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Things went sour between Ron Keller and his home builder as floor tiles cracked, stairs creaked and other unresolved problems surfaced in Mr. Keller's newly built home in Des Moines, Iowa. "I told [my builder] I would've spent more on legal expenses than the project itself [cost] just to make sure I'd get him to do the job right," says Mr. Keller, a 52 year-old insurance executive. "It was extremely frustrating and it caused my wife and me some marital stress." Most problems were resolved, but not without much confrontation and hand-wringing.
The lessons from that painful experience weren't lost on Mr. Keller when he later built a vacation home in Arizona. Before construction began, he hired a professional he had never employed before for any home-building project: an attorney. The attorney reviewed Mr. Keller's initial purchase offer, put the title in their name, and inserted language allowing Mr. Keller to use outside inspectors to review the work. It cost Mr. Keller less than $1,000 -- a bargain in Mr. Keller's estimation. "That was a good move for us," says Mr. Keller. "He was a wealth of information and help." Plus, Mr. Keller asked his attorney to "rattle the builder's cage" when necessary. The Arizona home project went smoothly in comparison to the construction of his primary residence. With lawsuits accusing builders of shoddy workmanship multiplying, it's no surprise that more homeowners are seeking legal advice to protect against construction snafus and contractor errors. Rob Remington, chair of the American Bar Association's 2,500-member construction-litigation committee, says homeowner requests for legal advice have been on the rise, in part because the recent housing boom brought inexperienced contractors into the market and that has led to an increase in problems with contractors. The past 10 years "have seen a steady increase in homeowners generally wanting to retain or seek legal advice with respect to purchasing a home, home repair or construction of homes," says Mr. Remington. Given the high costs of construction, "people became more and more sensitive that they should be covered [by legal help] before they went down the road with a contractor," he says. Meanwhile, contractors, too, are turning to lawyers for protection from homeowners who are quick to blame them for problems that are actually the property owner's fault. With most projects, attorneys are involved only at the contract level. Typically, attorneys draft a contract detailing construction and payment schedules, quality of work, or how to handle change orders before construction starts. This type of contract is so commonly used that versions are available to download from various online sources. Builders usually have standard contracts at the ready for home buyers who are ready to agree to have a new home constructed. But here is the point where homeowners need to stop and have their own attorney review the document before they sign. "While a form contract from a contractor is better than nothing, the homeowner isn't likely to have any idea of what's really in the builder's contract," says Gregory Kenyon, an attorney in Des Moines, Iowa. "They usually don't know much about construction practices. That puts the homeowner at a significant disadvantage." Homeowners should hire a lawyer who reviews documents and can insert terms that best represent their interests. Not all consumers feel the need to consult an attorney. Retired consultant Rand Hammond says he'd seen enough contracts in his career to know what terms should be included and what items could be deleted from his construction contract. He had faith in the reputation of the builder who constructed his new home in Bend, Ore. "If the builder is good, he's not going to risk putting it to customers," says Mr. Hammond. "He's got to think of the homes he has yet to build and what we might say about him to future customers." Many builders agree that a contract review is important. "A well-written contract to us is a communication tool," says David Jaffe, counsel with the National Association of Home Builders, a trade association in Washington, D.C. "All the provisions are negotiable because it's important to address the difficult issues up front. It is the best way to avoid disputes and problems later." Besides, he says, "the days of doing business with a handshake are over." NAHB encourages its members to use contracts because of the many details inherent in construction projects. "People's memories fade, so you need things on paper," says Mr. Jaffe. In response to heightened interest among builders about contracts, the NAHB offers a one-day contracts and law seminar in many states. Organizers say the sessions are well-attended. At one program hosted by the Building Industry Association of Washington, builders bring their standard contract to class for on-the-spot review by a real-estate attorney. Workshop organizer Jan Rohila says the exercise "walks them through the parts of a contract and the clauses it should contain, not only to protect themselves but make things clearer for their customers." There is no magic to avoiding lawsuits -- builders simply need to do a good job. Mr. Jaffe says NAHB members are encouraged to make customer service a linchpin of their business. "We tell them not to make promises they can't keep," he says. A contract's protection shouldn't expire after a homeowner moves into a new home or a remodeling project is finished because that's when construction problems may become apparent. After Mr. Keller moved to his newly completed home, he discovered the builder and subcontractors had cut corners. Workers glued a tile floor directly to plywood subflooring rather than to a cement board that would have created a stable base. Within days of moving into the home, the tiles began to shift underfoot and crack. If Mr. Keller had hired a lawyer in this instance, his or her role would have shifted from contract expert to fact-gatherer and perhaps trial-court advocate. Mr. Kenyon says in post-possession disputes, homeowners and their lawyers need to compile physical evidence to prepare a factual case for court. He recommends hiring construction experts to inspect disputed work and serve as expert witnesses. Courts often rely on the testimony of such experts, says Mr. Kenyon. Mr. Keller hired a flooring contractor to examine his tile floor and evaluate its construction. The expert's opinion was one factor that prodded the builder to completely reinstall the tile. Several letters from Mr. Keller's attorney outlining the faulty work and threatening legal action if tile problems weren't corrected also helped, says Mr. Keller. Mr. Keller's experience demonstrates why building contracts should address how quality-of-work disputes will be resolved. These contracts should specify that outside experts will inspect construction, says Mr. Kenyon. He also suggests that homeowners videotape portions of construction as a log of the work-in-progress and overall job quality. Of course, inspector reports don't always favor the homeowner. "The key question any court will address is finding the cause of the problem," says Mr. Kenyon. "Most people think immediately that [a problem] is the builder's fault, but that's not always the case." Mr. Kenyon recalls one instance when a water leak caused a ceiling to collapse only months after a family moved into a home. The family took the builder to court, but independent inspections showed that a nail the owners had driven through the wall to hang a picture nicked a pipe inside a wall, causing a slow leak that eventually softened the load-bearing beams. Going to court may not be necessary. Sometimes just having the work redone is less costly. Attorney fees often start at $150 per hour, and fees for experts to diagnose problems often are equally pricey. Plus, a homeowner who loses a case may be responsible for the winning side's legal expenses. Arbitration and mediation are two ways to avoid a drawn-out legal battle. Riders can be added to building contracts specifying that disputes will be resolved by one of these methods. Mr. Kenyon is the first to admit that a contract can seem unnecessary if all goes well with a project. "The attorney role is to act as a devil's advocate" and point out what can go wrong, he says. "If the project goes well, you feel stupid spending the money on an attorney and a contract. But if yours is the home project that goes south, you're awfully glad you've got it."
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