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As a property owner, you may be able to sue a contractor for delays in the completion of a Nevada construction project. Not every construction delay is grounds for a lawsuit against a contractor, however. Depending on the cause of the delay, whether a liquidated damages provision exists, and whether the delay is unreasonable, you may have grounds to sue.
What Are Common Causes of Construction Delays?
Delays are common in the construction industry in Nevada, and sometimes they are unavoidable. In other cases, however, contractors, suppliers, and even property owners unreasonably cause construction projects to be held up.
Common culprits of construction delays that may be excusable include:
- Severe weather
- Natural disasters
- Scheduling conflicts
- Budget issues
- Supply shortages
However, sometimes unreasonable construction delays are caused by the intentional or negligent actions of the property owner or contractor. While you cannot generally sue a contractor for delays that you caused, or issues that are out of the contractor’s control, you may have grounds for a lawsuit if the contractor acted intentionally, negligently and/or if an applicable liquidated damages provision exists in the contract.
When Can You Sue a Contractor for Delays?
If a construction delay is caused by the negligence or intentional actions of the contractor, or someone the contractor is responsible for, and the company fails to deliver promptly, you may be able to file a lawsuit and hold the contractor accountable for delays. If the contractor is responsible for causing the delay, a lawsuit can help you recover compensation for some of the financial losses you incurred.
The penalty for contractors not finishing on time is generally handled as a breach of contract claim. But, to get compensation, you must have a valid contract and prove that the defendant committed a breach without any excusable reason. Additionally, there either needs to be a liquidated damages provision or actual damages suffered.
However, if you’re to blame for delays, a contractor may be able to sue you. This is because unnecessary hold-ups on your end can lead to loss of revenue for the contractor.
Types of Construction Delay Claims
Construction delay claims fall under the following categories:
Excusable vs. Inexcusable Delays
An excusable delay is unforeseeable and beyond a contractor’s control. For instance, a hurricane or tornado can strike when builders are halfway through a project, crippling their progress. Likewise, a disaster like a fire or flood can make work unsafe for construction workers.
Excusable delays should be outlined in your construction contract. When an excusable delay is in play, you may need to offer the contractor additional time, compensation, or both.
On the contrary, an inexcusable delay is one that a contractor is entirely responsible for and could have avoided. For instance, a builder that doesn’t show up on the job site consistently, or overbooks their workers, may be liable for damages.
Critical vs. Non-Critical Delays
In the construction industry, a critical delay negatively impacts project completion or a milestone date. Critical delays tack extra time onto the completion of the project as a whole.
Issues that can lead to critical delays include budget inaccuracies or wrong estimates. Improper financial planning can undermine the contractor’s ability to buy materials and pay workers. That can impede the project’s progress or halt operations altogether, causing stagnation.
A non-critical delay is one that impacts certain activities but does not affect the ultimate completion date of the project or important milestones.
You can use the critical path method to determine whether a specific issue is a critical or non-critical delay.
Concurrent delays refer to a scenario where two simultaneous events impede a construction project’s progress. These delays can happen when at least two independent causes of delay occur or delay events during the same period. You and your contractor can also encourage this issue’s manifestation by delaying the project on two parallel critical path chains.
What Damages Can Property Owners Recover for Construction Delays?
If a delay has affected your construction project and the contractor is found to be at fault, you may be able to sue for the following damages, depending on the language in the applicable contract documents.
Construction delays can cause a loss of productivity for business owners. If you are a business owner who manufactures or produces a product on the property in question, and the contractor’s delay interfered with your productivity, the contractor can be held liable for your losses.
As a project drags on and takes longer than expects, you may be subjected to additional costs of transporting personnel, supplies, and equipment from the site. When that happens, you can claim compensation for demobilization.
Equipment Rental Costs
Depending on the construction project, you may need to rent machines and tools like excavators, bucket loaders, hammer drills, and air compressors. The longer you use them, the more you have to pay a rental company. You may be able to recover compensation for your expenses through a construction delay claim.
Storage and Relocation Charges
If you had to pay to store your furnishings or equipment while your home or building was under construction, a delay in the project can result in additional storage charges. Additionally, if you are paying expenses for other housing or business location arrangements during the course of construction, a loss of use or relocation damages claim may exist. These types of damages may be recoverable as part of the breach of contract claim.
Increased Material Costs
Sometimes, contractors delay projects by weeks or months. During this period, the price of materials may rise. The cost difference can affect your budget and completion timeline.
Some construction contracts will have a liquidated damages provision that may identify a per-day amount for every day the project goes beyond the completion date specified in the contract. This is often seen in commercial construction contracts.
Can a Contractor Deny a Delay Claim?
A contractor can question the viability of a delay claim on the following grounds:
- Negligence on your part
A construction company may argue that delay causes or events were foreseeable and preventable from your end, but you failed to take the measures required to curb them. For instance, they may claim that you didn’t make the property available to them during a certain time frame, which ultimately caused the delay.
- Ambiguous contract language
A contract between you and a construction company should discuss every aspect of delays in clear terms. It should have all the necessary details, including aspects of construction contracts that are often overlooked, as well as project schedules and a fixed completion time. It should also include ample time for providing delay notices.
If a contract has unclear terms and provisions, a contractor may be able to use its language to void your claim. On the other hand, Nevada law will generally construe ambiguities in a contract against the drafter. So, if the Contractor drafted the contract, then the ambiguous contract language could work in your favor.
Can a Contractor Sue an Owner for Delays?
In the same way that you may be able to sue a contractor for delays, the contractor may also be able to sue you in some situations. If you are responsible for causing a construction delay, you may be held liable for the contractor’s losses. Since even small delays can have a ripple effect, impacting workers, subcontractors, suppliers, and others, damages can add up quickly.