Taking on major residential construction projects can be an exciting business opportunity. New residential construction, remodeling projects and building expansions can all be unique and challenging projects. Homeowners may pay a premium price to work with reputable companies. Word-of-mouth referrals from satisfied clients can lead to a string of similar projects.
Frequently, those with the budget to hire construction firms have a specific vision for the final product. Often, that vision involves specific finishes or even prestige materials. People paying for top-of-the-line work generally do not want engineered hardwood floors but rather pure hardwood, often from rare sources. They may want imported bronze windows made in Italy and hand-laid tile in their kitchens or bathrooms.
Construction companies taking on residential projects often need to carefully validate the client’s material requests and expectations. Otherwise, a client might pursue a construction defect claim alleging that the final product does not align with the agreement or their expectations.
Material substitutions are sometimes necessary
Supply chain issues have complicated construction projects for years. These issues have become much more common in the last half-decade. First, it was lumber. Then it was structural steel. Materials that professionals need to complete projects aren’t always readily available, and their prices can fluctuate when supply is low.
Issues ranging from the weather to international politics can affect the supply of materials that construction firms and professionals need to finish a project. Particularly when a client wants granite countertops, it is crucial to communicate with them proactively before any material substitution occurs.
Construction companies typically want to have provisions for substitutions included in their contracts, such as clauses allowing them to replace a hard-to-source material with something of equal quality. They also generally need to communicate in writing with the client when a substitution might be necessary.
Informing a client of increased costs or project delays related to their selected materials might inspire them to approve a substitution. Other times, they might insist that they are willing to wait or pay as much as necessary to get exactly what they requested. The failure to address material substitutions ahead of time and integrate terms related to project adjustments into a contract can leave the company vulnerable to litigation.
Identifying issues that could lead to client conflicts and potentially construction defect lawsuits can help those working in the competitive residential real estate sector limit their exposure.
