Most general contractors believe that things will go well on new construction projects, but that doesn’t always happen. During the course of the project, things get a bit off course. Problems arise that aren’t dealt with correctly or promptly. People tend to think that things will just take care of themselves and this doesn’t always happen in the construction world.
So what are the main reasons for workers walking off a construction project?
Attorney Joseph McManus at Carlton Fields has a lot of experience in this area. He comments, “Stopping work and ultimately terminating the contract is one of the most radical things you can do.”
What Does Your Contract Say?
Just about all of the circumstances where contractors are allowed to stop work are covered in the standard contract. If one of the parties violates the terms of the contract, then it is allowable for workers to just stop working. Of course, most general contractors will want to avoid this altogether. It looks bad on their reputation and it causes financial problems when a construction project cannot be completed on time.
Contractors and sub-contractors walk off the job for these basic reasons:
- Approved invoices that have not been paid.
- Unsafe working conditions-This can include rickety ladders and scaffolding or equipment that’s worn out like harnesses for roofers.
- Deviations from the original work order (SOW)-Maybe your company was hired to demolish a building but now you’re being asked to clear the debris and set up for a new concrete foundation.
- Surprise finds-Your crew may be digging and uncover unsafe underground tanks, lines, pipes, hazardous materials etc. In some cases, crews have uncovered skeletal remains or artifacts important to archaeology.
In these scenarios, contractors are allowed to pull their workers off the job. In many cases, the contract specifically states that a notice should be given. The terms of the contract are critical if deciding whether to take such a big step because the case will wind up in litigation and that means a judge and lawyers will interpret the contract and the actions of parties involved.
The Mechanic’s Lien
In cases where contractors are not paid as promised, there is a powerful remedy. It’s called the Mechanic’s Lien. This legal device basically puts a lien against the project property so that the owner cannot sell it or get financing until this has been resolved. The property is tied up legally until the money is paid. Most property owners will do their best to avoid this scenario.
There are some ways to avoid this that work, such as checking the customer’s credit and payment history before ever signing a contract. If a potential customer already has some financing and credit problems, there’s a stronger chance they’ll default on their contract. The experts also recommend using AIA contracts because they’re much more accepted in the construction world. Lawyers and arbitrators are familiar with AIA contracts. That makes it easier to resolve disputes.
Stay on Top of Things
A final suggestion for avoiding walk-outs? Don’t let the customer get too far behind in their payments. As soon as you feel there’s a problem, address it. Don’t just ignore it and hope it will go away. This can be tough for general contractors because they’re so busy trying to keep the project running smoothly. But having clear communications with your accounting staff can be a good way to stay on top of things.