Residential Construction Issues in Connecticut

Are you in this midst of a construction project or just thinking about one? Is your contractor licensed? Does the construction contract contain all of the information required by Connecticut state law? With all of the construction going on in Fairfield County, it is important for you to review these issues to make sure that you, the homeowner, are protected in the event your project turns sour.In Connecticut, both new home builders and home improvement contractors must be licensed. There are separate and distinct licenses for each and both are licensed by the Department of Consumer Protection (“DCP”). Holding either license, however, does not mean that the builder/contractor has done anything more than fill out the proper paperwork and pay the required fees. The license is not an endorsement by the DCP that the builder or contractor does good work or maintains appropriate insurance. According to the DCP, the definition of a “Home Improvement” is “any permanent change to residential property, including but not limited to driveways, swimming pools, porches, garages, roofs, siding, insulation, solar energy systems, flooring, patios, landscaping, painting, radon mitigation, residential underground oil tank removals, fences, doors, windows and waterproofing, unless the work contracted for is worth less than $200.00.” A “New Home Construction Contractor” is any person or business who builds speculative housing or contracts with a consumer to construct or sell a new home or builds any portion of a new home prior to occupancy.To check if your new home builder or renovation contractor is licensed, you can go to DCP’s web site at and click on the Home Improvement tab. A major benefit of using a registered new home builder or renovation contractor is that DCP administers the “New Home Construction Guaranty Fund” and the “Home Improvement Guaranty Fund.” These funds are available to reimburse consumers who are unable to collect for loss or damage suffered from a registered contractor’s failure to perform under a contract. The maximum recovery from the Home Improvement Guaranty Fund is $15,000.00 and $30,000.00 from the New Home Construction Guaranty Fund. There are specific requirements for collecting from each of the funds and you should contact DCP or an attorney knowledgeable in construction law to make sure that you fully comply with all of the requirements.Once you determine that your home improvement contractor is licensed, you must make sure that the contract contains all of the required information. Connecticut law requires the following of a home improvement contract: (1) It must be in writing, including all changes and modifications; (2) It must include four dates: the date the contract is signed, the date the work will begin, the date by which the work will be completed, and the date by which the homeowner may cancel the transaction; (3) It must include a Notice of the Customer’s Right to Cancel within three business days after signing the contract. The Notice must be attached to and made part of the contract, and must be in duplicate; (4) The notice contained in the contract must be near the customer’s signature and in substantially the following form: “You the buyer may cancel this transaction at any time prior to midnight on the third business day after the date of this transaction. See the attached notice of cancellation for an explanation of this right.” NOTE: Saturday is a legal business day in Connecticut; (5) Both the contractor and customer must sign and date the contract; (6) Contractor must give customer a completed copy of the contract to keep; (7) The contract must be entered into by a registered contractor or salesperson; and (8) It must contain the name and address of the contractor.If you are building a new home, once you determine that your new home contractor is licensed, you should make sure that the contract contains all of the required information. The new home contract must contain a provision advising you that you may be contacted by the contractor’s other prospective customers concerning the quality and timeliness of the contractor’s new home construction work. You then may advise the contractor in writing upon execution of the contract that you do not wish to be contacted.If your contractor refuses to enter into a contract that complies with the necessary requirements, you should seek another contractor.It is recommended that you do not give your contractor cash advances or large up-front payments. You and your contractor should agree on a payment schedule that roughly follows the progress of the work (i.e. – 20 percent progress payments each time the job reaches pre-determined levels of completion). It is never advisable to provide the final payment until the job is complete.Finally, Connecticut law provides for certain express and implied warranties for new home construction. You should contact DCP or an attorney knowledgeable in construction law if you have a new home warranty issue.

Construction Safety Plans and the Risks Associated With Them

For any person working in the construction industry they are well aware of the many risks which are related to the onsite environment. For the construction company these risks are much more realistic as any threat to your employees could result in a slew of problems which are counterproductive to your business objectives.Many of these risks can be prevented or circumvented with the installation of a clear construction safety plan, although some businesses take the time that is needed when creating these construction safety plans. The reality is that which can do a great deal in making your work environment safe, however a poorly created plan could even go a long way to causing your business harm.The financial aspects which are associated with it is what starts this harm. The creation is time consuming project when you’re forced to review the several rules and regulations that are associated with your project. For several firms the process is tried to be expedited through the filing of a generic construction safety plan, though this is accompanied by many dangers.When you support a construction safety plan that isn’t up to date or in violation of new regulations, you run the risk of getting costly fines and can even cause your construction site to be shut down till the issue is resolved. An even larger financial danger can occur when an associate you employ is injured as a result of your outdated construction safety plan.Several employees are aware of general safety procedures when working on a construction site but it is the duty of the company to generate a construction safety plan to educate them on more particular regulations that need to be followed. When an associate is injured as a result of a safety regulation you did not encourage them to follow, you run the threat of encountering serious financial risk. The financial burden will start with every regulatory agency available fining you for the infraction and then elevate it to the legal battle you would likely encounter by the injured party or the injured parties family. All these financial burdens could have been avoided by not rushing through the process and generating an incomplete or poor construction safety plan.Even the future of your company is a risk with the creation of a bad construction safety plan. Regulation demands and new expenses are all signs of a poorly run company as you are forced to reset schedules and meet the requirements of strict government supervision. For a business who is interested in making use of your company, all of these factors play against the odds of you securing new contracts.

Construction Accounting

Accounting systems form an integral part of any successful business. Proper accounting not only helps the organization know its monitory worth, but also works as leverage to climb the ladders of growth. A construction company is like any other company and has many responsibilities towards their employees, customers, vendors, investors and government. They are bound to answer questions or queries that are raised time to time. Unless, they maintain a sound accounting procedure and proper reporting systems they can not fulfill these requirements.The construction industry has some specific accounting requirements. Apart from routine receivable and payable accounts, they need systems for project estimating, job costing, overhead expenses, project schedules and contracts, project billing, vendor tracking and invoicing, customer management, etc. A typical construction accounting system includes accounts payable, job cost management, accounts receivable, payroll, detailed job budgets, time and material billing, general ledger, AIA billing, subcontract status, custom job reports, certified payroll, over and under billings, purchase orders, union reports, inventory, equipment tracking, work in progress, etc.In this computer age, there are many software packages available. Software specifically developed for the construction industry incorporates their specific requirements and are user-friendly and can be operated by the personnel with little computer knowledge. Apart from fulfilling statutory requirements such as balance sheets, profit and loss accounts for company and outside agencies like sales tax and customs departments, these packages generate innumerable reports which would be very helpful in company’s decision making process.Most of this accounting software covers four major areas of construction industries.
Accounting module covers, A/P, A/R, check writing, financial reports, inventory, job costs, payroll, project billing, cost estimating module covers assemblies, as well as unit costs, project management module includes change orders, contract writing, material takeoffs, punch lists, schedules. Business management module deals with appointments, customer relations, leads, property management, sales, etc.