When is a contractor entitled to payment for incomplete or defective work
In a previous post, I explained that the way Connecticut substitutes bonds for mechanic’s liens needs to be changed. I have now been honored to participate in a group that drafted proposed legislation for this purpose, which has been presented to the Connecticut General Assembly as Raised Bill No, 5428.
On Tuesday, March 10, 2020, there is a public hearing on the Raised Bill. If I were allowed to testify, I would offer the following:
Our mechanic’s lien laws serve the important purpose of allowing those who provide labor, materials, and/or services for the improvement of real property without payment to obtain a security interest in improved property, but it was never the intention of our mechanic’s lien laws to prevent the free transfer of real property. For that reason, Conn. Gen. Stat. § 49-37 allows a person interested in the improved property to substitute a surety bond for the mechanic’s lien. In that situation, the lienor’s alleged debt is still secured, but the property owner may sell or refinance the improved property. The problem is that the process required by Conn. Gen. Stat. § 49-37 is cumbersome and time consuming.
It is no secret that public works construction is a difficult business. On any given project there are innumerable ways that things can go wrong. With any project involving excavation and underground utilities, encountering changed conditions should not be a surprise. Of course, such changed conditions are not the contractor’s responsibility. What is the contractor’s responsibility, however, is providing the public owner with proper notice of its claims in accordance with the subject agreement.
One of the reasons public works construction projects are more onerous than their private counterparts is because public owners rarely negotiate contract terms. Contracts that are slanted significantly in the public owner’s favor are the norm. Thus, as the contractor in a recent state Supreme Court decision learned, it is vitally important to read the contract and abide by its terms.
One of the lessons from Old Colony Cosntr., LLC v. Town of Southington, 316 Conn. 202 (Conn. April 21, 2015) is that general assertions of entitlement to damages and/or additional contract time is not sufficient when the contract requires more detail. During the long duration of the project, the contractor in Old Colony repeatedly indicated that each problem that occurred impacted its schedule and costs.