Starting a Construction Project
Sometimes, the dream home you envision might not be readily available on the market, and you have to build it yourself. While the technical execution of the project often takes top priority in planning, the builder should thoroughly investigate the legal requirements and regulatory demands as well as the liability issues associated with the construction before the project begins.
Construction typically requires a building permit, which is granted by the local building supervision authority. For instance, zoning regulations and municipal building codes can dictate the types of buildings that can be constructed on a specific plot.
When purchasing a plot of land, it's not always certain whether construction is allowed or if it can be done according to the buyer's plans. In such cases, it's advisable to make the real estate transaction conditional. Another option is to lease the land. In this case, special attention should be given to the terms and conditions of the lease agreement.
The project can be carried out by on-site construction or as a delivery from a prefabricated house manufacturer. Prefabricated house manufacturers are subject to their own laws, which provide consumers with special protection, particularly in situations where the manufacturer encounters financial difficulties during the delivery process. Whether building on-site or using prefabricated construction, it is important to pay special attention to the financial status of contracting parties and all agreements to minimize the risks of the construction project.
The Land Use and Building Act sets its own conditions and qualification requirements for technical plans and their creators. Similarly, in a project requiring a building permit, there must always be a designated responsible supervisor who oversees the overall construction work and quality, ensuring that the construction work is carried out in accordance with the granted permit, following laws, regulations, and good construction practices.
Although the Land Use and Building Act assigns certain responsibilities and tasks to roles such as the main designer, structural designer, and responsible supervisor, those initiating the project must always remember that this does not necessarily imply absolute liability for damages caused by later-discovered construction defects.
One's own home is often the most expensive purchase in life, which is why it can be wise to seek expert assistance in contractual matters related to construction. Otherwise, unexpected liability situations can arise for the builder, such as someone getting injured on the construction site or the contractor facing payment difficulties. Well-drafted contracts also contribute to the project being completed on schedule and within budget. Often, the anticipation of contract-related issues pays off multiple times over when potential problems and liability matters are identified in advance.
Creating a solid contract is important and serves the interests of both parties to ensure that its content is clear from the outset. The more thoughtfully contracts are drafted, the more likely the content of the contract aligns with the common intention of the parties. To prevent surprises in terms of costs, especially in the case of construction projects, it's crucial to take the time to draft the contract, even when faced with time constraints. Quality contract negotiation plays a significant role in the success of projects. The aim of contract negotiations should be to achieve a balanced agreement as a whole.
It should be remembered that when the parties include a provision in the contract, it can be assumed that they intended to deviate from the legal position based on mandatory legal norms. Therefore, it's advisable to cover all aspects, including the use of the General Conditions for Building Contracts (YSE 1998), in the agreement.
Help with settlement negotiations can be obtained from a lawyer
Usually, well-known companies are chosen for construction contracts, and their working methods are known. Problems arise especially with new partners whose view of the project differs from one's own. Information about the partner's approach in dispute situations may also be lacking. It's in the interest of both parties to clarify the situation and approach in advance. If necessary, the work doesn't need to be done personally; legal assistance can be used in settlement negotiations.
If the contract doesn't specify a binding order of documents, the general terms and conditions (YSE 1998) order is applied (13 §). According to this, YSE 1998 terms are applicable when a solution isn't found in the contract or contract negotiation protocols. Often there are no negotiation protocols. Only the negotiators' own notes from the preparation phase may be available.
As the matter progresses, the only evidence may be the memories of the individuals present during negotiations. In a dispute, these situations might be heard in arbitration or court. In these cases, the matter and circumstances need to be interpreted. There's a significant risk that the matter might be interpreted in favor of the contracting partner. It should be remembered that the party claiming a contractual error is obligated to prove the existence of the error. There needs to be evidence of what was agreed upon. Only then are the YSE 1998 general terms and conditions considered. If a solution isn't found there, the mentioned conditions point to the next source from which a solution can be sought.
Intention of the parties and established practice
If documents don't provide a solution to the problem, the common intention or purpose of the parties should be sought. In this case, the significance can be attached to written materials related to the preparation of the contract, statements made by the parties, and their actions during different phases of the contractual relationship. Weight can also be given to established practices in the field. Notably, unclear contract terms are interpreted against their drafter.
In an unclear situation, interpretation that best aligns with the industry's general practice might be favored. The broader and more uniform the practice, the stronger the case for interpreting accordingly. However, if there's evidence in the interpretation situation that the parties' common intention was explicitly to deviate from the general practice through the contract, the contract's content still matters.