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What are my options if builders are not abiding by the construction contract?

On Behalf of | Jun 29, 2022 | Real Estate Disputes |

When you decided to buy a home, you thought that a new build would be the right option for you. It was an affordable price, and you got to choose all the finishes and details that would make the property feel like home.

You loved the idea of going through the process of purchasing this real estate at first, but when communication dried up and you stopped seeing progress on the property, you started to worry. Then, the deadline on your 180-day contract passed.

Now what? Should you back out of the purchase? Can you get your deposit back? What are your options?

Check your construction contract

The first thing to review is the contract you signed with the builder. If your contract is a 180-day contract, the contractor should complete the build, barring unusual circumstances, within those six months. On the other hand, there are typically provisions that extend that time period. For example, if the supply chain is slower than usual and wood is not available, there may be a provision that extends the timeline as long as the fault does not lie with the contractor. Check the contract for any similar provisions before deciding your next course of action.

You should also look for a liquidated damages clause. This clause will go over the amount of compensation that the owner, you, should receive if the contractor does not complete the project on time. Then, if the contractor fails to meet the deadline and no other provisions apply to the scenario, you should be able to get a certain amount of compensation back each day until the home is built and ready for you to move in.

What do you do if you are ready to hold the contractor liable?

If the contractor is not meeting their responsibilities during construction, then it is your right to look into terminating the contract or holding them financially responsible. To do that, you will want to take your original contract with you and talk about your case with your attorney. You should also keep copies of all communications and be ready to go through mediation or arbitration if those clauses exist in the contract.