If you own a Texas construction company, you no doubt understand the value of a well-written contract. When it comes to contracts, the more detail, the better. On the contrary, ambiguity, vagueness or lack of detail makes an agreement vulnerable to disputes. An issue that has been a central focus of many construction projects in the recent past is what many in the industry commonly referred to as a “betterment” dispute.
The term “betterment” refers to changes or additions to a property that increase its value. For example, if you’re planning on listing a home for sale, you might decide to upgrade the lighting fixtures in the bathrooms first or replace the flooring. Not only might these projects beautify the home, they add value and may possibly enable you to list it at a higher price. Legal problems often arise, however, if a homeowner refuses to pay for betterment changes or additions a contractor has made on a project.
Incorporating “change of order” clauses in a construction contract
As a contractor or homeowner, you’ll want to discuss a planned project in great detail before signing an agreement. These include issues like materials and labor costs, estimated completion dates, as well as what the terms for changing an order might be. Including a “change of order procedure” in a contract helps avoid legal complications, especially regarding nonpayment for work completed.
Changes sometimes occur on a construction project that add to the total cost. If you’re a contractor, you’ll want to make sure your client understands the possibility and that your written agreement includes terms for changing an order, including betterment work that might be done.
Understanding a mechanic’s lien when non-payment problems arise
In the construction or home renovation industry, a mechanic’s lien protects contractors, subcontractors or suppliers against non-payment for work completed in accordance with the terms of a contract. This is a complex area of law that can affect homeowners, even if they are not the ones who have missed a payment. For instance, if a general contractor fails to pay a supplier, the supplier can file a mechanic’s lien on the homeowner’s property.
Protect your interests by seeking a review of your contract before signing
When a betterment dispute or other legal problems arise in connection with a mechanic’s lien or Texas construction project, all eyes must turn to the written agreement to achieve a fair solution to the problem. This is why detail and wording are so important when drafting a construction contract. You may be able to avoid legal problems by asking someone who is well-versed in construction contract laws to review your proposed agreement before adding your signature.