Key Provisions in Residential Roofing Contracts
by Trent Cotney, Cotney Attorneys & Consultants
(Editor’s Note: Trent Cotney, CEO of Cotney Attorneys and Consultants, is dedicated to representing the roofing and construction industries. Cotney Construction Law is General Counsel for the Western States Roofing Contractors Association and several other industry associations. For more information, contact the author at (866) 303-5868 or go to www.cotneycl.com.)
Customer service is always the first line of defense when a dispute arises on a project. However, when customer service fails, the contract dictates how a dispute will be resolved. A contract can be a roofing contractor’s best friend because it will contain terms that will assist the roofing professional in collecting money or defending claims. Although this article will not discuss all the provisions needed in a residential roofing contract, it will focus on several important provisions that every residential roofing contract should include.
Scope of Work Provisions
The majority of litigated disputes arise out of or relate to problems with the scope of work. Contractors often seek payment for extras that were not initially contemplated in the contract. However, the homeowner may believe that the contract included all roofing work on the project.
For example, a roofing contractor providing a new roof for a homeowner may encounter rotted decking that needs to be replaced. The contract does not explicitly detail the cost or price for replacing the rotten wood. As a result, the roofing contractor incurs another $2,000 in deck replacement and seeks to charge the homeowner for the additional charge. The homeowner objects to the extra charge stating that the contract did not mention that the decking would be an extra charge.
This example demonstrates the need to define the scope of work for a roofing project. If replacement of decking, fascia, soffits, and other work are extras, the contract needs to not only state that those items will be extra charges but indicate the method of pricing for the additional work.
It is also important to note the nature and limits of any workmanship warranties provided by the roofing contractor to the homeowner. The homeowner may misconstrue the scope of warranty work if it is not specifically spelled out in the contract documents.
All residential roofing contracts should contain a notice provision that requires that the owner notify the contractor of any defects or claims within a certain time period. The notice provision must be clear and unambiguous, and should also provide that failure to provide the contractor with notice results in the owner waiving any damages arising out of that claim. The courts have strictly construed these notice provisions and have required that the contractor provide the owner with a reasonable period of time to notify the contractor. All notice provisions should require that the notice be provided in writing to avoid confusion.
Attorney’s Fees Provision
All residential construction contracts should contain an attorney’s fees provision, which allows the contractor to obtain attorney’s fees in the event it has to seek payment or defend claims against the owner. An attorney’s fees provision not only provides the contractor, especially contractors who perform work in more than one county, with the opportunity to collect its attorney’s fees but also gives the contractor’s attorney an additional settlement tool that may encourage an owner to settle because of the risk of the owner having to pay for the contractor’s attorney’s fees.
Contractors, especially contractors that perform work in more than one county, should include a venue provision in their residential roofing contract. The venue provision governs where a case can be brought based on the contract. For example, assume you are doing work in one county, but your venue provision provides that you can only sue or be sued in the county where your main office is located. If a dispute arises out of the contract and the venue clause is specifically worded, the owner will have to sue you where your office is located, barring a statute to the contrary. Obviously, this is beneficial for the contractor because the contractor has less travel expense and may use local contacts for expert witnesses.
Residential roofing contracts should contain disclaimers to state that the contractor is not liable for certain pre-existing conditions. Disclaimers can cover a wide variety of problems, including mold, termites, dry-rot, and mildew. The purpose of these disclaimers is twofold: first, it allows the contractor to disclaim liability for certain pre-existing conditions, and second, it helps educate the owner about the existence of pre-existing conditions. In conjunction with doing any residential roofing project that has pre-existing conditions, a residential roofing contractor should consider taking photographs or videos of damaged areas to later prove the existence of pre-existing conditions.
Contractors should routinely review their contract to ensure that it contains the most current terms and that the terms are enforceable. This article has touched on a few of the more important provisions to include in residential construction contracts. However, depending upon the nature of your work and the geographic location, there may be additional terms worth considering. Your residential roofing contract should be viewed as a helpful tool providing you with the terms necessary to seek payment and to defend claims against owners if necessary.