Arent Fox continues to see an increased level of activity arising out of construction delays, disputes and financing issues. Our clients frequently request assistance from the construction practice with respect to contractor defaults, contractor claims and mechanics' liens, surety actions, financing disputes and stricter requirements imposed upon project owners and team members by lenders and joint venture partners given the uncertain prevailing economic environment and more demanding loan draw and value requirements.

For any number of reasons — ranging from insufficient cash flow, problems on other projects and labor force issues — a general contractor may be unable or unwilling to complete a project, and leave the owner to deal with subcontractors who have performed work for which they have not been paid. This position is particularly difficult for an owner because it may result in the owner paying twice — first to the contractor, and then again to the subcontractor — for work performed but never paid for by the contractor.

In order to save a troubled construction project, a well defined and specifically tailored completion plan needs to be prepared and implemented. In the first instance, the project agreements must be reviewed for pertinent default, termination, payment, document ownership and dispute resolution requirements. Materials and equipment on the project site must be secured and completed work protected. In connection with decisions regarding termination and payments, the owner will often need to first prepare a recovery, completion and claim documentation plan before work moves forward.

Arent Fox's construction practice works actively with clients to determine the best course of action to complete a troubled project, replace problematic contractors, stabilize financing arrangements, and ensure that project funds continue to flow in order to permit project completion.