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5 reasons construction projects end up in litigation

Even well-planned construction projects can have issues — and any kind of problem can cost both money and time. That’s why it’s important to be well-informed and proactive about preventing them.

The National Real Estate Investor has identified the five most common reasons that construction projects end up in litigation. They are:

1. Differing site conditions

Typically, these are conflicts that come about because there’s a physical condition of the property that differs greatly from what was expected or is materially different from what was shown in the contract documents.

2. Mistakes in the contract

Whether by error or omission, mistakes in a contract can throw an entire project into disarray. These kinds of errors are particularly frustrating because they are the most easily avoided.

3. Improper administration of the contract

This includes issues that come from one party’s failure to give proper or timely notice, proceeding with a change order without proper authorization and failing to properly account for extra work or costs.

4. Failures to comply with contractual obligations

These are issues that often erupt because a contractor or subcontractor failed to review the contract they signed carefully enough. When they barrel ahead the wrong way — or skip out on their obligations — that leaves the property owner and other parties in the lurch.

5. Incomplete or unsubstantiated claims

Projects that are running late or over budget are frequently a source of compromised quality — and a source of dispute by construction clients.

Between clients, architects, planners, contractors and subcontractors, there are a lot of different players involved in any construction project. That means that there are a lot of different possibilities for a dispute. If your construction project is headed for conflict, get assistance protecting your rights.