
Donald M. Pepe
Partner
732-568-8370 dpepe@sh-law.comPartner
732-568-8370 dpepe@sh-law.comAs property owners, developers, contractors, construction managers, subcontractors, design professionals, engineers, and lenders can attest, the legal issues that can arise in the construction industry are unique and complex. The stakes are also extremely high, which makes it imperative to have a solid understanding of construction law and how it impacts your legal interests.
Construction projects are generally subject to a myriad of federal, state, and local laws. For instance, a project may be subject to federal regulations involving the workplace and environmental safety, state laws governing licensing and building codes, and local ordinances establishing zoning and permitting requirements. Further complicating matters, the legal standards often differ for commercial, industrial, and residential projects.
Construction law is also unique in that it encompasses several distinct areas of law and often overlapping areas of responsibility. Below are some examples:
While it may seem overwhelming, understanding construction law has numerous benefits, including ensuring enforceable contracts, maintaining regulatory compliance, protecting your company’s legal rights, and reducing the risk of legal disputes.
The legal complexities of the construction industry often result in disputes. Lawsuits often arise around issues such as breach of contract through late or non-payment for work and services, late or non-complete work, material selections, and design and workmanship defects.
Because lawsuits can be costly and time-consuming, alternative dispute resolution (ADR) is often preferred over traditional construction litigation. As discussed in greater detail here, mediation relies on a neutral third party to help negotiate the differences in the parties’ positions in order to lead to the settlement of all or some of the issues in dispute. Unlike a judge or jury, the role of the mediator is to help the parties settle rather than make any binding decision regarding the dispute.
Arbitration is similar in that a neutral third party is appointed to resolve the dispute; the key distinction is that an arbitrator renders a decision, which is generally final. The process is much more formal than mediation but still offers many advantages over litigation, including a significantly faster and less costly resolution. In both forms of ADR, the parties can select a mediator or arbitrator who specializes in construction industry claims and, therefore, may be more knowledgeable than a judge or jury. Another key advantage of ADR is the ability to privately resolve disputes out of the public eye.
Litigation is sometimes unavoidable. Some legal remedies, such as mechanic liens, must be pursued in strict accordance with applicable statutory provisions. In some cases, it can also be advantageous to file a lawsuit because any court decision, whether rendered by a judge or jury, is eligible for appellate review. Since every legal dispute involves different legal and factual issues, it is advisable to consult with an experienced construction litigation attorney who can help determine the best dispute resolution mechanism.
Construction projects involve a complex web of regulations and contracts involving numerous entities, many of whom have diverging financial and legal interests. It is imperative to legally protect your business and your projects.
Scarinci Hollenbeck’s construction lawyer team has extensive industry experience, particularly in New Jersey and metropolitan New York City. Our construction law attorneys also have the benefit of relying on their colleagues in related practice areas, such as Commercial Real Estate, Financing, Environmental, and Land Use, which gives our clients a tremendous advantage. By leveraging years of legal experience in every discipline related to construction law, our team can provide strategic legal guidance through every phase of a construction project.
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