For every successful general contractor, there is a team of highly skilled and qualified subcontractors. Subcontractors are extremely important to the construction process, yet they face challenges daily that threaten their longevity in this industry. In this article, our Memphis contractor lawyers will briefly discuss some of the challenges subcontractors face as well as how to create general contractor and subcontractor relationships that will stand the test of time.
Challenges Subcontractors Face
Cash flow issues are one of the top challenges for many subcontractors. From paying wages to securing lines of credit, subcontractors are typically fronting a range of construction costs. The type of provisions in the subcontract matters. If the contract contains a pay-if-paid provision the risk lies heavily on the subcontractor. If a pay-when-paid provision is in place, timing is the only factor: The subcontractor is paid when the contractor is paid. Among other issues are:
- Worker shortages
- Changing regulations
- Document management
- Technology integration
- Keeping up with industry trends
All of these issues threaten a subcontractor’s ability to increase their bottom line and keep their business afloat. If you are a subcontractor in Tennessee looking for legal assistance, the Cotney Construction Law team is here for you. A reputable Memphis contractor lawyer from our office can assist you with contract negotiation, review, and drafting. We can also provide legal counsel, representation, or defense in areas related to timely payment, liens, dispute resolution, immigration, and contractor licensing.
Building Strong General Contractor-Subcontractor Relationships
Finding reputable subcontractors takes skill. When maintaining good partnerships with subcontractors, general contractors should be proactive about making the relationship a two-way street. Practice the following:
- Clear communication
- Paying them on time
- Hold them accountable
- Ask for their input
Although they are an independent entity, it is important to treat subcontractors as if they are a valued part of your team, just as you would an employee.
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.