Disagreements are inevitable in most human affairs, and construction projects are no exception. They can range from minor onsite arguments between colleagues to legal claims that can delay the entire project or even cause it to fall through.
Unfortunately, many inexperienced project owners and managers fail to plan a process to resolve a construction issue or they don’t get the right experts involved until the issue has already resulted in significant delays and escalated to costly litigation. Understanding how and why construction claims occur and taking preemptive measures to address them is crucial in order to ensure the success of a project.
In the following article, the expert consultants from VERTEX will explain what construction claims are, why they occur, and how they can be avoided. Keep reading to learn more.
What is Construction Claims?
Construction claims are requests by any party in a particular contract for compensation for damages caused by the failure of the other party or parties to fulfill their contractual obligations.
Different types of construction claims include:
- Owner against contractor claims happens when the owner believes the contractor has supplied defective work, didn’t follow the agreed-upon designs or failed to meet deadlines.
- Contractor against owner claims is caused by owner-caused delays or unexpected changes to the scope of work.
- Owner against consultant claims occurs as a result of design deficiencies or a failure of the consultant to properly oversee the work.
Other major drivers of construction claims include:
- Improperly written and/or executed contracts
- Insufficient or improper involvement on the part of the owner
- Overly aggressive scheduling
- High-profit pressures on contractors
How to Avoid Construction Claims?
As always, extensive preparation can make all the difference. Having thorough due diligence into the property and site conditions, from both the owner and the construction team involved in the contract can go a long way toward minimizing the risk of a claim.
Other ways to avoid construction claims include:
Reimbursable and Fixed Payments
By paying a fixed fee to the construction team and covering engineering and procurement on a reimbursable basis, you can significantly limit the risk for the contractor. This naturally reduces the possibility of a claim.
Build Strong Relationships
Business is business. A solid relationship with your clients, partners, investors, contractors and other involved parties can be extremely helpful when it comes to avoiding disagreements or smoothing things over when something doesn’t go as planned.
Take Extra Time to Plan Your Project
The planning phase (known as preconstruction) is one of the most important stages of any construction project. By creating a well-crafted schedule that accounts for possible challenges, supplies proper workflow for all involved parties, and correctly describes the specifics of the work, you’ll be able to avoid any issues that can bog down your project.
Good Contracts are Vital
Having a well-made construction contract that openly and transparently lays out the terms can prevent most disputes or at least expedite their resolution. For example, a great contract that clearly defines the scope of work is invaluable when it comes to mitigating claims over extra work, rework, or work not being completed.
Hire Expert Assistance
Unless you have expertise and experience in managing construction projects, it’s highly advised that you hire a team of construction consultants in the earliest stages of your project. In addition to supplying services such as construction management, owners’ representation, and construction risk assessment, these experts can also mediate disputes or help you build a strong case if the dispute ends up in court.