What Legal Advice Do Contractors Need When Times are Good?
The real estate market cycle typically includes four phases:
Predicting the exact timing of these phases is near impossible. For example, who can tell how the contentious elections will affect the local market in the upcoming years!? Even if we can’t foresee market changes, we can gauge the market’s current phase. It is striking how the different phases of the cycle will affect contractors’ legal needs. Understanding the needs of each cycle will keep you ahead of the curve and keep your legal fees down.
1. Expansion: A healthy market invites new participants and new opportunities. The equity and availability of projects leads to fewer legal disputes.
• Review your contract forms. The uptick in new work and new environment in which this work is performed will require revisions to your traditional contract forms. Don’t put “new wine in old wineskins” and risk missing the benefit of enhanced profits that are spent on unnecessary contract disputes. Spend time reviewing your contract forms – the small investment will pay off.
• Get creative. Use the newfound equity in projects as a cushion to experiment with innovative, cost-saving, or other new approaches that will provide a competitive edge for years to come. Review these new approaches with counsel to limit the impact of unanticipated consequences.
2. Saturation: An unhealthy level of comfort and increase of inexperienced market participants create an atmosphere of increased growth and competition. Typical legal disputes involve complex litigation where parties are willing to pursue their rights through lengthy legal battles in lieu of quick settlement.
• Develop relationships. The good times never roll forever. Although outside of the realm of daily construction practice, ensure you are investing in relationships with clients, lenders and sureties that will continue support in the lean times.
• Protect assets. Balance the temptation to leverage assets to compete in a larger market with a measured approach that protects personal assets through estate planning in the event of unanticipated financial crises.
3. Recession: Contractors who are caught overextended or overleveraged at this time will collapse. The legal focus will turn to collection of the limited available money on projects. Contractors will consistently underbid projects, fail to meet these estimates, and further jeopardize projects.
• Secure payment. Mechanic’s liens and payment bond claims become routine on every project. Ensure you understand the timelines for all requisite notices to protect your rights to payment.
• Anticipate insolvency. At least one contractor, subcontractors, or suppliers will cease work or stop payment during almost every complex project. Understanding how insolvency and bankruptcy affects contracts, payments, and performance before a crisis is a must.
4. Recovery: Contractors that escape the recession take prime position to capitalize on new opportunities. The legal focus turns to resolving outstanding collections litigation.
• Review corporate structure. The financial impact of the recession will have modified the way you do business. Changes to your employment practices, ownership, corporate partners merit a review of your corporate structure to properly limit legal and tax liability.
As president of Hirschler and head of the firm's litigation section, Courtney knows how to lead people and projects to a successful outcome.
Leveraging deep experience in the construction industry, Courtney advises public and ...
Kelly’s practice focuses on construction law, commercial and product liability law, with an emphasis on dispute resolution—including mediation, arbitration, jury and bench trials in state and federal court. She routinely ...
Nate fully engages in each case and shoulders his clients’ needs. Communication, efficiency and careful judgment define his practice. In every case, he investigates competing claims to thoroughly understand their strengths ...
A professional engineer (P.E.) and an experienced lawyer, Webb began practicing at Hirschler Fleischer following four years of work as a consulting engineer. His multidisciplinary practice focuses on general business and ...
SubscribeSubscribe to Hirschler by Email
- Kelly Bundy and Liz Burneson Publish Article on Joint Employer Status in Construction Executive
- Kelly Bundy Authors Article for ABA Construction Law Forum’s “Under Construction” Series
- Miller Act Notice More Than 90 Days Before A Subcontractor’s Final Day of Work Held Untimely
- Virginia Supreme Court Allows Sub-Sub Material Supplier To Recover Directly From General Contractor For Unpaid Material
- New Virginia Law Can Make General Contractors Liable for Subcontractors' Employee Wages
- OSHA Changes Course on COVID-19 Record-Keeping Requirements
- New OSHA Guidance Suspends Enforcement of Record-Keeping Requirements for COVID-19 Cases in Most Industries
- What the Virginia Temporary Stay at Home Order Means for Your Business
- Ten Tips For Addressing Coronavirus Concerns In Your Workplace
- Closure of “Non-Essential Businesses” and “Stay at Home” Orders: What Do These Mean for the Construction Industry?
- COVID-19, Coronavirus Outbreak
- Occupational Safety and Health Act (OSHA)
- Little Miller Act
- Miller Act
- Dispute Resolution
- Government Contracts
- Workforce Development
- Department of Labor (DOL)
- Mechanic's Liens
- Department of Professional and Occupational Regulation (DPOR)
- Joint Checks
- Unjust Enrichment
- Virginia Employment Commission (VEC)
- Virginia Workers' Compensation Commission
- Uniform Statewide Building Code
- Change Orders
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- November 2019
- August 2019
- June 2019
- April 2019
- February 2019
- January 2019
- December 2018
- October 2018
- September 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- November 2017
- October 2017
- September 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016