A Handshake Is Not Always Enough

The Builder's Corner

The good old days of calling a local contractor and agreeing to construct an addition to your home or renovate a room based on a handshake are long gone. The construction/renovation process has become very complex and it is important that homeowners contract with a knowledgeable Florida licensed contractor.

It is the policy of Collier County that if a homeowner “intends to construct, enlarge, alter, repair, move, demolish or change the occupancy of a building or structure, or to erect, install enlarge, alter, repair, remove, convert or replace any electrical, gas, mechanical or plumbing system regulated by the Florida Building Code, or cause any such work to be done”, a homeowner “is required to obtain a permit regardless of the cost”. In some circumstances, Collier County also requires a Fire Plan Review and Inspection for any air conditioning system replacement in a multi-family residential building of three units or more. There are many intricacies and traps for the unwary if a homeowner proceeds with a construction/renovation project not understanding current governmental regulations.

Today, there are so many liabilities that flow to the homeowner even if a contractor is handling the renovation/construction process. It is the responsibility of the homeowner to make sure the construction professional hired understands and complies with the Collier County requirements.

It is also important that prior to commencement of work, the homeowner and construction professional, agree upon the specific terms of the scope of work and the responsibilities of each party. The homeowner should think about the following before contract and commencement of work:

Parties: Ask the construction professional for a copy of his/her Florida contractor’s license and insurance. Research the credentials of the construction professional, the Florida Department of Business and Professional Regulation has a website that allows you to verify a license holder and review complaints filed against the construction professional.

Timeframes: What are the work commencement and completion dates? Depending on the scope of the project and the parties expectations should benchmark dates be set by the parties?

Pricing: What is the homeowner’s maximum budget for the construction project? Has the homeowner priced the materials to be installed? Are the homeowner expectations realistic? Ask the construction professional to provide a quote based on your specific design and material requirements. If the homeowner does not have specific ideas for materials, ask the construction professional to provide suggestions and pricing. Once the quote is finalized, the quote should be incorporated into the written contract and any modifications to the scope, materials and pricing should be agreed to by the parties in writing before the modifications are made.

Responsibilities: Who is responsible for demolition work, removal of demolition material, permit fees, completion of permit applications, purchasing and providing fixtures, will the construction professional be responsible for hiring of all subcontractors?

Insurance: It is important that the construction professional has adequate insurance to cover insurance claims in the event there damage or injury during the construction process Prior to work commencing, a homeowner should require every contractor performing work at the home, to provide proof of commercial general liability insurance that names the homeowner as “Additional Insured”.

Warranties: Does the construction professional provide warranties for the materials installed and work performed? If so, the warranties should be set forth in the contract.

Payment: Prior to commencement of work, the parties must agree as to method and timing of payments.

Dispute Resolution: The contract should include a dispute resolution provision, which could allow for civil litigation, arbitration or mediation.

This article is a summary and not intended as a comprehensive review of construction permitting or contractual requirements. The homeowner and construction professional should take the time to thoughtfully agree upon the important details of the project and memorialize those items in writing. Florida Statutes set forth mandatory construction contract provisions and construction lien law procedures, such as mandatory disclosures, the types of construction notices, lien priority, rights of lienors, mandatory forms and process for filing liens. To properly write a construction contract, a Florida licensed attorney specializing in construction law should be contracted to draft or review a proposed construction contract.

Eleanor W. Taft, Esq., has been practicing law since 1992. Currently, she is Of Counsel at the law firm of Woodward, Pires & Lombardo, P.A., a Naples law firm serving clients since 1971. Ms. Taft practices in the areas of real estate law, construction law, commercial law, title law, condominium and homeowner associations.

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