Commercial construction projects are often long-term ventures that pull together several different companies, contractors, subcontractors and vendors. These projects are often covered by strict contracts that govern every aspect.
While many commercial projects conclude without any issues, there are times when delays in the project can lead to significant challenges. A delayed buildout, renovation or new build can interfere with other aspects of business, such as lease obligations, supply contracts, tenant openings and projected revenue.
Not all delays are the same
One of the most important factors when a commercial construction project faces delays is determining the cause of the delay. In many cases, the cause is out of anyone’s control, which means that the contract will have to be adjusted to take the delay into account. But neither party would face penalties.
When a preventable or controllable cause is the reason for the delay, the party that didn’t fulfill their end of the contract may face penalties. Some common reasons for these delays include incomplete planning, permitting issues, labor shortages, budget disputes or communication failures.
In the case of a preventable cause, it’s possible that a dispute may occur. The parties may be able to come to a resolution out of court, but it’s possible that legal action will be necessary. At that point, having proper documentation for everything from the project’s terms through the reason for the delay, as well as any attempts to rectify the situation, would become important.
Commercial construction disputes can be complex, particularly if they involve multiple parties. Working with someone familiar with these matters can help to protect the company.