{"id":898012,"date":"2020-09-29T16:23:33","date_gmt":"2020-09-29T22:23:33","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=898012"},"modified":"2020-09-29T16:23:36","modified_gmt":"2020-09-29T22:23:36","slug":"top-10-legal-concerns-builders-contractors","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/top-10-legal-concerns-builders-contractors\/","title":{"rendered":"Top 10 Legal Concerns for Builders and Contractors"},"content":{"rendered":"\n

Rebecca Knudson | Cranfill Sumner & Hartzog<\/a><\/p>\n\n\n\n

Builders and contractors often come to me with the same questions and concerns related to legal issues. Over the years I\u2019ve noticed the following common legal questions from construction professionals.  <\/p>\n\n\n\n

1.         Forming a business entity, regardless of business size.  <\/strong><\/p>\n\n\n\n

It is important to form a legal business entity regardless of the size of the business.  Even if there\u2019s only one person, forming a legal business entity, such as a corporation or LLC, will help protect the owner and the owner\u2019s assets. Failing to form a business entity can result in an owner being held personally liable for business debts, which can result in creditors taking an owner\u2019s personal assets, such as their home.  <\/p>\n\n\n\n

2.         Protecting your personal assets.<\/strong><\/p>\n\n\n\n

While it\u2019s important to form a legal business entity (i.e. a corporation or LLC), it\u2019s not a guarantee that your personal assets will be protected. It\u2019s important to follow specific legal corporate formalities to help protect the owner\u2019s personal property from creditors. <\/p>\n\n\n\n

3.         When to hire an attorney. (Hint: The sooner the better.)<\/strong><\/p>\n\n\n\n

It\u2019s never a good idea to wait until you\u2019re sued to hire an attorney. By then it\u2019s often too late. Rather, it\u2019s a good idea to have an attorney help you from the beginning as you set up your business, plan the structure of your business and help prevent future problems before they arise.<\/p>\n\n\n\n

4.         Planning for and preventing potential lawsuits.<\/strong><\/p>\n\n\n\n

Many people think you can only be sued if you do something wrong, and unfortunately, that is just not true. If a builder or contractor is sued, it can be a very expensive and time-consuming process. An attorney can help plan for such a possibility and can help businesses prevent certain legal issues with the appropriate contracts. <\/p>\n\n\n\n

5.         Going beyond the Building Codes and inspections.<\/strong><\/p>\n\n\n\n

Yes, it is important to follow all Building Codes and inspection requirements. But you must do more than that in order to be successful and protect your business from legal harm. Businesses must also follow applicable industry standards, manufacturer\u2019s instructions, plans, and specifications.  <\/p>\n\n\n\n

6.         Put all changes in writing.  <\/strong><\/p>\n\n\n\n

I recommend that you get any changes and modifications in writing, especially if it involves changes to your scope of work or if you feel that certain instructions that you receive are questionable.  Failure get to written confirmation could lead to disputes at a later time.  <\/p>\n\n\n\n

7.         Have a written contract\u2026at all times.<\/strong><\/p>\n\n\n\n

Having a written contract with property owners, subcontractors and vendors is essential. It protects both parties by clearly stating the scope of work, cost of materials and more. Properly written contracts can also help protect a business from future disputes.<\/p>\n\n\n\n

8.         Subcontractors and the importance of an \u201cindemnity\u201d provision.<\/strong><\/p>\n\n\n\n

A contract must include a written \u201cindemnity\u201d provision to help protect a contractor from its subcontractor\u2019s errors. Without this provision, your business could be held liable for mistakes that your subcontractors made. However, if the indemnity provision is not drafted properly, it can violate North Carolina\u2019s anti-indemnity statute and will not be legally enforceable.<\/p>\n\n\n\n

9.         Keeping project files.<\/strong><\/p>\n\n\n\n

I always recommend to keep the entire job file on record for at least eight years after a project is completed. Under North Carolina law, you can still be sued for up to six years following the completion of a project even if the Builder\u2019s warranty has expired. A complete project file will help protect the business in the event of a dispute several years later.  If document storage is an issue, scan all files electronically before disposing of documents.<\/p>\n\n\n\n

10.       Who pays the legal bills?<\/strong><\/p>\n\n\n\n

It is a common misconception that if you win in Court, the losing party must pay for the winning party\u2019s attorney\u2019s fees. That\u2019s not true. Every party is responsible for paying its own attorney\u2019s fees regardless of who wins . There are some exceptions to this, but those exceptions generally do not apply in most legal situations.<\/p>\n\n\n\n

If your business has a legal question, I recommend seeking legal advice to determine the best course of action.<\/p>\n","protected":false},"excerpt":{"rendered":"

Rebecca Knudson | Cranfill Sumner & Hartzog Builders and contractors often come to me with the same questions and concerns related to legal issues. Over the years I\u2019ve noticed the following common legal questions from construction professionals.   1.         Forming a business entity, regardless of business size.   It is important to form a legal business entity regardless… Continue reading Top 10 Legal Concerns for Builders and Contractors<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14],"tags":[9895,12],"class_list":["post-898012","post","type-post","status-publish","format-standard","hentry","category-construction-2","tag-advise-consult","tag-construction","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nTop 10 Legal Concerns for Builders and Contractors - 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