- Practice Areas
- Business & Real Estate
- Estate Planning
- Family Law
In a construction contract, the scope of work and allowances should be carefully reviewed. Also, consider inserting an outside completion date with a penalty for late delivery. Finally, make sure you have the right to inspect the home during the building process and prior to closing — just because a home is new does not mean it was properly built.
A contract for the construction of a home may include a provision that a lien may not attach to the real estate or any improvement of the owner. To be effective against subcontractors/suppliers, the contract must be recorded not more than 5 days after execution.
Any payment request should be accompanied by a sworn contractor’s affidavit and lien waivers from the subcontractors and suppliers. If lien waivers are not provided, the check should be payable to the general contractor and subcontractor/supplier to ensure the subcontractor/supplier receives payment.
A subcontractor/ supplier may have the right to file a lien against the real estate even if you pay the general contractor in full. In addition, if you receive a notice of personal liability, you may be responsible to the subcontractors/suppliers for the amount paid directly to the general contractor after receiving the notice if the general contractor fails to pay the subcontractors/suppliers.
If you close prior to completion, make sure that sufficient funds are held back (escrowed) at closing to motivate the builder to complete the remaining items — typically 200% of the cost of the items.
If your new home is defective, there are statutory warranties provided by a new home builder (unless properly disclaimed) that may provide you some help. However, before filing a lawsuit, there is a statutory notice and dispute procedure with which you must comply.
To arrange an initial consultation
for your legal matters, including representation
for individuals and families, reach out to us
today at (219) 728-3250
At Smith Legal Group, we redefine excellence in real estate and business law, safeguarding your ventures.
Your family’s future matters. Trust Smith Legal Group for comprehensive and caring estate planning.
At Smith Legal Group, we champion your family’s well-being through expert family law advocacy.