Redfin.com recently posted an article on 7 DIY Home Repair Mistakes to Avoid Before Selling Your House, and I was fortunate enough to be quoted when describing why sellers should always pull permits for pre-sale improvements.
In my most recent article for Construction Executive I discuss what blockchain is and explore how it can (and likely will) be used in the future to automate the performance and administration of construction contracts and how it could be used to automate legal notices. The possibilities are endless!
Over the last year, material prices have steadily increased, and it looks like they will continue to do so for the foreseeable future. More recently, materials are also becoming increasingly scarce, with everything from drywall mud, to paint, to lumber. Earlier this year I shared an article about using price escalation clauses to account for material price increases, but I wanted provide some more direct information on how to manage both cost increases and delays. The best way to do this, and in some cases the only way to do this, is through your contract.
One of the major headlines in 2020, in construction, that did not directly involve the coronavirus, was the dramatic increase of lumber prices across the country. From April to September 2020 alone, general construction lumber prices increased 130%. Specific types of dimensional lumber increased as much as 158%. And while prices corrected slightly in the beginning of the fourth quarter of 2020, at the end of the year, prices were back on the move upward.
A project manager’s cell phone chirps as she is on a busy jobsite. She glances down and sees that it’s the electrical subcontractor on the project asking a question about running wire in a different location to accommodate another trade’s work. She looks at the plans and texts back that the change is fine and to proceed. The electrician moves forward with the work. The following month, the electrician submits a change order for some additional time and materials required by running the wire in a different location, claiming the change was approved by the project manager. Was it?
On November 3, 2020, Floridians just barely approved (by .8%) an amendment to Florida’s constitution requiring the minimum wage to ultimately be raised to $15.00/hr. While the new minimum wage is phased in over time, it affects every business with employees in Florida.
When comparing Florida contractors to other professions in the state, only medical professionals are more heavily regulated. General contractors are more regulated than most professions, from architects to veterinarians, and the industry should recognize this and adapt.
Payment issues can arise on many jobs. Everything goes smoothly at first, the work is done correctly and then suddenly, payment is delayed. A problem promised to be worked out quickly turns into weeks or months of delays, in some cases through no fault of the company trying to be paid. Disputes with other contractors, managers, project owners or lenders can cause delays, and while the parties try to work things out, the uninvolved and unpaid parties are left twisting in the wind.
In construction a good foundation is critical for success, and this is just as important in the formation of a company as it is bringing a building out of the ground. Most companies start with a combination of opportunity, hard work and a little luck. But those ingredients can evaporate quickly if the company is not started on solid footing.
Managing Owners and Their Expectations With Specific Contract Provisions