In today's Freedom Friday blog and email newsletter, I want to talk about something else that I get asked about, in different ways, and that is issues in the construction industry.  We've had several clients, both former and current clients, who have had issues in the construction industry.  Whether it is an issue of getting paid, or something else, there are several common construction disputes that I get asked about frequently here at Liberty Legal Solutions, LLC.  So, in today's Freedom Friday blog and email newsletter, I'm answering the question, “What are common construction disputes?”

Most construction projects involve various stakeholders, or other individuals and entities who are involved in the project.  These individuals and entities include contractors, suppliers, property owners, and many others.  However, if one of these entities isn't being paid, or the project is hitting other snags, disputes can arise.  Here are five common construction disputes:

1.  Scope Creep

The first common construction dispute, and these are not being presented in any particular order, is scope creep.  Scope creep is when the project's scope goes beyond the originally agreed on parameters.  In a construction project, it's critical to establish a clear and detailed scope of the project at the beginning.  Construction contracts need to be detailed and comprehensive, outlining specific goals, deliverables, timelines, and any potential changes to the scope can minimize misunderstandings and reduce the likelihood of disputes arising from this issue.

2.  Payment Disputes

A second common construction dispute, and perhaps the most common, is payment disputes.  Contractors and subcontractors alike deserve prompt and adequate compensation for their work.  To address payment issues, it's essential to have well-drafted contracts which clearly outline payment terms, benchmarks, and invoicing procedures.  Also, progress payments and retainage can help ensure all parties are fairly compensated throughout the entire lifecycle of a construction project.

3.  Delays and Extensions

A third common construction dispute is delays and extensions.  Construction projects can have delays caused by several factors.  When a delay occurs, the delay needs to be addressed promptly and openly.  Contracts need to include provisions on how to handle delays and extensions, and there needs to be clear communication between the parties regarding these issues.  Managing timelines also helps mitigate the impact of delays and avoid disputes.

4.  Quality Assurance

A fourth common construction dispute, and one that I don't see as much as some other attorneys, is quality assurance.  These issues are related to construction defects, or bad workmanship.  Sometimes this will relate to payment issues, discussed above, and sometimes it will not.  Contracts need to include detailed specifics and standards for performance of the work.  In the event of a construction defect claim, the contract needs to outline a dispute resolution process, which may include mediation and/or arbitration.

5.  Mechanic's Liens

A fifth common construction dispute, and this one is usually directed to payment disputes, are mechanic's liens.  In Oklahoma, we have M&M liens (M&M stands for mechanic's and materialmen's).  Any contractor or subcontractor can file a lien (there is a statutory process that must be followed) to secure their right to payment on a construction project.  M&M liens are very common on commercial construction projects, but can appear on residential ones as well.  If an M&M lien is filed, the entity that filed the lien has one year from the date of filing to file a lien foreclosure lawsuit against any other lien claimants (others who have also filed their own liens), and the property owners, as well.  At Liberty Legal Solutions, LLC, we assist contractors and subcontractors with filing M&M liens and then enforcing lien rights through the courts.

Thinking about starting a small business?  Or maybe your small business is having issues with contracts, leases, business partners, collection issues, or experiencing other barriers to growth?  Please contact me at [email protected] to schedule a FREE strategy session.

For more information about Liberty Legal Solutions, LLC, please visit our website at http://www.libertylegalok.com/