Contractors & Subcontractors Attorney in Los Angeles, California
On a typical construction project, a property owner will agree on terms with a general contractor to see the project through to completion. The terms will be ironed out in a contract that covers every detail of the project from start to finish, setting quality standards, timelines, responsibilities, payment schedules, warranties, potential penalties, and more.
The general contractor, or builder, will in turn usually rely on subcontractors to complete specialized tasks associated with the project, such as electrical, plumbing, heating, ventilation and air-conditioning, drywall, roofing, framing, and other components of getting every detail done in a workmanlike manner on time.
The contractor and subcontractors will in turn forge contractual agreements setting the goals and standards of the part of the project for which the subcontractors will be responsible. As with the owner-builder contract, both sides will need to make sure their rights and responsibilities are clearly spelled out to ensure there is a level playing field, so to speak.
If you are a contractor or subcontractor eyeing involvement in a construction project in or around Los Angeles, California, you need to turn to experienced legal assistance to forge well-crafted contractual agreements that meet the proper legal standards so both parties and their interests are respected. Our legal team at the Builders Law Group, Inc. stands ready to help you forge comprehensive legal documents that cover all the bases and provide a clear path forward to completing the project.
The Builders Law Group, Inc. serves clients throughout the counties of Los Angeles, Ventura, Orange, Riverside, San Bernardino, and San Diego. Reach out immediately when you’re about to enter into a construction project agreement.
Building Risk Management Strategies
Both contractor and subcontractor must manage risk and protect their interests and rights. Both are subject to a schedule for the completion of the project. Though the general contractor reports to the property owner or developer, the subcontractors report to the contractor. In a larger sense, both the owner-contractor agreement and the contractor-subcontractor agreements must adhere to the same set of standards and needed clauses.
A well-crafted contractor-subcontractor contract should address these basic issues and possibly more possible contingencies:
Participant details: The contract must cover the name, address, contact details – and signatures – of the contractor and subcontractor, as well as the details of the owner.
Terms of payment: This may hinge upon how the owner agrees to pay the builder or general contractor, but the subcontractor agreement must spell out how payments will be made and when.
Scope of work: The contract must specify exactly what the subcontractor is expected to accomplish and by what date or sequence in the overall construction process.
Change orders: The contract should address how a modification is to be made in what is to be accomplished if circumstances change for any number of reasons, such as supply chain difficulties or even a modification in the original plans.
Insurance and licensing: The subcontractor should be required to purchase workers’ compensation and other liability insurance so that the general contractor is not liable for injuries or other losses on the project that are not their direct responsibility. The subcontractor must also satisfy any local, state, or federal licensing requirements to perform the work in question.
Dispute resolution: This is a biggie. The contract must spell out how a dispute between contractor and subcontractor can be resolved. This is to prevent matters from ending up in a courtroom that can threaten the completion of the project itself. Often, a clause for mandatory arbitration is included, but another option can be mediation, though mediation does not yield a mandatory resolution.
Termination of details: Generally, termination comes when the subcontractor completes their part of the project on time and in a workmanlike, professional manner.
Nonpayment and Construction Liens
Subcontractors who are not compensated for their services have the option of filing a construction lien (also known as a mechanic’s lien) on the title to the property—even when the non-payment was the responsibility of the general contractor, who may or may not have been paid by the property owner. A lien against the property will prevent the owner from selling the property or even obtaining a loan on it if the lien is not settled.
Contractors and subcontractors are expected to act in good faith in the performance of their contractual obligations. This means that contractors and subcontractors have a duty to perform their tasks in a workmanlike manner. This also includes the subcontractor’s need to keep the contractor informed of any setbacks or problems arising in the execution of their tasks. In turn, the contractor must keep the owner informed if delays or unforeseen costs are anticipated.
Contractors and Subcontractors Attorney in Los Angeles, California
If you’re a contractor enlisting subcontractors or a subcontractor entering into an agreement with a contractor in or around Los Angeles, California, don’t rush into an agreement or use some standard fill-in-the-blanks form. Your rights may be jeopardized. Instead, contact us at the Builders Law Group, Inc. to review whatever document you’re considering. Or better yet, let us create a comprehensive legal agreement to set guardrails for you and your interests. Reach out immediately to get started.