In spring of 2007 William and Kristen Bachman decided to remodel their home in North Haven, CT. East Coast Custom Builders got the job for $77,244.50, including a $25,748 deposit. But when East Coast came by the Bachmans’ home to get a signature on the contract, there was a problem. Kristen didn’t have the $25 thousand ready. That was June. Six weeks later, the Bachmans had the money, signed the June contract, wrote a check and East Coast started work. So far, so good. At least so it seemed.Continue reading
Craftsman Book Company
In the construction industry, the unexpected tends to be expensive bad news. And with every surprise comes an obvious question, “Who’s going to pay?”Continue reading
We can agree that consumer protection laws serve a useful purpose. But laws too complex invite evasion. California’s home improvement contracting law is a poster child for that proposition. Most contractors don’t comply simply because they can’t figure out what the law requires. California’s CSLB assesses fines (“civil penalties”) against contractors who don’t comply – but does very little to make compliance easy.Continue reading
Last month I listed advantages of construction management (CM) contracting over traditional general contracting. For example, construction contracting is a highly regulated occupation – liens, payments, codes, inspections, bonding, insurance, etc. CM contractors avoid most of these headaches. But if your state requires construction contractors to be licensed, do CM contractors need a license?
When you hear the term paper contractor, it’s usually in the context of someone being “only” or “just” a paper contractor. I believe this prejudice against general contractors working as consultants is breaking down. And for good reason.Continue reading
If you haven’t been asked to sign a “green” construction contract yet, I expect it will happen in 2011.
LEED (Leadership in Energy and Environmental Design) standards encourage conservation of resources through better design and construction of commercial and residential buildings. LEED is a voluntary program. But about a quarter of all construction now incorporates LEED standards. California’s new Green Building Code (effective 1/1/11) is sure to raise that percentage.
On January 1, 2011, Arizona will join a growing list of states that offer an effective remedy against slow payment on private construction contracts and subcontracts. If you build in Arizona, or in any of the other states with a prompt payment statute, you should understand how to preserve and enforce payment rights.
Nine states place limits or impose restrictions on advance payments for some types of residential construction. If you have jobs in any of these nine states, you walk a fine line when asking for a down payment: Arizona, California, Indiana, Maine, Maryland, Massachusetts, Nevada (pools only) Pennsylvania and Tennessee.
What’s wrong with A.I.A. contracts? Nothing, unless you’re a construction contractor. I’ll explain.
The A.I.A. published their first “standard” construction contract in 1888. As a construction contractor, you’ve probably seen several A.I.A. contracts. Go to the A.I.A. site and you’ll discover that A.I.A. contracts are “accepted, reliable, fair and flexible.” Fine. But here’s what the A.I.A. doesn’t explain. A.I.A. construction contracts don’t comply with either state or federal disclosure law. In most states and for most jobs, a contractor who works under an A.I.A. contract risks serious legal trouble.Continue reading
Has there ever been a construction project that didn’t require at least one change?
A contractor can go an entire career without seeing a job like that. And for good reason. Construction is too permanent and too expensive to resist making a change when the need is obvious. Take this as carved in granite: Changes are endemic to construction. That’s not going to change. Accept it. Welcome it! Changes should be a profit center for construction contractors. I’ll offer seven rules designed to make that happen.