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Consumer Protection & More Successful Construction Projects (We're In It Together)

By: Wayne Baruch
Tel: (908) 359-3748
Email Mr. Baruch

What's the issue

Owners, consumers, professionals, tradespeople, vendors, and regulators are all involved in the purchase goods and services. However, how many are actually, accurately aware of their duties and rights for those transactions according to the law? Some parties are ethical and/or competent to make a wise purchase. Some believe that only a win-lose outcome is appropriate, possible, or "fair. "After all, we are "only human", products of nature and nurture, and usually "only" a merchant or a business owner, i.e., a lay person.

Owners are most often "taught" to rely on:

  1. their Better Business Bureau, various commercial referral services,
  2. the entertainment/education/vicarious experience that they gather from "do-it-yourself" television,
  3. design software, and
  4. others who are not "technical" in their particular field, but feign expertise nevertheless.

Merchants across industries may be new to the business or perhaps using the business as a stopgap measure, and as a result, do not have the same commitment as a long-term member of that business community.

To help combat illegal, unprofessional behavior between businesses and consumers, most states have enacted laws, primarily focusing on "consumer" fraud. While some have "delayed payment" provisions, consumer protection acts typically fail to recognize that merchants are also consumers, who may be victims of unscrupulous consumers.

Fraud is generally defined in the law as an intentional misrepresentation of material existing fact made by one person to another with knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damage. Fraud may also be made by an omission or purposeful failure to state material facts, which nondisclosure makes other statements misleading. (See Appendix I)

The strategy in construction projects (and any other business relationship) to avoid conflict, acrimony, and especially a crime like fraud is to foster good understandings , expectations, communications, and mutuality.

Why the subtitle, "We're In It Together"

"Agreement" is an essential part of defining the word "contract." Why would either party knowingly agree to being coerced, deceived, or participate in a win-lose relationship? None of the stakeholders would logically accept shoddy goods and services, or offer-acceptance-consideration that does not meet their needs. Therefore mutuality must be integral to the relationship, and fraud has no place in it. Loss of mutual trust or second-guessing each other is a sign of a troubled project and a good time to talk and either restore trust or part company. The golden rule is alive and well.

Overview of a construction project

The Medical field includes the concept, "Informed consent", which basically requires a health care professional to provide his or her patient (or guardian) with the options for proposed medical treatment and the pros and cons of each. It then requires the patient and/or guardian to be able to understand and reasonably agree to the recommended care.

Consumer fraud in construction has a similar presumption, but with a few twists, for example:

  • Either party can withhold information about its capabilities and resources, existing conditions, and ability or willingness to pay.
  • In a hypercompetitive economy, some tradespeople contract to perform work beyond their licensure and/or training.
  • "Do-it-yourself" television, various software packages, and other resources purport to provide John or Jane Doe with sufficient resources for a proposed project, but fail to mention the critical importance of safety and insurance issues, tricks of the trade, specialized knowledge, techniques, building code, ordinances, or procedures. Those "technical" details put the "author" at risk of errors and omissions, and do not make for good entertainment.

These and numerous other scenarios offer opportunities for either party to coerce, deceive, or otherwise cheat another party.

Candid, honest communication between the parties must include existing conditions, project scope, goals, price, budget, logistics, time frames, aesthetics, durability, code compliance, safety, and the parties' credentials, among other details. All parties need to share objective, accurate answers to questions like:

  1. Do any sections of the Building Code, regulatory agencies' policies, and/or good practice affect your plans:
    1. Yes, regulators may be an unwelcome necessity, but avoidance and evasion is always unwise. What are the potential consequences of ignoring laws? Warning: They are not always right.
    2. What type(s) of project is planned: new construction or addition, renovation, restoration, remodel, maintain and repair, demolition
    3. Environmental
    4. Soil Type/Geology
    5. Drainage & Topography
    6. Architectural standards
    7. Zoning
    8. Building and MEP (Electrical, Mechanical, Plumbing)
    9. What are the consequences of discovering mold, lead, asbestos, or other toxins in the course of performing the work?
    10. What types of work require what permits in the project's jurisdiction?
    11. Does the project require any building, zoning, and/or other variances?
    12. Depending on the scope and complexity of the project, what credentials are required for those performing each type of work and why? Do these types of work offer any options, and if so, what are the pros and cons of each?
      1. Skilled friend or family member,
      2. Licensed architect
      3. A registered/licensed contractor, electrician, plumber, engineer, alarm contractor, and/or other artisans?
      4. A project manager or owner's representative?
  2. Are all parties' understandings and expectations accurate and reasonable?
    1. Budget
    2. Scope
    3. Aesthetics
    4. Durability
    5. Timeliness
    6. Functionality
    7. Cost
    8. Comfort
    9. Stress free/cordiality
    10. Contract, scope, & regulatory compliance
    11. Quality vs. Grade. Quality is an item or service's suitability for use; grade is its cache, reputation, or rank among related products.
    12. Quality can be fuzzy and subjective, but products and services are usually required to comply with and be judged against building code, manufacturers' specifications, and other independent criteria.
    13. Quality Assurance vs. Quality Control.
      1. Quality Assurance involves monitoring the way the project is executed, not about the product that results at the end of the project.
      2. Quality Control monitors the results or outcomes of the project to see if they meet the specified quality standards. Does the toaster toast bread without electrocuting the user?

. . .Continue to read rest of article (PDF).

Wayne Baruch, is a skilled and accomplished Designer, Craftsman, and Project Manager with a long track record of successful on-time, on-budget completion that achieves win-win client and vendor relationships. His company, Artisans Group, LLC, is a full-service Remodeler that specializes in Older Buildings (from the late 1700's), Repairing Structural, Bug and Water Damage.

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