If you work with construction companies, you know that there is risk involved in every project. But you may not realize that, according to the Construction Industry Institute of the University of Texas at Austin, the average project carries over 100 different risks.
While that number may seem daunting, there’s no need to panic. With a good construction attorney representing you, and a few smart decisions, you can minimize the risk in any construction project.
Careful Contract Drafting
Many of the most common construction risks stem from the specific details outlined in the construction contract. For example, when a client demands results too quickly, a contractor may have to work faster than they should or put in a lot of overtime hours. Both of these outcomes create more risk than normal.
The best way to avoid these risks is by carefully drafting your contracts to ensure that you have not made unreasonable demands and that the contractor has not made impossible promises. An experienced construction attorney understands which specifications are reasonable and which are not. As a result, they can help you draft a contract that will ensure everything goes smoothly.
Thorough Due Diligence
Having a solid contract doesn’t automatically mean that the contractor won’t cut corners. Reputation also matters in any construction project. The financial security of your project depends on how trustworthy the contractor is. The last thing you want is to pay tens of thousands of dollars for work only to discover that the contractor embezzled it.
The best way to keep this from happening is to have your construction attorney diligently investigate everyone else involved in the contract. This small amount of due diligence will protect you from making shaky deals or working with unsavory partners.
Effective Risk Allocation
Who takes the risk in a construction project? While it can be tempting to place all the risk on your contractor, this will usually result in your project taking longer than expected. If the contractor is absorbing all the risk, they will likely be more careful than needed — and this increases the time it takes to finish the job.
Effective risk allocation spreads the risk across multiple parties. This means that you and the contractor will accept different portions of the risk. Some of that risk will also be mitigated through insurance, usually by purchasing insurance policies from multiple agencies. You may even pass some of that risk to financial backers or banks.
Your construction attorney will help you determine how to efficiently and legally allocate the risks involved in your project.
Regular Communication and Documentation
The best way to minimize risk in any construction project is by regularly communicating with everyone who is invested in the project. This means you should schedule weekly or even daily meetings with stakeholders such as:
- Financial institutions
Whenever possible, your construction attorney should be present during these conversations. And if that isn’t feasible — whether due to time or cost — they should at least be CC’d on any relevant emails or get copies of all pertinent information discussed during these meetings. Your attorney has years of experience identifying risk and will ensure that things don’t go wrong unexpectedly.
Contact Alves Radcliffe Before Starting Your Next Construction Project
If you are considering a new construction project, you must take steps today to protect your investment and the integrity of that project. The experienced construction lawyers at Alves Radcliffe can help you minimize the risk of your most important projects. Contact us today to schedule an initial consultation.