Recourse When Your House Build Is Delayed
Jan. 17, 2023
Though new home construction has slowed as the Federal Reserve raises interest rates, those in the industry are still dealing with delays of much-needed materials due to supply chain issues, along with rising prices for construction materials and even appliances to finish the home.
Following the onset of the pandemic in early 2020, the estimated number of active homebuyers rose 67.8% from March to June 2020, according to Federal Reserve tracking. The latest Census Bureau report on building permits, covering November 2022, however, shows a 22.4% decrease from November 2021. In terms of housing starts, the bureau shows a 16.4% decrease between November 2022 and a year prior.
Weather, supply chain problems, and even challenges in assembling the workforce necessary to complete a construction project continue to hamper the industry, as well as frustrate homebuyers and homeowners undertaking reconstruction or remodeling jobs.
If you are experiencing delays in a construction project you’ve contracted as a homebuyer or homeowner in St. Louis, Missouri, contact the real estate and construction attorneys at TdD Attorneys at Law to discuss your options. We also work with clients in Chesterfield and throughout the surrounding area.
A lot will hinge on the wording in the contract you signed or orally agreed to. Your rights as a buyer are protected against unreasonable delays. Reach out to us to schedule a free consultation. We’re ready to help you chart a path forward to resolve your situation.
Common Reasons for Build Delays
As mentioned earlier, supply chain issues caused by disruptions during the COVID-19 pandemic have resulted in many construction materials arriving later than expected. The weather can also play a factor in causing construction delays. In addition, the industry as a whole is aging, and it is harder and harder to attract younger workers to staff for a project. In fact, sometimes it is hard to even find the right people for specific tasks as the industry gets stretched thin.
Many other factors can cause a construction delay. Even a homebuyer can create delays by rejecting replacement materials. For example, say the homebuyer’s desired windows aren’t available, so the contractor finds a suitable match quality- and appearance-wise, but the buyer rejects the replacement. Can the contractor be held liable? Or is the buyer at fault for the delay?
The bottom line is that a delay must be deemed unreasonable and/or due to the fault or negligence of the contractor before the buyer can expect some sort of compensation, whether for damages or simply for an adjustment in the price of the finished project.
Even here, though, the wording in the contract might spell out options for handling delays of any magnitude. The contractor may have included clauses protecting them from certain claims. If you’re agreeing to a construction project, you need to have your contract thoroughly reviewed by a knowledgeable attorney before you sign it.
Also, remember that even if you make an oral “handshake” agreement with a contractor to add a couple of rooms to the back of your home, that is still considered a contract, albeit an unstable one. If an oral contract ends up before a judge, both sides can argue a different understanding of the agreement since there is no written proof of the contract’s terms. Always get your agreement in writing, and always have an attorney review it to make sure you’re properly protected.
Suppose the supply chain does delay the delivery of electrical components, windows, roofing, or other essential materials for your building project. Generally, there are three elements to consider in whether you as the buyer have a valid claim in the delay of your construction project:
IS THE DELAY CRITICAL OR NON-CRITICAL? Say the windows are delayed. Will this prevent the entire project from being finished on time? If so, then the delay might be considered critical. However, if the contractor finds a source for nearly identical windows in quality and appearance, and construction will face only a minor or even no delay, then it could be considered non-critical.
IS THE DELAY EXCUSABLE OR INEXCUSABLE? If the contractor has to halt construction because he can’t assemble the workers needed, or he simply neglects your project for some unexplained reason, then the delay can be considered inexcusable. In the example of windows that arrive late beyond the control of the contractor, the delay might be considered excusable.
IS THE DELAY COMPENSABLE OR NON-COMPENSABLE? If the delay is excusable, the contractor may legally have the right to an extension, or even to additional compensation, for instance, to cover the higher cost of the replacement windows. If the delay is inexcusable, then you as the buyer may be able to seek damages or a renegotiation of the terms of the contract.
Buyers of construction or remodeling projects often cause delays themselves. They may survey what’s going on and decide they want to change the specifications. Say they walk around the framing and decide an additional window or entryway is needed. If they demand changes that delay the project, the contractor is not the party responsible; the owner is.
The owner of the land where the construction project is taking place may also inadvertently cause delays. Say, on a reconstruction project, the owner decides to shut down operations for the year-end holidays, causing a delay. The contractor cannot be held liable for consequences caused by that decision.
Options for Recourse
Again, the issues of critical and non-critical, excusable or not, and compensable or not come into focus if you’re the homebuyer. You want to make sure you don’t cause delays by changing specifications or hindering construction.
Generally, to hold a contractor liable, you will need to show that a delay was critical and inexcusable, and that it is “reasonable” to expect the contractor to make good on their promises, which could include a lowering of the overall construction cost or even for the contractor to pay you damages.
In most cases, the smart approach is through discussions and negotiations. Even then, however, your best bet is to rely on the services of an experienced and knowledgeable construction attorney. If you go it alone, you may say or do something that jeopardizes your desired outcome.
Turn to Trusted Representation
We at TdD Attorneys at Law are well versed in construction disputes and issues, and we're prepared to work with you on a resolution to any potential delays. We can evaluate the situation, negotiate with the contractor to get things back on track, or if necessary, seek legal action. We’re here to protect your rights as the buyer/owner.
Remember that everything begins and pretty much ends with the contract you sign. Don’t sign anything until you run it past us so we can make sure you have the proper protections built in. Get the guidance you need today by contacting our office in St. Louis, Missouri.