Rarely is there a construction project in Arizona where a dispute does not arise. Disagreements are one thing, but when those disagreements pose a risk to the project itself, it's another thing entirely. Thousands if not millions of dollars could be at stake. Delays, increased costs, and damage to the reputation of the parties involved are also at stake.
At RBC, our construction lawyer in Phoenix handles all legal matters involving construction. We help our clients understand the different types of construction disputes so that, together, we can first help prevent them from occurring, and if they do occur, we will ensure the dispute is resolved quickly and fairly. Contact us at 4803328417 today to schedule a Consultation.
Types of Construction Disputes in Arizona
Whether it is a multi-million-dollar commercial project, a public project, a home-building project, or a home remodeling project, disputes can happen. When they do, you want to be prepared. Here is an overview of common types of construction disputes you might expect.
Bid Protests
Bid protests refer to challenges to the award of a construction contract, where a party alleges unfair practices or violations of procurement laws. Common reasons for bid protests include:
- Allegations of bid rigging
- Favoritism
- Errors in the bidding process
Construction Defect Disputes
Construction defect disputes arise when there is a dispute over the quality of the construction work performed or the materials used in the project. Examples include:
- Building code violations
- Water intrusion or mold issues
- Structural issues
- Defective or faulty workmanship
- Use of substandard materials
Contractual Disputes
Contractual disputes occur when the parties disagree over the terms and conditions of a construction contract. These disagreements involve anything from the wording of the terms, the implementation of the terms, the interpretation of the implementation of the terms, and more. Examples include:
- Breach of contract
- Non-payment or delayed payment
- Scope changes or project delays
- Disputes over warranty or guarantee provisions
Design and Planning Disputes
Design and planning disputes typically arise when there is a disagreement between the owner, architect, and contractor regarding the design and planning of a construction project. Examples include:
- Disagreements over project specifications, drawings, and blueprints
- Design errors or omissions
- Changes in design or scope of work
- Disputes over project timelines and deadlines
Environmental Disputes
Environmental disputes arise when there is a disagreement over the impact of a construction project on the environment. Examples include:
- Wetlands or habitat destruction
- Water pollution or contamination
- Air pollution or emissions
- Noise pollution
Insurance Claims
Disputes over coverage and compensation for losses, damages, or liabilities are common construction disputes. Insurance claims, all of which are often challenged, include claims based on property damage, injuries, or other incidents covered by insurance policies.
Payment Disputes
Payment disputes are common in construction projects, particularly when there are delays or issues with the work performed. These disputes can arise between contractors, subcontractors, and suppliers. Examples include:
- Non-payment or delayed payment
- Disagreements over the amount owed
- Disputes over change orders or extra work
- Lien claims or bond claims
Professional Negligence
Allegations of errors or omissions in the professional services provided by architects, engineers, or other design professionals can cause serious construction disputes that lead to litigation. Common allegations of professional negligence include design flaws, miscalculations, or failure to meet industry standards.
Regulatory Compliance Disputes
Conflicts can arise out of alleged violations of local, state, or federal regulations. Examples include:
- Failure to obtain necessary permits
- Non-compliance with environmental regulations
- Violations of safety standards
Scheduling Disputes
Scheduling disputes typically arise when there are delays or changes to the construction schedule. These disputes arise for many reasons, and examples include:
- Changes in project scope or design
- Disagreements over the necessity, cost, or impact on the project timeline of proposed changes
- Disputes over the allocation of resources
- Contractor or subcontractor performance issues
- Delays due to weather conditions, unforeseen site conditions, changes in project scope, or issues with permits and approvals
Surety Bond Claims
Disputes often arise when claims are made against performance or payment bonds. Often in these situations, a contractor has failed to fulfill their contractual obligations. Common causes for surety bond claims include:
- Contractor default
- Non-payment of subcontractors
- Failure to complete the project
Termination Disputes
Conflicts arising from the termination of contracts, either for cause or without cause, happen from time to time. Construction disputes related to termination can arise when contracts are breached, a party has failed to perform, or mere disagreements between parties.
Legal Options to Address Construction Disputes in Arizona
Many construction disputes are resolved quickly and without intervention, but other disputes require legal assistance. To resolve the dispute, you may want to try direct negotiations, mediation, arbitration, or litigation.
Direct negotiations are the cheapest option with the most immediate impact. Often, direct negotiations are initially attempted, and if successful, the construction project can move ahead. If it is unsuccessful, at least the parties know what the issues are and they can move forward.
Mediation involves an impartial intermediary. The parties voluntarily agree to meet and work through the disagreement with the assistance of the mediator. This process does not involve testimony or evidence but it may coincide with a lawsuit. Many courts will require mediation after a lawsuit is filed as part of the process. Either way, whether you enter into mediation via a lawsuit, it is important to have an attorney as your advocate and advise you throughout it.
Arbitration is common in construction disputes. Many contracts require arbitration. This process is similar to a trial but is often cheaper and faster, though the latter is not always the case. At least one arbitrator hears and decides the case. Typically, the decision is permanent and unappealable.
Litigation involves filing a complaint in state or federal court, and if not settled prior to trial, the case will go to trial. The decision of the court can be presented for appellate review.
Potential Construction Dispute Remedies
Resolving construction disputes in Arizona ends with at least one remedy. This remedy will hopefully address the full extent of the problem. It may help clarify misunderstandings, or it may place a harmed party in a better position. Monetary compensation and specific performance are used to remedy construction disputes.
Monetary compensation, if awarded, covers the damages suffered by the party. Types of damages vary somewhat depending on whether you are the contractor or the owner. Contractors often suffer damages related to delays, disruption, inefficiencies, losses of productivity, and the costs to hire new workers. Owners suffer damages related to defective construction, incomplete work, delays, and liquidated damages.
Sometimes monetary compensation is not enough. A court may order a party to fulfill obligations, referred to as specific performance. Though this remedy is not used as much, it is common where either the subject of the contract is unique (for example, unique skills are required and cannot be easily replaced or found), or the true value of damages is difficult to calculate.
Keep in mind that construction disputes can be complex and nuanced. Other remedies may be considered depending on your dispute's unique facts and circumstances. That's why it is always best to speak to a construction attorney to ensure you are properly proving your case and obtaining the right remedy.
Contact a Construction Lawyer in Phoenix Today
Construction disputes can be costly, time-consuming, and damaging to the parties involved. Understanding the different types of construction disputes can help prevent them from occurring and ensure that they are resolved quickly and fairly. It is important to have a clear and detailed construction contract and to communicate effectively with all parties involved in the project to avoid disputes.
At RBC, our construction lawyer in Arizona will advocate for your rights and advise you accordingly. Fill out the online form or contact us at 4803328417 to schedule a Consultation.