Why Do I Need a Construction Lawyer?

By William G. Christopher, Esq. -- Sarasota, Florida - Almost every major construction project in Florida ends up in Court. Litigation far and away the most expensive method of dispute resolution there is. Even a fairly simple lawsuit can cost you $20,000.00 or $30,000.00. And, there are not very many “simple” lawsuits. Most lawsuits are complex, can cost you over $100,000.00 and drag on for years. The following is a roadmap for avoiding such a disaster.

Choose a qualified construction lawyer to help you! The Florida Bar’s Board of Legal Specialties now certifies Florida lawyers in “Construction Law.”

Retain a construction lawyer before you sign a construction contract.

There are many decisions you must make before entering into a construction agreement that a construction lawyer can guide you through. Here are a few of those major decisions that will confront you:

What kind of construction contract do you want?

There are many options, including:

Fixed Price: a lump sum amount for the completed job.

Cost Plus Fixed Fee: Pay the Contractor’s actual cost plus a percentage mark-up or a fixed amount over and above the cost.

Fast Track: Where the design and construction phases overlap and the early phases need to commence before the design of the later phases is completed.

Design-Build: The Owner contracts with a single entity to do the architectural, engineering, and construction functions.

Construction Manager: The owners hires a CM to manage and coordinate all functions. Others are hired to do the actual architectural, engineering and construction functions.

Define the scope of work to be performed by the contractor.

This is probably the most neglected step. Exactly what is the contractor supposed to do under the base contract and, conversely, what work will the contractor be paid extra to do? You do not want it left to the architect’s or engineer’s drawings to define the scope of work.

Time, Schedules and Penalties. Set a deadline for completion, require schedules for the work and impose penalties for being late (liquidated damage clauses are tricky).

Other important contract clauses include termination provisions, payment provisions, delay clauses, change orders, and alternate dispute resolution. There are some mandatory statutory provisions that must be included.

Alternate Dispute Resolution. You should seriously consider including a mechanism for finally deciding disputes during the construction process when the facts are fresh and the work has not been covered.

The above is not intended as an exhaustive list, but only a sample.

Once the construction contract is signed, each party has important duties that must be performed. A construction lawyer can guide you through the requirements of the Florida Lien Law, Chapter 713, Fla. Stat. The owner is responsible for filing and posting a Notice of Commencement. A payment bond, if required of the general contractor, must be attached and incorporated into the Notice of Commencement. A subcontractor or supplier that desires to preserve its lien rights must serve a Notice to Owner that it is providing labor, services or materials to the job. The owner will want to take steps to make “proper payments” for the work of these entities in order to avoid liens against the property or having to pay twice for the same work. Keep your construction lawyer involved with the types of problems throughout the period of construction.

If disputes arise during construction, deal with them immediately; do not ignore them! The last thing an owner wants to do is force a contractor to bring claims after the end of the project. A properly written dispute resolution clause should force all parties to deal with such disputes as soon as they are discovered and resolve them. Once the certificate of occupancy is obtained, the project will be closed out and final payment will be made. Again, both sides have responsibilities at this stage.

If the worst happens, claims are filed and liens are filed, your construction lawyer must control this process. As a rule, the faster these are resolved, the cheaper they are to resolve. Pre-suit or pre-arbitration mediation should be considered. Your construction lawyer can guide you through the mediation process.

Mediation can be required by the construction contract before going to court or filing for arbitration. Mediation is a voluntary process by which a trained mediator meets with both parties to attempt to facilitate a settlement. A mediator is not a decision-maker, but only a facilitator. The decision to settle remains in the hands of the parties. Florida courts require almost all cases to be mediated before a trial date can be obtained.

If mediation fails to resolve the dispute, one of two avenues are left: a lawsuit in court or arbitration. Arbitration can only be compelled if there is an arbitration provision in the construction contract. Arbitration is usually faster and cheaper than litigation. The entire process is private (unlike a court proceeding) and the arbitrator’s award is final (with a few exceptions not worth discussing). Some trial lawyers do not like arbitration because there is very limited discovery (almost no depositions or interrogatories allowed) and the arbitrator’s award cannot be appealed, as a general rule.

While you save money on discovery and the speed of the process, arbitration can be expensive because of the administrative fee and the arbitrator’s fee. However, your construction lawyer can advise you on ways to hold these costs down.

Conclusion

Seeking the advice of a construction lawyer at every stage of a project, from contract formation to dispute resolution can save you money in the long run.

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William G. Christopher heads the Maglio Christopher & Toale Law Firm Construction Law and Litigation Department. He is certified by The Florida Bar in both Construction Law and Business Litigation Law. He is also certified by the National Board of Trial Advocacy in Civil Trial Advocacy. He is an arbitrator with the American Arbitration Association and certified by the Florida Supreme Court as a Circuit/Civil Mediator. Prior to becoming an attorney Mr. Christopher achieved the rank of Captain during his service in the U.S. Army Corps of Engineers from 1962 to 1967.