Developing new properties and investing in real estate is virtually pointless if you do not thoroughly draft and review your contracts. A poorly made contract can create confusion over expectations and materials and it can even lead to legal damages. Every major project should begin with the stable foundation of a well-established agreement between involved parties.
As you might expect, the cost is among the most important factors to address. Who is getting paid when and how much are they getting paid? What about the cost of materials? Your contract will also benefit from specifics regarding payment type and, of course, penalties for late services or payments.
The time and expectations
You stand to risk delaying future plans if you do not have a somewhat accurate and well-thought-out timeframe for your project. A considerate timeframe gives everyone a sense of what to expect—not only out of the work that lies ahead but also as they prepare for subsequent projects. Additionally, expectations that each party has for the other should be—if not clearly stated—addressed in some way throughout each step.
The use of language
You can have the world’s most thorough contract, but if it is filled with overwritten or ambiguous language, it can be difficult for everyone involved to be on the same page. A clear, to-the-point contract can even save you from future litigation.
Speaking of litigation
Another important element of your construction contract is the acknowledgment of preferred dispute resolutions. Many contracts will address alternative dispute resolutions or arbitration as their preferred methods, should the parties come to a disagreement in the future. But those are not for everyone. Your lawyer may give you a good idea for what dispute resolution will work best for your situation