CR: Building Codes and Construction Law

A determinant of a successful remodeler is quality of work as judged by accepted public standards, which define the minimum quality of the finished product and the manner in which the work is carried out. Building codes aim to protect consumers from inadequate workmanship and materials, but are not designed to ensure quality, comfort or durability.
Building code books are developed and revised periodically by the International Code Council (ICC) and other groups of building officials. They do not become law until government institutions, municipalities, counties and/or states adopt them. Once adopted, compliance with the code is checked by building inspectors employed by a municipality. Building codes are not all-inclusive and contradictions do arise. In these cases, the building inspector has the final say.
The ICC has developed the International Residential Code (IRC) for one- and two-family dwellings. Most codes are on a three-year cycle. The code in effect in any one jurisdiction may not be the current version. In many cases, the governing bodies have not adopted the current version of the code, and the code in effect may be three to nine years out of date.
In the construction business, building code problems are inevitable. Everyone can relate to an inspector holding up a job or delaying a permit until a minor discrepancy is handled to meet certain code requirements.
Legal problems are inherent in every stage of daily business. Know when to consult a lawyer, especially when legal questions of immediate importance are presented. Know your legal rights concerning problems that may be encountered in scheduling of the work. Be aware of your rights in bidding in the industry, specifically when legal doctrines dictate when a bid becomes binding, when bids are not responsive and when you may revoke a bid.

Contracts

A contract is an agreement between two (or more) parties to perform some act or business. By agreeing to perform, the parties have developed a law among themselves, private law, and therefore the contract is binding.
State law should be considered and followed when writing a remodeler’s contract.  Important disclosures may need to be in the contract or a company may face a fine or be moved against before, during or after the project has been completed. In developing a contract, ask yourself how you can obtain the most protection without risking the good spirit of cooperation and mutual understanding. It is best to have your contracts reviewed by a lawyer to ensure they are in compliance with your state’s codes and laws.

Lien Rights

The basic policy behind the lien law is that the labor and material furnished by a remodeler, subcontractor, material supplier or mechanic being affixed to the real estate improves the value of the land and cannot be reclaimed. Payment is usually made after the labor and materials have been incorporated into the real estate. Therefore, the only manner in which protection can be afforded is to give a meaningful security interest in the land to secure payment for the value of the labor and materials previously furnished.
In some states, it is necessary to file a notice of intent to file a lien with the courts a given number of days before the lien is actually filed. This prevents the owner from selling the property between the time the job is complete and the lien is filed. This notice is sometimes filed at the beginning of the job to remind the owners that a lien will be filed if they do not meet the payment provisions in the contract.
Never sign a contract that contains a provision that waives any of your “lien rights” or the right to proceed on any general contractor’s payment bond. The same is true of any waiver of lien given in any partial payment for labor and materials.

Conflicts

There are different ways to resolve conflicts that develop between parties of a contract.  The first and cheapest is to sit down and work out the problem among the parties concerned.
The next option is arbitration. Arbitration leaves the terms of the resolution to be defined by a third party, who is a disinterested, unbiased professional chosen by the parties in the conflict. Arbitration may be carried out independently or through organizations such as the American Arbitration Association.
Small claims court may permit resolution of small conflicts without lawyers and long waiting periods. If none of these methods can be used, then the more costly and time consuming litigation process must be applied.

Licensing

Not every state requires remodelers be licensed. In some states, licensing is not required; however, there are legal protocols, including accounting procedures and document presentation, that must be followed.
Contact your local jurisdiction to learn more about local licensing requirements, find out which license is right and the procedures for obtaining one. Most states require that applicants take a written examination and pay a marginal fee for the license. Licenses carry expiration dates and, in most states, can be renewed by simply paying the renewal fee. | QR

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