Construction projects are complicated undertakings that require stringent focus, management, strategic planning, and execution. While it is impossible to ensure that things go exactly according to plan, having a strategy on the back end provides some security and gives you the ability to adapt. With that in mind, here are some tips and legal strategies that you can use for managing a construction project in Arizona.
Combating Problems & Legal Matters
Construction projects are all unique, and the different teams working on each project can cause conflict. It is up to the construction manager to resolve these conflicts and understand proper dispute resolution. To deal with these conflicts, the construction manager should focus on risk management and reducing negative legal consequences. Having the right system for conflict resolution and risk management in place is crucial. It is vital to have the right construction manager for the job. You also need to have experienced legal representation as a part of your team to plan properly and maximize risk mitigation.
It is difficult, if not impossible, to avoid some type of conflict during a construction project. A construction manager is trained to resolve these conflicts so that work continues unimpeded and the project stays on schedule. Common issues you will encounter include a lack of communication, conflicts of interest and limited resources.
Resolving conflicts can mean doing the following:
- Mediation: A third-party mediator will be hired to resolve the disputes between the two parties. This strategy is the cheapest and least time-consuming. There is no guarantee of resolution of a dispute in mediation.
- Mini-Trial: A mini-trial is held in an informal setting with an advisor or an attorney who must be paid. The agreement is nonbinding and can be broken. A mini-trial takes more time and more money than mediation. After a mini-trial, the parties may attempt to settle, the advisor may serve as a mediator between the parties, or the advisor may issue a non-binding opinion on how the dispute should be resolved. Like a mediation, there is no guarantee that anything will be resolved in a mini-trial.
- Arbitration: Arbitration is the most expensive and time-consuming way to resolve a conflict. Each party is represented by an attorney while witnesses and evidence are presented. Then, the arbitrator makes a ruling. An arbitration can be either binding or non-binding, depending on the agreement of the parties. If the arbitration is binding, the ruling of the arbitrator resolves the dispute between the parties.
All construction projects have certain risks. To counter this risk, it is imperative that a risk management plan be in place from day one. Such plans define the various roles of management and staff and identify potentially risky situations and categories by classifying them in order of importance and likelihood—ranging from building code compliance to legal strategies for managing a construction project (including having the right legal counsel in place from the start to provide advice).
Project managers commonly are tasked with responsibilities including contract negotiation and licensing. These responsibilities also include purchasing insurance, designing job safety protocol, and understanding the legal issues behind their efforts. This is particularly important as it relates to liability and defective work claims, especially when delays are encountered or budgets are exceeded, a common occurrence in custom home contracts in Arizona. Even with good insurance in place, certain risks and liabilities can be difficult to avoid.
With the right quality control plan in place, you can remain a step ahead. It is important to consider all areas of liability along the way, while ensuring that the construction and final project are of the highest standards and quality.
MacQueen & Gottlieb have significant experience with legal strategies for managing a construction project in Arizona. Our firm can help you draft, negotiate and structure contracts to protect your rights, bottom line, and budget. Contact us today at 602-726-2229 to schedule an initial consultation or make an appointment online.