Alabama Construction Law Attorneys

A construction project represents a significant investment of time, money, and vision. Whether it’s a commercial development, a new residential build, or a major renovation, you begin with the expectation that the work will be completed on schedule, within budget, and to the agreed-upon standards. When a dispute arises, however, that entire vision is placed at risk. A handshake deal that goes sour, a disagreement over a change order, or the discovery of defective work can quickly turn a promising venture into a source of immense financial and personal stress.

What Are the Most Common Types of Construction Disputes?

Disagreements in the construction industry can stem from any phase of a project, from the initial design to the final payment. While every situation is unique, most conflicts fall into several common categories. Recognizing the type of dispute you are facing is the first step toward finding a resolution.

• Payment Disputes: This is one of the most frequent sources of conflict. Issues can include a general contractor failing to pay a subcontractor, an owner withholding payment from a contractor, or disagreements over the amount owed.
• Project Delays: When a project is not completed by the date specified in the contract, it can lead to significant financial losses for all parties. Disputes often arise over who is responsible for the delay and whether the delay was excusable.
• Workmanship and Defect Claims: A property owner may claim that the work performed by a contractor or subcontractor is defective, fails to meet industry standards, or does not comply with the building code. These claims can arise years after the project is completed.
• Breach of Contract: This is a broad category that can encompass nearly any failure to adhere to the terms of the construction agreement. It could involve failing to perform the work as specified, using materials different from those agreed upon, or an owner wrongfully terminating the contract.
• Change Order Disagreements: It is common for the scope of a project to change during construction. A properly executed change order modifies the original contract to reflect these changes. Disputes happen when work is performed without a written change order or when the parties disagree on the cost or time extension associated with the change.
• Mechanic’s Lien Issues: Contractors and suppliers who are not paid for their labor or materials may file a mechanic’s lien, aka “materialman/materialmen lien” against the property, which can halt financing and prevent the sale of the property until the dispute is resolved.

How Do Mechanics’ Liens Work in Alabama?

A mechanic’s lien is a powerful tool for contractors, subcontractors, and material suppliers who have not been paid for their contributions to a construction project. In essence, it is a legal claim or security interest filed against the real property where the work was performed. The purpose of the lien is to secure payment for the services or materials provided.

In Alabama, the law sets out specific requirements for who can file a materialman/materialmen lien and the deadlines they must meet. Generally, general contractors, subcontractors, and material suppliers have the right to file a lien. The process involves filing a “Verified Statement of Lien” in the probate court of the county where the property is located. There are strict time limits for filing this statement, and failing to meet them can result in the loss of lien rights.

After a lien is filed, the claimant must file a lawsuit to enforce the lien within a specific timeframe. If the lawsuit is successful, the court can order the property to be sold to satisfy the debt. Because of the serious consequences of a mechanic’s lien, property owners who are faced with one should seek legal guidance immediately. Likewise, contractors who are owed payment should act quickly to preserve their lien rights.

What Constitutes a Breach of a Construction Contract?

A construction contract is the foundational document that governs the relationship between the owner and the contractor. When one party fails to fulfill its obligations under that agreement, it is considered a breach of contract. These breaches can take many forms and are often at the heart of construction litigation.

It is important to determine whether a breach is “material” or “immaterial.”

• Material Breach: This is a significant failure to perform that defeats the very purpose of the contract. For example, if a contractor abandons the job or performs work that is so defective it is unusable, it would likely be a material breach. A material breach typically excuses the non-breaching party from their own obligations and gives them the right to sue for damages.
• Immaterial Breach: This is a less serious violation that does not defeat the purpose of the contract. An example might be a minor delay on a project where time was not explicitly made “of the essence.” The non-breaching party may be entitled to damages, but is still required to fulfill its own contractual duties.

Common breaches by property owners include

• Failing to make timely payments to the contractor.
• Interfering with the contractor’s ability to perform the work.
• Wrongfully terminating the contractor from the project.

Common breaches by contractors include

• Failing to complete the work as specified in the contract.
• Using materials that are of a lower quality than what was agreed upon.
• Performing defective work that does not meet professional standards.
• Abandoning the project before completion.

How Are Construction Defects and Warranty Claims Handled?

Discovering a defect in a newly constructed or renovated property can be incredibly frustrating for a property owner. These defects can range from minor cosmetic issues to major structural problems that compromise the safety of the building. Claims related to these issues often involve warranties.

There are two primary types of warranties in construction:

• Express Warranties: These are specific promises made by the contractor, either orally or in writing, regarding the quality of the materials or workmanship. For example, a contract might expressly warrant that a certain brand of windows will be used.
• Implied Warranties: These are warranties that are implied by law, even if they are not written into the contract. In Alabama, courts have established an implied warranty of workmanlike performance for new home construction, meaning the builder has a duty to construct the home in a skillful manner.

Alabama is generally a “caveat emptor” or “buyer beware” state, which can sometimes make it difficult for buyers of existing properties to bring claims against sellers for defects. However, there are key exceptions. For example, a seller has a duty to disclose a known defect if it poses a direct threat to health or safety. A seller also cannot actively conceal a defect or misrepresent the condition of the property when asked a direct question.

What Damages Can Be Recovered in Construction Litigation?

When a construction dispute leads to litigation, the party who has been wronged may be entitled to recover monetary damages. The goal of these damages is generally to place the injured party in the financial position they would have been in if the contract had been properly performed.

The types of damages that may be available depend on the specifics of the case, but can include:

• Compensatory Damages: This is the most common type of damage. For a contractor, this might be the unpaid balance of the contract. For an owner, it could be the cost to repair defective work or to hire another contractor to complete the project.
• Consequential Damages: These are damages that flow indirectly from the breach of contract. For an owner of a commercial property, this could include lost profits or lost rental income resulting from a project delay.
• Liquidated Damages: Some contracts include a “liquidated damages” clause, which specifies a pre-determined amount of money that must be paid for each day a project is delayed. To be enforceable, this amount must be a reasonable estimate of the actual damages that would be incurred.
• Attorney’s Fees and Costs: In most American legal disputes, each party pays its own attorney’s fees. However, in construction cases, attorneys’ fees may be recoverable if the contract specifically allows for it or if they are permitted by a specific statute.

Work With a Knowledgeable Alabama Construction Law Attorney

Construction law involves a web of contracts, state statutes, and legal precedents that can be difficult to navigate on your own. Whether you are a property owner dealing with defective work, a contractor trying to get paid, or a subcontractor facing a dispute with a general contractor, a minor disagreement can quickly escalate into a costly legal battle. Having skilled legal counsel in your corner is vital to protecting your rights and your investment.

The attorneys at Stone Crosby, P.C., have a deep familiarity with the challenges that arise in the construction industry. We represent clients in a wide range of disputes, from simple payment issues to complex multi-party litigation involving design defects and project delays. We can review your contract, explain your legal options, and develop a strategy aimed at achieving an effective and efficient resolution.

To speak with one of our attorneys, please call our office today at (251) 336-3698 or contact us online to schedule an initial consultation.