June 19, 2015
This article is the second in a series on new construction. The contents of this series of articles apply to commercial as well as residential projects.
In this blog entry, we discuss the “what” is to be built under a new construction contract, residential or commercial. The problem is that, unlike with an existing building, in order to properly contract for the construction of a new building, the parties must carefully define “what” is to be built using words and drawings.
I teach continuing education classes on new construction, and there I define this problem of describing the improvements to be built as a 4-dimensional problem, with the first three dimensions being the height, width and depth of a project — the physical description of what is to be built. The 4th dimension, then, is “when” the project is to be delivered.
This blog entry addresses that topic — the 4th dimension of a construction project — when will the finished product, or substantially finished product, be delivered to the buyer.
There are a myriad of issues that can impact the “when,” starting with selections to be made by the buyer. Here are just a few of the issues impacting the timing of completion:
- The buyer’s inability to make timely design and selection decisions for finish items. This is the item most frequently cited by builders as to why the buyer has slowed the project and driven up costs.
- Design changes.
- Unexpected site conditions, such as bad soil or environmental problems.
- Regulatory issues,such as zoning and building permits and roadway access..
- Utility availability at the property line.
The timing issues encountered in a construction contract significantly impact both construction costs and operational issues confronted by both buyer and seller. Thus, having a realistic understanding of timing issues at the front end of a construction project is important, and deciding how to allocate the risk of timing issues is a critical contract consideration.
This article is one in a series on the Finney Law Firm blog on new construction. Read more here: