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Construction Law

I have significant experience working in the enforcement of construction contracts. I have helped general contractors, subcontractors, material suppliers, labor suppliers, consultants, and others in construction matters. A large part of the focus in the representation of construction clients is on the creation, review, and adherence to the proper contractual documents as it specifically relates to your duties on the project.

Additionally, a number of construction clients need assistance with the review of insurance policies and documents, general contracts and subcontracts, lien releases and waivers, bonding requirements, and more.

Drafting a Construction Contract

It is vital for parties involved in a construction project to create a valid contract. This is especially true for contractors who stand to lose the most if property owners fail to compensate them for their work. To help avoid problems in the future, contractors should speak with an attorney who can help them draft a contract that addresses specific issues, including:

  • The type of work that will be performed;
  • The type of structure that will be built;
  • The rights and duties of all participating parties, including contractors, subcontractors, laborers, designers, owners etc.;
  • Notice of a construction lien;
  • The means and amount of payment;
  • When the parties will be paid;
  • Labor and material warranties;
  • Protection from liability;
  • The estimated duration and associated costs of the project;
  • Alternate plans in the event of an unexpected circumstance, such as a storm or natural disaster;
  • Each party’s insurance coverage; and
  • Details on how all disputes will be resolved.

Clearly specifying these details will help keep projects running smoothly and protect the contractor’s interests in regards to terms of payment and performance.

There are a number of different types of contracts involved in construction projects. The kind of contract a contractor uses will depend largely on the type and scope of each project. Some of the most commonly used contracts include:

  • Guaranteed maximum price contracts, which enable contractors to receive payment for the actual costs of a given project in addition to a fixed fee;
  • Lump sum contracts, in which contractors agree to complete a specific project for a fixed price;
  • Unit price contracts, which allow a contractor to be paid based on estimated quantities of items and their prices;
  • Cost plus contracts, which require the client to reimburse a contractor for all previously determined expenses related to the project in addition to a fixed fee or a percentage to cover overhead and profit; and
  • Incentive contracts, of which there are two main types, fixed price incentive contracts and cost reimbursement incentive contracts.

There are many more types of contracts available to contractors, although only some are appropriate in certain situations. Creating the right kind of contract can have far-reaching consequences, so it’s important to consider all options carefully before deciding.

Breach of Contract Claims

Unfortunately, despite taking these precautions, contractors may still face legal issues related to a project or a breach of contract. One of the most common complaints made against contractors is that a property contains construction defects. Whether related to ventilation problems, plumbing issues, or structural integrity, construction defects can put an entire project on hold. These defects are not always the fault of a contractor, but may be the result of a manufacturer’s faulty design of a tool or part. Fortunately, Florida law guarantees contractors the right to notice, an inspection, and the opportunity to make repairs before a lawsuit can be filed against them.

Property owners are also required to file a construction defect claim with a contractor within four years of the date of possession, the date of issuance of a certificate of occupancy, the date of abandonment, or the date of completion, whichever is later. In the absence of special circumstances, a claimant’s failure to file a claim against a contractor within this time period would lead to the case being dismissed.

General Contractor Insurance

It is also vital for a contractor to have Owners and Contractors Protective Liability Insurance (OCP). These policies ensure that bodily injuries, property damage, and defects that occur on a job site will be covered. A general liability insurance policy will also cover the legal costs in defending a claim.

Florida contractors are required to carry general liability insurance. Currently, general contractors must have a policy that, at a minimum, provides the following coverage:

  • $300,000 for bodily injury; and
  • $50,000 for property damage.

Subcontractors and specialty contractors have a different minimum standard, which requires that their policies provide the following coverage:

  • $100,000 for bodily injury; and
  • $25,000 for property damage.

It is often unclear whether a contractor’s current policy will provide adequate coverage for a particular project. An experienced attorney can help resolve these questions as well as oversee negotiations with the insurance company, the contractor, and the other party.

Lien Waivers

A lien is a hold that is placed on a property to ensure that a contractor is paid for his or her labor. Once a contractor has been paid, he or she fills out a lien waiver, which acknowledges receipt of full payment. The document also waives any future lien rights to the property. Florida law dictates how lien waivers should be worded, but it is still important for contractors to carefully read lien waivers before signing as these documents often include language waiving other important rights. The effective date of the waiver can also play havoc with a contractor’s finances if the document officially becomes effective before payment was actually received. This is known as an unconditional waiver. Many contractors opt for a conditional waiver, which becomes effective once a check has been paid by the issuing bank. Careful review can help avert these problems, ensuring that all parties receive compensation.

Bonding Requirements

A number of cities in Florida require contractors to purchase surety bonds before completing a construction project. These bonds protect individuals, the city, or the state from financial loss in the event that a contractor does not comply with city codes or fails to correct a defect. Construction bonds have an expiration date, so it is important for contractors to ensure that all of their bonds are up to date. A failure to do so could leave a contractor on the hook for any costs related to a defect or permit violation.

Contact an Experienced Business Law Attorney Today

Contractors, subcontractors, suppliers, and consultants who work in the construction industry are often vulnerable to attacks by clients arguing breach of contract. Having carefully reviewed and detailed contracts can go a long way towards alleviating that risk, so if you are a licensed Florida contractor and have questions or concerns about a current or pending project, please contact my Clearwater office at (727) 785-5100 to discuss your construction related concerns.

TESTIMONIALS

I strongly endorse Andrew Mongelluzzi. He is a very skilled and able business attorney focused on customer service and results. On the front end, Andrew deftly advises new businesses on organizing properly, acquiring necessary licenses, contracting with vendors & customers, and dealing with various compliance issues that may arise. On the back end when things go south, Andrew counsels and navigates businesses through complex commercial disputes and aggressively represents them in negotiations, mediation, arbitration, and in litigation so that businesses can legally move on and get back to business. Andrew’s ability to identify legal issues and approaches to resolve business-related issues is a strength that I have learned from and professionally relied upon in approaching the business matters and cases that I handle. I regularly refer business to Andrew knowing that he will diligently represent his business clients and their best interests.
Relationship: worked together on matter

- Frank N. Genco, Florida Bar No. 440086

We hired Andrew to help us when our insurance company denied our claim when water and sewage damage completely destroyed our Florida Condominium. Even though Andrew made several phone calls and wrote an initial letter, the company continued to deny our claim. He was persistent and continued to help us negotiate with the company until we finally received a fair monetary settlement. He was always quick to respond, helpful, and courteous when working with us. I would recommend him to anyone who is fighting an unjust insurance settlement.

- Harvey

Andrew has represented my business for several years in the area of corporate law, business transactions, collection matters, contract matters, employee disputes, and more. He has always been more than approachable, accommodating and understanding. His approach is not like other lawyers in that he deals with you on your level and is able to incorporate his legal strategies into our business plan/model; instead of allowing lawsuits to takeover the business. Further, his education and practical experience in the business world equates to a valuable understanding of my business.

- Chris

Attorney Mongelluzzi and his team provided excellent and quality service. I always felt that my needs were met and that the firm was invested in me and my case. The quality services I received at Mongelluzzi’s firm were remarkable. From the initial meeting they were responsive to my calls, questions and concerns. All issues were handled professionally and timely, easily accessible, got back to me quickly, aggressive and got me the results that I wanted. Attorney Mongelluzzi and his staff all gave my case their personal attention and provided the quality of work that anyone would want when hiring an attorney.

- Client

Andrew is very thorough defining the outcome expectations. In my case, it was setting up a new corporate entity. He advised me on the most beneficial option and he then executed on that path. Andrew is a very pleasant person to work with. He is determined, skilled and committed to his client’s success.

- Gil Pinney

Andrew helped me through a difficult situation with American Express and we won the case. A great job by Andrew! He also helped me with T&C’s in my company. I would recommend Andrew highly as an attorney.

- John Sams

As a business owner for 12 years I have seen my fair share of ups and downs. Some of the downs would include landlord/tenant disputes and creditors that may have not been fulfilled to agreement. Andrew has met both of these situations for me in a timely, positive, and affordable manner.

- Rich Mattes

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