Whether you are looking to improve or build a home, or you are hoping to add a property to a vacant lot, the quality of the contract you establish may make a big difference in the protection of your business assets. Similarly, for contractors and vendors who contribute to the construction, it is vital that you ensure the contract is thorough and provides protection for all involved parties.
Before signing any contract, you’ll first want to have legal representation review it. Similarly, if you do not have a contract drafted, consider hiring a real estate lawyer to work with you in developing one. Successful construction contracts will cover all important basis.
What construction contracts should address
- Cost – Be sure to include the amount of money the parties have agreed upon.
- Timelines – All parties should know and be comfortable with the timeframe allotted for the project; this should be well-detailed in your contract.
- Payment methods and penalties – Address the ways in which financial transactions will take place and penalties for late payments or services.
- Project description and management – Include the desired materials, designs and general management preferences to avoid future conflict.
- Conditions of property sites and environments – You may want the contract to also address conditions of the lot or building prior to construction as some unexpected or ignored conditions may impede the process.
- Anticipated dispute resolutions – Include in the contract how you and the other parties may address any legal issues or future disputes. Arbitration, for example, is an alternative dispute resolution that will keep your dispute out of court.
Note also that there are some things you should avoid when drafting a contract such as ignoring Massachusetts and federal laws pertaining to zoning, safety and other related regulations.
Moving forward with a construction project can be quite exciting. Ensuring your legal and financial protection, as well as the protection of the other parties, should be a top priority if you hope to celebrate a successful business venture down the road.