February 24, 2020
Pearson Legal

Planning for a Successful Commercial Construction Project

Are you developing a public or private commercial property?

The most essential part of the development process is to be absolutely certain that the contract you enter into with any design professionals or contractors includes provisions to protect you from liability or financial impact in the unlikely event of design or construction defects.

commercial office buildingWhat are some common defects?

Architectural and engineering errors: These include flaws in the building design and specification of materials not suited for the particular construction project.

Defects caused by poor construction practices: These include poor workmanship or the use of defective or damaged materials.

Symptoms of construction defects

Some of the most common defects that our clients experience include:

  • Water damage
  • Roof and window leaks
  • Grading and drainage issues
  • Heating, ventilation and air conditioning issues
  • Structural problems
  • Product failures
  • Poor energy performance

Besides the extra costs and time delays required to correct the physical damage, construction defects can negatively affect your property in other ways, such as increased maintenance costs, loss of rental income, liability for injury to tenants or customers, and code violations.

Our firm is frequently contacted by property owners for consultation about their construction projects, both during and after completion.

Settling Disputes

The contract that you enter into with your design team and contractors is the most important document you will sign, in terms of legal protection and dispute remedies. Watch out for and avoid these problematic contract provisions:

Elimination or reduction of warranties

Contractors should always warrant that materials and equipment furnished under the contract will be of good quality and new, that the work will be free from defects not inherent in the quality required or permitted, and that the work will conform to the requirements of the contract documents. Your contract should state that work not conforming to these requirements, including substitutions not properly approved and authorized, may be considered defective. These contract provisions should never be omitted from the contract because they are the industry standard and provide vital protection to the property owner.

Limitations on damages

Avoid contract provisions that limit the property owner’s damages, especially those that limit or waive consequential damages and expert fees. An example of consequential damages would be the cost of relocating tenants from a large residential complex or professional office building, so that deficiencies can be corrected. In some projects, consequential damages and expert fees can exceed actual damages, but even on smaller projects, the owner should not have to bear this burden.

Arbitration provisions

“Don’t enter into a contract that contains an arbitration clause for dispute resolution,” advises Pearson Legal, P.C. founder Matthew R. Pearson. “Arbitration is promoted by many as fast and inexpensive. In reality, arbitration costs more, is slower and is more burdensome than the courthouse.”

The reason for this is that arbitration does not protect your legal rights the way a court proceeding does. For example, an arbitrator or arbitration panel is not bound by the same rules of evidence and procedure as a court. Additionally, arbitration decisions are final and binding, whereas litigation provides the opportunity to appeal decisions. Perhaps most importantly, arbitration is more expensive because it takes just as much time if not more than a lawsuit, requires representation by attorneys, and the parties have to pay for the same services they could access for free at their local courthouse.

Choice of venue

Avoid contract provisions that require that any lawsuit concerning the project must be filed in a county or state other than project’s location. Some design professionals and contractors would prefer to litigate where their headquarters are located, and some would prefer litigation in a state where the laws are more favorable to the contractor. It is usually an advantage to property owners to litigate closer to home.

Choosing the right representation

When you have a dispute with a design professional or contractor over possible defects, it’s vital to have professional legal representatives with many years of construction law experience on your side.

“We’ve been successfully litigating for property owners for over 15 years, both in court and in arbitration proceedings” Mr. Pearson adds. “Because we don’t represent contractors, engineers or architects, you’ll have the peace of mind in knowing that we have only the property owner’s best interests at heart.”

Pearson Legal, P.C.’s clients include:

  • School Districts
  • Cities/Counties/Municipalities
  • Apartment Complexes
  • Hospitals
  • Museums
  • Government Housing
  • HOA Communities
  • Hotels/Lodging
  • Senior Living Centers
  • Retail Shopping Centers
  • Commercial Buildings

If you find yourself at odds with your contractor or builder over construction defects, contact the experts at Pearson Legal, P.C.