If you are a property owner or developer in Denver, you may encounter a situation where a dispute between your general contractor (GC) and one or more of its subcontractors (subs) is causing delays in your construction project. This can be frustrating and costly as you may face penalties for missing deadlines, increased financing costs and lost revenue opportunities.
Payment disputes
GC-sub disputes can arise from various issues, but the most common is payment disputes. The GC may fail to pay the sub for the work performed or withhold payment due to dissatisfaction with the quality or timeliness of the work. The sub may then stop working or file a mechanic’s lien on the property until the payment issue is resolved.
Change orders
The GC or the owner may request changes to the scope, design or specifications of the work after the contract is signed. The sub may disagree with the changes or demand additional compensation or time for implementing them. The GC may refuse to approve or pay for the change orders, leading to a conflict with the sub.
Defects
The GC or the owner may discover defects in the work performed by the sub, such as poor quality, non-compliance with codes or standards or deviation from plans. The GC may demand that the sub correct the defects or seek damages for breach of contract. The sub may deny liability or blame the GC or another party for causing or contributing to the defects.
Review your contracts
Before you hire a GC or sign a contract with one, you should review the terms and conditions carefully and make sure they are clear and fair. You should also review the contracts between the GC and its subs and ensure they are consistent with your contract with the GC. You should pay attention to clauses such as payment terms, change orders, delays, defects, dispute resolution methods and indemnification provisions.
Communicate regularly
You should communicate regularly with your GC and its subs and monitor their progress and performance. You should establish clear expectations and goals and provide feedback and guidance when needed. You should also encourage open and honest communication among all parties involved in the project and address any issues or concerns promptly and respectfully.
Mediate or arbitrate
If a GC-sub dispute arises and cannot be resolved through direct negotiation, you may consider using alternative dispute resolution methods, such as mediation or arbitration.