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Orange County Business & Commercial Law Blog

California clears up confusion about contract dispute mediation

California may be more scenic without a huge construction industry, but the homes and infrastructure for millions of people depend on the workers and equipment that build and maintain them. Construction projects are often complicated and involve different specialties, so owners and developers rely on contracts to get people to work together.

Disputes can happen in construction contracts all the time, so many include clauses for how the signatories will try to resolve them. Although several disputes turn into lawsuits and see the inside of a courtroom, a large majority are sorted out before that would ever be necessary.

Most California cities may soon have low-income housing laws

Construction is big business in California, and one of the world's largest economies relies on building to expand. As residential and commercial projects get even larger in a state affected by climate change and seismic activity, laws often expand to ensure safety for workers and residents alike.

Some social issues are also addressed by construction law, and the consequences for violating them are often severe for contractors and their employees. It is possible in a few weeks that most major cities in the Golden State will require low-income housing in many large residential projects.

5 business partner warning signs

When you start any business, including a construction company or a supporting business, you need to know that you can fully trust your business partner. The relationship that the two of you have is critical to the success of the company.

How do you know if you can trust that person? Here are a number of warning signs to watch out for:

  1. Your gut tells you that something is wrong. Listen to your instincts. Even if you can't quite put your finger on why you feel that way, you do not want to work with someone you cannot connect with.
  2. Communication is difficult. If your partner does not talk to you often or delays communication, it can be a sign of some very serious problems to come.
  3. They often fight with you over all sorts of minor details. You have huge decisions to make when running a business. This doesn't mean you always have to see eye-to-eye, but it's going to get exhausting if every single conversation turns into an argument.
  4. They won't bring up the financial side of the business. Conversations about money can be uncomfortable, but they are critical in any industry.
  5. They always pass the blame. When something goes wrong, your partner never accepts responsibility or apologizes. They just look for someone else to blame -- including you. People need to be able to learn from their mistakes, not pass the fault to others.

Delay clauses in construction contracts

When you are having a house built, there are few things as frustrating as seeing delays throw off the projected timetable. This can box you into a corner.

For instance, you may have already sold the home you live in. You may have given the new owners an occupancy date based on when you thought you could move into the new house. If that job runs far behind schedule, you now have to move twice, pay to rent a new place to live and deal with many other hassles that you did not expect and don't deserve.

Should you buy an existing construction company?

You want to start your own construction company. It is a dream you have had for a number of years now, and you are finally ready to make the transition from working for someone else to being in charge yourself.

While it is natural to assume that means you have to start from scratch, the reality is that you may be better off to buy a company that already exists. This is known as "entrepreneurship through acquisition."

Do earthquake standards need to save buildings?

The prevalence of earthquakes in much of California means that construction has to adhere to earthquake standards. These are designed to make buildings more resilient in the face of a quake than they would need to be elsewhere.

But is the goal to save the buildings themselves, allowing them to come through with minimal damage?

California's environmental laws may be aggravating housing crisis

Housing in California isn't cheap -- and it's often hard to find. The population of the state has exploded over the decades and the housing industry is having a hard time keeping up. This forces a lot of residents to endure long commutes -- and high prices -- just to find adequate housing.

So, why aren't more apartments being built? It seems like there's plenty of consumer demand for just about any housing that's offered.

Tips for starting a construction company

You have been doing construction for the last 15 years. You went to school for it and then spent years working for a local company. Now, you are ready to branch out and start your own construction business. You're tired of being an employee and you want to run things.

To help you get started, here are a few important tips from the U.S. Small Business Administration:

  1. Look into your financing options. Maybe you saved up enough to start the company with the cash you have on hand, but most people look into loans and lines of credit. You do not want to drown in debt, but you often need money to start making money.
  2. Find out what types of permits and licenses you will need. Make sure that your business is legally established.
  3. Remember that it goes beyond a business license. You may need a specific tradesman license, depending on what type of work you intend to do.
  4. Protect your company and yourself. Look into business insurance and find out what type of plan works best for you. Understand that this may change as the company grows.
  5. Learn what regulations govern the construction industry as a whole. For instance, you may want to look into workplace safety standards and energy efficiency standards.
  6. Find out what types of workers you will hire. Are you interested in working with subcontractors, contacting independent contractors, hiring your own employees or working with labor brokers?

For a business idea to be legal, you must follow the proper steps

Before you launch a new business, it is critical to make sure that your business idea itself is actually legal. If you're worried about it, there is reason to be cautious. Do not get ahead of yourself and start spending money, only to find out the idea is illegal when you are about to open your doors. The government could shut you down and it may cost you an incredible amount -- even if you do not face legal charges.

It is also important to note that your idea itself may be completely legal, but you still have to follow the proper steps to make sure you carry out that idea legally.

Large construction projects take too long, cost too much

When you hire a construction company, they give you a quote and you sign the contract based on their projections. They will tell you what they think the project will cost and how long they expect it to take. You review the details before you sign.

Many people assume that they're paying for exactly what is outlined in that quote. They sign because they like the final price -- or at least accept it -- and the time frame. Unfortunately, the reality is that most large projects take longer and cost more than those initial quotes.

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