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Tips to Avoid Disputes on Multiple-Owner Projects

When working on a project where they may be multiple owners, you may find handling disputes more tedious. For example, imagine you are working on building a condominium building where multiple units have been sold. Each of the specific owners may be working with you to provide specific design or building elements in their units. At the same time, you are also beholden to the contract with the original property owner, who may be overseeing the project as a whole. In this instance, you may face disputes from both the landowner who owns the larger building itself as well as the individual condominium owner. 

If you find yourself in this situation, a Miami construction dispute attorney with Cotney Construction Law can help you understand your obligation to each owner as well as the best method to handle each dispute individually and as a whole. There are also a few tips outlined below to help you understand the best ways to avoid disputes in multiple-owner projects.

Related: 5 Ways to Avoid Construction Disputes

Tip 1: Clearly Differentiate Obligations to Each Owner in Your Contract

The first and most important thing to do in any multiple-owner project is clearly identify each party in your contract and make sure that each party is fully aware of your legal obligations to them. For example, if you are responsible for building the overall project, but a subcontractor is responsible for individual aspects, make sure that you clarify who is responsible for what. This can help you avoid costly disputes later on. 

Your obligations may be different to each owner, and defects or disputes may not necessarily fall on you. Miami construction dispute attorneys with Cotney Construction Law can help you understand your obligations to each owner and how to include this in your bid process and final contract.

Related: Essential Contract Clauses to Prevent and Resolve Construction Disputes

Tip 2: Include a Dispute Resolution Clause in All Contracts

Drafting a dispute resolution into a contract identifies potential problems and provides a process for resolving them in the most cost-efficient, time conscious, and amicable manner possible. This is why drafting an ironclad contract is vital. With a contract, you can address issues before they happen and, instead of panicking at the slightest mishap, you will have it covered in the contract. This way, you can approach project problems with a level head. With this clause, you will know where and how any disputes will be handled in advance. Depending on the method of dispute resolution you choose, adding the clause will help parties:

  • Resolve disputes quickly
  • Save money
  • Give parties more decision-making power
  • Solve disputes in an informal environment

Dispute resolution clauses can include an arbitration clause, mediation clause, or even a clause stating that you prefer to handle things through traditional litigation. Miami construction litigation attorneys will discuss the best option for your unique situation, especially in multiple owner situations.

Related: The Value of Tiered Dispute Resolutions Clauses

Tip 3: Keep Open Communication

Especially in the case of multiple-owner projects, it’s important to keep everyone in the loop about possible delays, changes in materials, and other factors. This does not necessarily mean emailing or calling every day with play-by-plays to every owner. After all, that could become time-consuming. Rather, a good practice is to appoint one person within your company as a point person for communication about each project and to discuss with the primary owner of the property if they can also serve as the point person for all of the owners. This will help cut down on wasted time while also increasing visibility and opening lines of communications. 

Tip 4: Understand Mechanic’s Lien Laws

We know mechanic’s liens are commonly called construction liens, and they are a security interest that the contractor gains in a property. Filing a mechanic’s lien against a property will prevent an owner from selling or refinancing the property until the mechanic’s lien is removed. The mechanic’s lien will be held until the contractor is able to receive full compensation for their work or services. If the contractor does not receive the correct compensation, the lien holder has the ability to keep the property listed in the lien.

In a traditional one-owner setting, if you need to file a mechanic’s lien, it’s fairly straightforward who the lien would apply to. But, in the case of a multiple owner property, those clear lines may become a little bit blurred. 

Typically, the lien can be filed against the owner who failed to pay the contractor. If this is a multiple-owner situation, that may mean filing against each owner. A Miami construction dispute attorney will check your contract and let you know who the lien will apply to and will walk you through the process.

You must serve a Claim of Lien on the owner by certified mail, in person, or posting a certified copy on the owner’s premises before or within 15 days of recording the mechanic’s lien. Liens must be recorded with your local clerk of the court or the county recorder’s office, depending on your county, within 90 days of when you last provided a service, labor, or materials on a construction project. Liens expire one year from the date you record the lien. If the owner serves a Notice of Contest, this period is reduced to 60 days after filing the lien. If the owner files a lawsuit in response to the mechanic’s lien, the lien expires 20 days after recording the lien.

Related: When Should You Seriously Consider Filing a Mechanic’s Lien?

Tip 5: Hire an Experienced Attorney

The most important tip on this list is to hire an experienced attorney to help navigate the pitfalls of multiple-owner projects. If you are in need of experienced and dedicated Miami construction litigation lawyers, contact Cotney Construction Law. 

Not only do we advise our clients on legal matters, but we also provide a myriad of other valuable services for construction businesses, including contract review, employment law advice, and litigation and arbitration services. We also advocate for clients involved in licensing complaints, permitting issues, stop-work orders, business immigration, and more. 

If you would like to speak with one of our Miami construction litigation lawyers, please contact us today.

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.