Contract administration phase

© THE CONTRACTOR’S LEGAL KIT, LLC, 2022. All rights reserved

Once you have bid the job, been selected as the contractor, obtained a signed contract, and furnished the owner with all the legal notices required by state and federal law, as well as the informational forms you think appropriate, you’ve effectively laid the groundwork for a successful job — and the first nail hasn’t even been driven. If you’ve done a good job with all of the preconstruction work above, you’ll find most jobs will go more smoothly because you’ve given the owner and yourself a good “road map” to follow. The owner has been educated and has effectively agreed to your style of conducting business. In many cases, you’ve also tempered some of the owner’s unrealistic or uninformed expectations.

Countless costly disputes will be avoided because of the groundwork you have laid up to this point in time. In essence, the possibility of having a successful and profitable job will have skyrocketed. After the work begins, however, there are still numerous steps you should take — in addition to performing the work on time and in a workmanlike manner — to maintain good customer relations and solidify a successful project. Some of the following ideas are intended to improve communications and avoid misunderstandings, and some of them are meant to clarify the changing legal obligations of both parties. Keeping up with customer relations as the job proceeds can get you more referrals, help avoid legal disputes, and improve your bottom line.


Take Photos Before Work Starts



Before starting work on a project, photograph any existing damage to surrounding parts of the structure, driveways, roads or site that you could be held responsible for later (make sure you date the photos). These areas should be noted in your construction agreement so there’s no confusion over responsibility for these pre-existing, defective, or substandard conditions. Or, if the contract already has been signed, document the existing damage in a quick email to the owner. Examples include damaged roadways, driveways, or sidewalks, cracked tiles or stucco, scratched floors or cabinets, stained carpets, broken or scratched windows, sticking doors, damaged roofing shingles or tiles, etc. Remodeling is tough enough without being held responsible for damage that occurred before you arrived on the site. If you run into this problem, a dated picture and a note in the contract are truly worth a thousand words — maybe even thousands of dollars.


Make and Return Phone Calls

Keep in mind that the owner’s expectations change as the job progresses. If you and your crew are going to be away from the job for a half day or more — for any
reason — call the owner and let him know. Many owners don’t understand why you aren’t working during downtime and assume the worst. A simple phone call
can alleviate their concerns and help maintain the professional image you have fostered up to this point. As mentioned earlier, be sure to return phone calls, pages, and e-mails promptly.

Regular Meetings and Contact With Owner


Meet with the owner on a regular basis and communicate often about the job. Regular punch list walk throughs with the owner are an effective way to
communicate your concern over quality and can lead to a much smaller punch list at the end of the job.


Refer to the Contract


If you sense a dispute arising, you can “de-personalize” the situation by referring to your contract to see if the issue in question is covered by a section of the contract
(many, but not all, potential disputes  are often covered by various clauses in the contracts and forms on this site). If it is, you have brought the disagreement back
to the business level by simply referring back to the contract for instructions on how the owner and contractor are to proceed given the particular contingency
that arose. If you are uncertain about the possible legal ramifications of what you want to do, place a call to your attorney to get a fresh perspective and some quick advice. Don’t wait until you quit a job or the owner has fired you to get advice from an attorney. There are typically many ways to prevent this from occurring if you notice the signs along the way.



An Orderly and Courteous Job Site


Post a job-site sign and keep the job site picked up. Make sure your subcontractors and employees clean up their personal garbage after breaks and lunch, and the
bulk of their job debris after performing their work. Construction is stressful enough for owners as it is; if the site is disorganized and debris-filled every time they
come by, their confidence in your skills is bound to diminsh. If trucks are blocking the owner’s access, rock music is blasting, and discarded debris from last
week’s lunches is littering the yard, the owner will have a much harder time appreciating your work. If the owner is living on the job site during the time of construction in a remodel setting (typically to be avoided if possible), these concerns are especially worth your attention.

Insist that your employees and subs show common courtesies to the owner and his family and are respectful of the owner’s property. For instance, keep the volume of any job-site music at a respectable level and warn your employees against using offensive or inappropriate language. Demand courteous driving habits around the site. Inform your employees and your subs of any policies your customers have about smoking. If the owner has children or pets around the project, you have another huge concern. Make sure the pets are kept inside the house or fenced yard and that dangerous conditions such as falling lumber, holes and trenches, open electrical wires, and panels are avoided or protected in order to avoid injuries. These items may seem petty, but to some owners they make the difference between a contractor they will want to rehire and one they never want to see again. A little common sense and common courtesy in these areas can go a long way toward avoiding petty disputes or a true disaster. Make sure to inform your subcontractors and employees of your concerns and requirements in this area. The last thing you need is a conflict between the owner and one of your crew or subs over something important like this that you discussed with the owner and then forgot to mention to the people who will be working on the site on a daily basis.

If you fail to pay attention to these things, you’ll quickly find out there’s no way to salvage a job when your crew’s failure to close a gate leads to the owner’s golden retriever getting hit by a car, or when your framing subcontractor throws a piece of plywood off the roof only to strike the owner’s five-year-old son in the head. If you need to turn off utilities while the owner is living in the house, be sure to give the owner advance notice and keep them off for as short a time period as possible. If your plumber has open pipes and/or has shut off the main water supply or opened waste lines, be sure to have signs posted on the main and the plumbing fixtures. I’ve seen quite a few problems occur when the plumber leaves for lunch or for the day with open lines, only to return to a flooded house with warping floors or a true stinking mess because people were unaware of the open lines.


Put Important Communications In Writing


Keep up with the following written communications to the owner and architect during the course of the project. The importance of putting certain communications in writing can’t be overstated.

Change orders

Obtain all change orders in writing. If you can’t get the change order in writing prior to beginning the work, get a verbal approval and make a note of this conversation. Then, quickly follow up with an email describing the scope of work, cost and get the owner’s email approval. Then follow up with the written change order.

Changes in specs or finishes

If a specification is changed by the owner which has no impact on the cost of construction (e.g., a change in type of cabinets or paint called out in plans), send an email to the owner or issue a change order with no change in the contract price, detailing this change. Disputes sometimes arise over changes made by the owner or design professional in the design, specifications, or finishes. Avoid this confusion and these disputes by putting deviations from plans, specifications, and finishes in writing — even if they do not affect the contract price.

Architect and engineer directives or approvals

If the architect or engineer verbally tells you that a particular deviation from the plans or specifications is acceptable, make a note of that conversation and send a quick email copying the owner confirming your understanding of the change. Get the owner’s approval as well. If you have misunderstood something, or the architect or engineer later has a memory lapse, you’ll be glad you documented the conversation prior to implementing the change in the scope of work. IN your contract, clarify in writing who has the legal authority to change the specifications/design and order extra work in the event that the person making the request is someone other than the person that signed the contract.


Potentially faulty design

If the plans, specifications, or instructions from the owner call for you to build something which you think is substandard in some respect, send the owner and architect an email indicating that you will follow the plans and specifications if instructed in writing to do so, but noting that you recommend the owner not employ the specified details due to a likelihood of premature failure. Then, after sending this letter, if the owner still refuses to change the specification, it is unlikely you will be found negligent for constructing or failing to warn the owner of a bad design or detail unless the design or detail is not code compliant.

If the owner heeds your warning, be sure the architect does the redesign. Don’t do it yourself or you may well be liable for any failures if the newly specified work fails in any way! Warn the owner of details that don’t make sense, but be aware that if you deviate from the plans without written approval you may well be found liable for any failure that results from your deviation. Finally, if you are certain that a detail violates a section of your local code, bring this to the attention of the owner and architect and insist that the owner have the architect provide a new detail that conforms to the local governing code. If you think details are missing from the plans or don’t make sense, send the design professional a Request for Information (RFI) stating the problem and requesting a written response ASAP. Provide a copy to the owner, and keep copies of these and the responses in your file in case you ever need them.


Changes Requiring Building Department Approval


If the owner requests a change after work has begun which you think might require additional building department approval (and new architectural drawings) or
engineering, talk to the inspector and your architect or engineer prior to giving the owner a change order or telling the owner that the requested change is “no problem.”


Changes in Plans Called For by Plan Checkers


Pay close attention to any changes made to the plans by the plan checkers at the building department. Be sure that you pick up these red lined changes by carefully reviewing the Job Copy of the plans issued by the building department. Charge for the changes if they impact the price. If you overlook these changes and the building inspector forgets to bring them to your attention, you may be held responsible for the higher cost of retroactively installing these changes out of their normal sequence.


Punch List Work


Don’t take forever to complete the punch list. Delaying the punch list work will only aggravate any tensions that have developed between you and the owner over
the course of the job. It’s also at this time that the owner is showing off his new project to friends and being asked, “How was the contractor”? Even though it
can be difficult, putting in some extra effort at this point will always pay off! Have the owner sign your punch list form and place a note on the form indicating that the owner and contractor acknowledge that once the items on the form are completed, the contractor will have successfully completed 100% of the punch list items for the project. You want to take steps to avoid the dreaded “never-ending punch-list syndrome” that some owners are afflicted with. A punch list form is found with the other forms on this site. 


Owner’s Possessions


First, on remodels don’t borrow the owner’s tools! This inevitably leads to problems. Remember, Murphy’s First Law of Construction states: “Any tool that breaks on the job will always be the owner’s tool in the hands of your laborer.” You may want to mark your common tools with a band of bright paint so they’re less easily confused with the owner’s tools on the job site. Second, don’t agree to move or store the owner’s possessions! I always make this an excluded item in the contract.

Similar to the owner’s tools, Murphy’s Second Law of Construction states: “Any piece of furniture that can break, will break in the hands of your laborers.” If the owner’s property must be moved, don’t do it — delay starting the job if necessary until the owner moves his own property. If you absolutely can’t delay the job, write up a change order for moving the property and put in a clause about not being responsible for any damage that occurs. Have the owner sign the change order, thereby releasing you from liability for damage done to his property while it is being moved or based on where and how it is stored.  

Third, on larger projects, insist on a work area that is generally free of the owner’s furniture and possessions. You can’t properly perform your work if the owner’s belongings are constantly in the way. Also, we all know what condition the owner’s exposed property will be in after six months of remodeling: not a pretty sight. Better to insist that the owner find temporary storage in an area that is not in your way and not subject to the dust and debris of the construction area. You set the ground rules.

Job Safety and Security


Monitor the safety and security of the site on a daily basis in order to prevent accidents and show that you are conscientious about the inherent risks involved in
construction. Keep a written log of your safety meetings. Make sure doors and windows are locked when you leave. Make sure skylights are closed.



The Warranty Phase

If all has gone well up to this point, the project has been completed well and on time, the contractor has been paid in full for all contract work and all change orders, the punch list is complete, the subcontractors and materials suppliers are all paid, and the property is free of liens, then the owner and contractor should be appreciative of what each has done for the other. The owner who is satisfied at this point is one of your best sources of future work and referrals. Your good work and professional handling of the paperwork and communication aspects of the job will have paid off in numerous ways and hasn’t added much, if anything, to your job costs or overhead expenses.


Warranty and Maintenance Information


Another good practice used by conscientious contractors at this phase of the project is to give the owner an information packet with the appliance and fixture warranty information and a description of common areas of owner maintenance. Samples of all paints used on the project are a nice touch too. By informing the owner that wood shrinks, grout can crack at the tub to wall connection, filters need replacing, and gutters and drains need cleaning, etc., the owner may be less surprised and upset when minor maintenance items like this occur. Some contractors make it a point to leave touch-up paint, caulk, and grout so the owners can perform this minor maintenance work themselves.


Following Up on Warranty Complaints


Even though the contractor has been paid in full at this point in time, he still has a legal obligation to promptly investigate and perhaps repair any work that fails or any defects that arise during the express warranty period and perhaps also under any implied warranty period that is required by law in your state. In fact, some contractors make it a point to call the owner six months and twelve months after the project is complete to see if any warranty work has arisen and to answer any questions the owner may have. While some contractors would view this as knowingly and willfully sticking their head back in the lion’s mouth, taking this approach is sure to leave a lasting positive impression in the mind of the owner which will pay off in the long run with increased referrals. Consult your local construction attorney to determine how long you may be liable for both latent and
patent defects under your state law. Depending upon the type of failure, the contractor’s responsibility may well extend past the one-year express warranty period specified in most construction contracts. Consumer protection laws are on the rise in many states. Non-responsiveness to a legitimate complaint can
wind up costing you plenty in terms of loss of reputation and the dollars you may have to reimburse the owners — especially if they have hired another contractor to correct a defect or warranty items for which you are legally responsible.


Better Communication: The Payoff


Marketing is communication and, whether they know it or not, most contractors are marketing more by how they operate day to day than through the dollars they
spend on advertising. By implementing some of the ideas above, the contractor can improve his marketing and expand his customer base without spending a single penny more on traditional forms of advertising.


In my experience, nine out of ten owners really appreciate the contractor’s efforts to better communicate expectations and maintain positive customer relations.
Also, a contractor’s business will run much more efficiently when he adds the few steps required to communicate effectively with the owner before, during, and
after the project. Again, if the owner is less surprised about certain events because you have prepared him up front and tempered his expectations, your relationship will be much less strained. Consequently, the potential for disputes and litigation decreases, while the potential for a successful project (with both profits and peace of mind intact) will be significantly increased.

Not all of the aforementioned forms will be appropriate to every builder or every job. Customize and selectively use the forms to suit your business. Gauge your use of the forms referred to above both by the size of the job and your past history of working with the owner. Generally, the smaller the job, the fewer the informational forms you need to give the owner. The larger the job and the less you know the owner, the more important these forms can be. Regardless of the size of the job, the importance of showing common courtesies and communicating well with the owner both verbally and in writing can’t be overestimated.

Important Notice to Contractor and Disclaimer:

Before using or relying on the template forms and information above, read the template forms with care, fill in, modify, delete, add language to, and revise portions of the template forms according to your specific needs and any state laws applicable to the type of job you are using the document for.  Use of the form templates on this site does not constitute the formation of any kind of attorney/client relationship between you and us. You should seek and obtain independent legal advice from a licensed attorney in your local area familiar with construction law before using or relying on any of the forms or information on this site. The forms and information on this site are provided only as general information, not legal advice and may or may not reflect the most current legal developments, your specific needs or laws applicable to the state where you conduct business. Only the original purchaser of the forms has a limited license to modify, edit, print and use the forms.

© THE CONTRACTOR’S LEGAL KIT, LLC, 2022. All rights reserved