House building and other contracting projects may not always proceed as planned. Read about your legal alternatives if construction delays are excessive.
What you’ll discover:
When a building project is delayed, what are my legal rights and options?
What happens if a delay is beyond my contractor’s control?
What should I do if my contractor departs before or during a project?
Do certain sorts of delays entitle a contractor to a time extension without penalty?
How can I legally safeguard myself and the building project from delays?
Construction projects, whether adding an additional bedroom to your house or upgrading a rental property, are seldom finished without a few setbacks. Delays are typical because of the several issues involved, including permissions, supply shortages, and the coordination of multiple contractors. While they are not always avoidable, you do have legal remedies if an unacceptable construction delay causes you hardship.
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When a building project is delayed, what are my legal rights and options?
Since delays are sometimes unavoidable or beyond the builder’s or contractor’s control, whether you have a viable claim for a construction project delay is dependent on many critical decisions. The three basic factors of delays include:
Is it better to be critical or non-critical? Would a specific delay (say, in window installation) hinder the whole building project from being finished on time? If not, then it is termed a non-critical delay.
Is it acceptable or unacceptable? If a contractor fails to work for a reasonable period of time without a good cause (such as an accident or natural catastrophe), it may be regarded an unacceptable delay.
Is anything compensable or non-compensable? If the contractor’s delay is excusable (out of their control), then they may request an extension of time, or even demand more money to finish the job.
Your legal choices will most likely be determined by these three criteria, as well as how effectively they are handled in your Construction Contract. For excessive delays, consider mailing a Breach of Contract Notification. Some contracts, for example, have a liquidated damages provision that defines the amount of money that may be charged for a certain delay or violation.
The extent to which a delay breaks a contract is determined by the circumstances and the terms of the contract. If the agreed-upon construction date has past, or the delay is deemed excessive, you may have grounds for a claim, unless it was beyond the contractor’s control.
Assume that a construction delay at your rental property has an effect on your renters — for example, they had to relocate during construction and their move-in date had to be pushed back. In such situation, you may seek compensation for lost income and other losses, which may include any relocation expenses you provided for your renters. But, if the delay was caused by complications you created by changing the plans, or by causes beyond anyone’s control, you should consult with a lawyer about your alternatives.
What happens if a delay is beyond my contractor’s control?
In general, if the contractor has no control over the situation and your contract is quiet on the subject, there may not be much that can be done. Contractors that are served with construction delay allegations may use the following legal defenses:
There are no damages. A contract condition may say that delays (minus any real losses) are not compensable, depending on what is permitted in your state.
Delays that occur at the same time. Several reasons contributed to the delay, such as waiting for supplies or for another contractor to finish their job.
Majority rule. A Force Majeure provision specifies specified conditions (such as pandemic-related issues) that absolve the contractor of duty for delays.
What should I do if my contractor departs before or during a project?
You have the expectation that the project will be finished within a reasonable length of time, regardless of any exact completion date you may or may not have specified in a construction contract. Although the phrase “reasonable” may seem ambiguous, courts may define it depending on the scope of the project, contractual provisions, and the circumstances of the case. They will typically see a failure to work on the project (in the absence of any plausible explanation or updates) as an act of abandonment. If the contractor fails to finish the job within a reasonable time frame due to unexplained absences and delays, you may hold the contractor accountable for breach of contract. The remedies you may be entitled to differ by state; generally, if any work was accomplished, a contractor is often entitled to payment for that job.
Do certain sorts of delays entitle a contractor to a time extension without penalty?
As previously noted, if conditions outside the contractor’s control occur, such as extreme weather, a construction project delay may be deemed excusable and hence not a contractual violation. In these cases, the contractor is compensated for any extra time or other expenditures necessary to finish the job. In other words, the contractor may be paid for extra time, labour, and materials required to complete the job.
If the delay is unforgivable (the contractor failed to finish the job without warning or a plausible cause), any extra time or materials required to complete the project are not compensable. This implies they may not cost you for any additional time required to finish the job. They also may be held accountable for extra damages caused by the delay, such as lost income (if it’s a rental property).
How can I legally safeguard myself and the building project from delays?
The easiest approach to avoid construction project delays is to have your agreements reviewed by a lawyer before signing. The key to protecting oneself is to ensure that your agreement has the necessary safeguards. In terms of possible delays, the following are some of the most crucial items to cover in your contract:
Time limit. With an open-ended completion date, it may be more difficult to hold builders responsible for project delays. Contain dates for notice to proceed, commencement of construction, and project completion (with exceptions for delays beyond of either party’s control).
Orders should be changed. Building projects seldom proceed as planned. As a result, make sure you discuss the process of authorizing change orders so that all parties understand how this may affect the time it takes to finish the project.
Resolution and termination of disputes. Regardless of how well you get along with your contractor, always discuss how conflicts will be handled and when you will be able to cancel the contract.
Majority rule. Although these provisions often benefit contractors the most, it is in your best interest to examine the tiny print and verify they are appropriately constructed and protect both parties.
Liens on mechanics. Depending on the project’s complexity and the number of contractors and subcontractors involved, you may want to consider a retainage provision or a lien waiver in the case of a disagreement between separate parties.
