How to Prove Expense When Seeking Compensation
After estimating your project cost and signing your contract, expenses can emerge that you did not plan for. Seeking compensation for those expenses can be done if the language is provided in the contract and documents to substantiate your claim. For this reason, our Orlando construction attorneys believe that file management, a new cost category, and financial records are essential in proving expenses if a claim were to surface.
Maintain records during normal business procedures to prove your claim. All files containing correspondences, plans and specs, subcontractor notices, and amendments should be saved. A change in schedule, subcontractor, or supplier can mean a change in job costs. If a claim is filed, any one of the aforementioned files could serve as proof that a costly change was necessary during building.
Create a New Cost Category
You should produce a report of actual cost by putting the estimated cost and actual cost side by side on each line item. Describe any additional work rendered in an additional job cost category. After you have created the new cost category, the on-site supervisors should complete the daily report assigning all additional labor and equipment into that additional job cost category. If an unplanned circumstance creates additional work that was not included in the original contract, record those labor and equipment hours as well.
First, make all project purchases on a credit card so that you can use the statements for your claim. Employees will probably account for one of the most expensive parts of your project so you can also use payroll stubs to qualify that resource.
It is your responsibility to prove that the additional project costs were reasonable and necessary for completion. If a legal provision is not discussed during pre-construction, inability to complete or produce business records will result in legal costs after the fact.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.