Few things will undermine the profitability of a recent construction project as quickly as a claim from an unhappy client. Firms often compete for the best projects, meaning that their profit margins may take a hit in their attempts to secure a contract.
Completing a project on time and securing payment in full from the client is often crucial for a company’s ongoing solvency. Unfortunately, some construction companies or development firms may find themselves facing litigation from consumers who claim to be disappointed with a final product. Businesses involved in the construction industry can reduce their risk of expensive construction defect litigation by recognizing and proactively addressing some of the leading causes of client complaints.
1. Significant construction delays
There are certain factors that are outside of the control of an organizations control. No one ever knows when shipping issues or inclement weather might lead to an issue obtaining structural steel, for example. Most construction firms will build a little bit of leniency into their contractual deadlines. Others have to have firm timelines because the completion date is a big part of the client’s decision-making.
Especially when adherence to the timeline is crucial for a client’s satisfaction with the project, construction companies need to be forthright with any situation that might lead to delays by communicating as quickly as possible with the client and having plans in place to work around the challenges that arise.
2. Dissatisfaction with the finished product
Some people expect prestige finishes at a bargain price, while others just fail to communicate with construction companies regarding what they want. It is crucial for organizations to clarify exactly what they will provide or what the client wants from the project in the written contract. Otherwise, a job performed to the same standard as dozens before may upset a client and lead to litigation.
3. Material substitutions
Switching out a name-brand window with a lifetime warranty for a cut-rate discount option can have implications for the property’s comfort and also for its resale value. Clients who request specific brands or materials will often express dissatisfaction and potentially pursue claims if the construction firm substitutes other materials.
Contracts can include rules about material substitutions to protect against such claims, including rules for how to arrange a substitution and whether such changes will have any impact on the final price for the project.
Seeking to minimize dissatisfaction and miscommunication proactively can help a construction company to protect itself against the risk of expensive construction defect claims in civil court.