Managing Post Construction ClaimsAssociation of Construction and Development
October 29, 2012 — 1,857 views
A post construction claim is a claim arising after the contractor has finished all work and the project has been declared completed. Because of this, post construction claims can be very damaging to the contractor’s reputation and business, especially if they demand expensive remedial work or financial penalties. Due to this, a contractor should take every measure to minimize the possibility of facing a post construction claim as well as being able to effectively defeat such claims when they are raised.
Types of Post Construction Claims
Post construction claims may include the following issues:
• Physical defects in the project, including claims of inferior materials or poor workmanship.
• Failure to abide by local building codes.
• Claimed defects in design.
• Disputes over payment by subcontractors and other workers.
In every case, the contractor must be prepared to effectively defend the quality of the project, including effectively documenting the satisfactory achievement of all project goals. This can be especially important in larger projects where the contractor may have employed a number of firms as sub-contractors.
Defending Against Post Construction Claims
The first step in defending against a post construction claim is to ensure that the entire process has been securely documented. Supply invoices, payrolls and changes to the initial design should all have adequate documentation. The resolution of any post construction lawsuit or claim may very well depend on which party can most effectively document their actions.
Secondly, the client should be involved at every step and his or her approval and input must be documented in writing. Changes to the design of a project must be fully explained and approved. Most importantly, if the client desires a change that the contractor feels is unwise, any concerns should be discussed with the client and the final decision fully documented in order to protect the contractor.
Finally, any sub-contractors should be closely monitored by the primary contractor. If there are any doubts as to their abilities, they should be immediately replaced. The primary contractor should ensure that any sub-contractors are using skilled labor and abiding by any payment contracts to avoid the potential for post construction claims by their employees.
By carrying out these measures, a contractor can avoid most post construction claims. If a post construction claim is filed, the above steps can make an acceptable outcome far more likely. By effectively defending against these claims, a contractor can protect its profit and reputation alike.