Sometimes, new real estate projects have construction defects that are not even known by the developer. Once the owners come into possession of the apartments, they may discover patent or latent defects and go against the developer during the defects liability period. Such cases happen because the developer didn’t take the necessary supervising actions, says Radu Pavel, the Managing Partner of Pavel, Margărit & Associates Romanian Law Firm.
“There are countless situations when, after the building has been finished by the construction company, the developer discovers that it has construction defects which may be patent or latent. Patent defects can be discovered by reasonable inspection, while latent defects may not be discovered by reasonable inspection by the developer. For instance, the foundation’s defects may not become apparent for several years. The developers may prevent such situations if they take the necessary steps to prevent it. Unfortunately, this sort of cases are very often, and the damages are important”, says Radu Pavel, Romanian lawyer specialized in real estate and construction.
All these problems can be prevented if the developer hires a lawyer to draft a construction contract which will include special clauses in order to prevent these situations says the lawyer, who has more than 14 years of experience in Real estate and construction practice area. Here are the elements that should be taken into account when drawing up this contract.
Supervise all the execution phases of the project
The construction works have different execution phases. First, the construction company builds the foundation, afterwards the structure and the rest of the building. “As the work progresses, a number of works become hidden, so the developer must supervise the execution when the works are visible. In the construction contract it should be mentioned that the developer will verify the completion of these phases. There were many situations when we had construction defects such as infiltrations, or even situations where the walls cracked. When the developer discovers that the works have not been performed properly, these issues should be mentioned in the handover protocol. In this way, the damages will be charged to the construction company. But, the most important aspect is that defects will be remedied before the construction works are completed,” says lawyer Radu Pavel.
In case of each work, the construction company offers a defects liability period. But this will not guarantee the developer that he will be compensated if construction defects may occur. “It is true that there are also defects liability period, which is different for each phase of the construction. But many construction companies have opened the insolvency proceedings and the damages are hardly to be recovered in this situation. This is why it is good to detect the damages as soon as the work is finished and the construction company will bear the costs”, says Radu Pavel.
More and more builders leave site before finishing the job
If the builder leaves site before finishing the job they have failed to complete their obligations and will be in breach of contract. There may be a dispute as to how much is payable for the partially completed work. If you have been making staged payments this will be easier to ascertain. If you paid the builder in advance of work then you will be entitled to a refund. If the builder is insolvent then you may have some difficulty getting the money back. This is where an insurance-backed guarantee will be useful if you obtained one at the outset.
The construction contract must mention the construction company is liable to penalties for both construction defects and construction delays.
“Our clients have faced countless situations when the construction companies leaved site before finishing the job for various reasons – either because they had no financial resources to continue the job, or because they lacked human resources. Therefore, the construction contract must include clauses regarding delay penalties. When a stage of the construction work is finished, the developer will mention the possible delays in the handover protocol. Subsequently, the damages related to these delay days must be deducted from the construction company’s invoice. If there are many days of delay, the construction company may not even receive any payments. It is advisable for the developer to take measures in order to avoid any possible losses”, said the Managing Partner of Pavel, Margarit & Associates Romanian Law Firm.
The lawyer recommends that the developers, both at drafting and signing of the construction contract and at the reception of the works, should use a Romanian lawyer specialized in Real estate and construction law, in order to avoid any construction defects of other liabilities.
“Each time we have consider that it’s better for the liabilities to be rather prevented than repaired, and this approach was to the benefit of our clients,” said Radu Pavel, Romanian lawyer specialized in Real estate and construction law. During 15 years of activity, the Romanian law firm has represented dozens of real estate developers and property owners. Due to the good results obtained in Real estate and constructions practice area, Pavel, Margarit & Associates Romanian Law Firm was ranked in London UK among the top Romanian leading law firms, within Legal 500 rankings, the most important law firms guide in the world.
Pavel, Mărgărit & Associates Romanian Law Firm is one of the top law firms in Romania, which offers legal services at the highest quality, beyond client’s expectations. The Law Firm approaches the cases with maximum professionalism and dedication. It’s ultimate goal is obtaining exceptional results and achieving the client’s objectives, in a time efficient manner. Among Pavel, Mărgărit & Associates clients are top multinationals and local companies. In 2019, the success stories of the Romanian Law Firm have brought recognition of the most prestigious international guides and publications. Thus, Pavel, Mărgărit & Associates Romanian Law Firm ranked second place in Romania in the rankings of business law firms with the most relevant expertise this year, realised by the Legal 500 publication, the most prestigious guide for law firms in the world, based in London, UK. The law firm is also recognized internationally by IFLR 1000 Financial and Corporate Guide 2019. Pavel, Mărgărit & Associates Romanian Law Firm is also the only law firm in Romania recommended by the Global Law Experts Director in London in the Dispute Resolution area of Practice. All the relevant information regarding Pavel, Mărgărit & Associates Romanian Law Firm including areas of practice and the most important deals can be found on the website www.avocatpavel.com, which is one of the most complex law firm websites in Romania.