and suppliers as payments are made. Otherwise, you may pay twice.
12. Following CDC and OSHA Guidelines.
Good construction crews adapt to project requirements. Social distancing and wearing masks increase the likelihood your workers will perform today and tomorrow. Expect there may be times work may be delayed due to workers’ exposed to COVID-19. If so, everyone needs to promptly share needed information, adapt and adjust.
If you need guidance on any of these twelve tips or training as it relates to OSHA or CDC contact the Construction Lawyers at Mesch Clark Rothschild to assist to minimize your risk as it relates to your construction project.
