A lawyer discusses causes of delays in construction: The seven areas to consider - C. Jaye Berger

C. Jaye Berger, Law Offices of C. Jaye Berger

It is not unusual for me to get telephone calls from property owners, boards and shareholders complaining about delays on their construction projects which seem to go on and on and never end. When they ask for advice about what to do, I always tell them that delays are never due to just one thing. They are usually the result of a gradual slippage and build up of many things that have happened over the course of the project, which have all come to a head. While contractual clauses calling for liquidated damages of an amount per day for each day the project goes beyond the substantial completion date, may be a good incentive to stay on track in the beginning of the job, once the completion date starts to “slip,” the threat of such damages will not get the job done any faster. This is why it is important to look at some of the causes of delays to try to spot the warning signs and to try to do something about them before they worsen. Here are seven areas to consider.

1. It is common for people to have the mind set “Let’s just get started.” That is the first wrong move. Getting started with demolition, without having construction details in place, sets you up for delays while the details are being sorted out and designed.

Take a little time before starting to make sure the plans are complete and sufficiently detailed. Stopping the work to draw details and make design decisions causes delays. Even hidden conditions can be better organized and planned for. There may be probes that can be done ahead of time to try to anticipate problem areas and what will be done to fix them.

2. Not having enough workmen. Before the work begins, ask about how the job will be staffed and if the contractor has other projects that may cause scheduling conflicts. Not paying the contractor on time often leads to there being fewer men on the job. If you are not paying on time, the company will put them on other jobs. You cannot ignore this and need to find out the cause of the problem. Holding back payment does not make the contractor work faster, it only makes the problem worse. Talk to the contractor and find out why they are not performing adequately. Have these conversations at the first sign of problems. Most buildings and property owners wait months and months to confront the contractor and just keep “hoping” things will change.

3. Have change orders increasing the completion date. Everyone knows about change orders to increase the contract price when there is more work, but not everyone realizes that they are also used to increase the contract time for completion. If new or additional work is needed, there should be a signed change order increasing the contract completion time by an agreed upon number of days. Without such paperwork, there may be a difference of opinion about how many days the contractor has to complete the work before delay damages kick in. This same idea applies when the co-op has an alteration agreement with a shareholder or the landlord has a work letter requiring completion by a certain date.

It may seem obvious, but the change orders must be signed. On one project, the client came to me with a delay problem and had over 40 change orders. Some were signed, some were unsigned and some were re-issued  in a slightly different form. This made it impossible to reconstruct what the completion date should be.

4. Have signed waivers of mechanic’s liens. Partial waivers of mechanic’s liens tie in to the subject of delays because they tell us a lot  about whether the project is on track. If the waivers have not been signed, this is a sign of a payment problem, which will lead to fewer workers showing up on the job and delays in completion.

5. Look at how the project is being administered or not. Some people try to save money by not having architects administer the project. They just call them when they feel they need them. This is penny wise and pound foolish. That means it is more likely to go off track without anyone really noticing and will be more complicated to get back on track.

6. Review your contract. If there is a termination clause and notice of default is needed, then do so. If the contractor needs to be terminated, these steps must be followed. Do not delay in doing this.

7. Seek counsel sooner rather than later from a lawyer who knows construction law. Many clients come to me after the problems have been festering for a long period of time. Usually they are asking how to go about terminating the contract and hiring someone else. Sometimes a project can be saved if advice is sought quickly. If the relationship needs to end, it should be done expeditiously so that the project can keep moving forward.

C. Jaye Berger, Esq.  is an attorney at Law Offices C. Jaye Berger, Manhattan, N.Y.