Construction Law FAQs

Navigating the complexities of construction law can be challenging for both contractors and property owners. The following FAQs provide helpful insights into common legal concerns surrounding construction projects.

Can I recover attorney’s fees if I am successful in defending a lien?

In North Carolina, a judge may award attorney’s fees to the prevailing party in construction lien cases. If the plaintiff wins at least 50% of the amount they sought or the defendant wins a judgment for less than 50% of the claim, attorney’s fees may be awarded. However, this is at the judge’s discretion and typically only occurs if the losing party unreasonably refused to resolve the matter. Offers of judgment under Rule 68 of the North Carolina Rules of Civil Procedure can also impact the percentage threshold.

Can I rely on my lender’s inspection when making payments?

No. Lender inspections are conducted to ensure there is sufficient progress and that the lender’s investment is secure, not to guarantee that all contract terms are being met. You should inspect the work yourself or hire an independent expert to ensure it aligns with the construction contract.

Can I terminate my construction contract if I’m unhappy with my contractor?

You can terminate a construction contract if the contractor materially breaches the contract, and you are not in breach yourself. It is advisable to give the contractor notice of the breach and time to cure it. Termination provisions in the contract may offer specific guidance on this process, but consulting with a lawyer before terminating the contract is strongly recommended to avoid potential legal repercussions.

Does a construction contract have to be in writing?

No, construction contracts can be oral if all legal requirements (parties, work description, price, etc.) are met. However, relying on an oral agreement is risky. A written contract reduces the chances of disputes and provides clear documentation for resolving any issues.

Does a standard form contract protect me adequately?

Not always. Standard contracts, such as those provided by the American Institute of Architects (AIA), can contain references to additional documents not provided upfront. Consulting an attorney to review standard contracts ensures they align with your interests and the specific details of your project.

How can I protect myself from liens?

Always obtain a lien waiver or affidavit from your contractor at the time of any payment. This document should confirm that all subcontractors and suppliers have been paid in full and that the contractor waives any lien rights up to that point. If you receive a notice of a claim of lien from a subcontractor, consult an attorney before making any further payments to your contractor.

Is a North Carolina General Contractor required to be licensed?

Yes, in North Carolina, any person or business undertaking a construction project valued at $30,000 or more must be licensed by the North Carolina Licensing Board for General Contractors. A contractor who is not licensed cannot enforce the provisions of the contract or collect fees.

What costs are included in a cost-plus contract?

A cost-plus contract should clearly specify which costs are included. These typically include labor, materials, and possibly administrative costs, but the specifics are subject to negotiation and should be outlined in the contract.

What is a punch list?

A punch list is a compilation of minor tasks that remain after the substantial completion of a construction project. These items are typically minor and do not affect the structural integrity or the issuance of a certificate of occupancy.

When must construction liens be filed?

In North Carolina, a contractor must file a lien within 120 days of the last provision of labor or materials. To enforce the lien, a lawsuit must be filed within 180 days of the last furnishing of labor or materials. Subcontractors may establish liens by serving a Notice of Claim of Lien Upon Funds and may also file a subrogation lien if the owner pays the contractor without withholding funds for the subcontractor.

If you have further questions or need assistance with a construction project, please contact the construction lawyers at Ferikes Bleynat & Cannon. Our experienced attorneys can provide advice, help resolve disputes, and ensure your project runs smoothly.