Construction Contracting for the Owner – Parties to a Construction Project
This is part 1 of our series on Construction Contracting for the owner. Once you have decided to begin a construction project, whether this project is a reroof, concrete restoration, painting, repaving or anything else, there are generally 3 main groups involved.
The first of these groups is the owner. The owner is the person or entity on whose behalf the work is being done. The types of owners range from an individual, development entity, hotel, condominium association, homeowner’s association or a governmental agency. Although the owner may be using a bank to finance the construction, the owner is the party generally responsible for ensuring payment to the other 2 groups.
The second group is generally the design professionals. This group consists of the engineer or architect hired by the owner to prepare any drawings or specifications for the work to be done. In larger projects, the owner may contract with an Architect who then hires various subconsultants (geotechnical engineer, structural engineer, waterproofing consultant, etc) who for our discussion form the design group. Design professionals are generally involved at the beginning of a project. They are often engaged to help with the schematic phase and the design phase and may help an owner with budget and cost issues. However, the scope of the design professionals relationship with the owner is that which is spelled out in the contract between the owner and design professionals.
The third group to a construction project is the contractor group. This group consists of the general contractor or construction manager, with whom the owner is in privity, subcontractors, subsubcontractors and suppliers. The owner has a contract with the general contractor who is responsible to the owner and directs the subcontractors. The type of work to be done, the time frame for the work, the cost of the work and every consideration between the owner and the contractor group is that which is spelled out in this contract.
Although these are the general groups to a construction project some variations do exist. For example, in a design-build setting the design group and the contractor group are together on one team. Every project is different and needs to be treated that way. Next week I will be discussing the Owner – Design Professional relationship in part 2 of our series on Construction Contracting for the Owner.
don kleinMay 23, 2011 11:39 pm
Good work. Question…does all contracted labor have to licensed contractors/specialty subcontractors? I contract with a man that is a antique restorer to do work on Historical Restoration houses. He is not a licensed construction contractor but I contract with him for his expertise and labor. Must he have more than a business license for me to do business with him?
SanjayMay 26, 2011 3:25 pm
Don, Thanks for the question. Unfortunately I cannot give you specific legal advice. Generally though, if the State issues a license for the activity then you must have that license to perform that work or even hold yourself out as being able to perofrm that work. That covers all general and specialty contracting licenses.