Considerations for Successful New Construction

As many of you are now seeing first hand, southwest Florida is experiencing what we in the industry call a “construction boom.”  While we welcome the increase in new construction, it is important to remember that not all construction companies have fully recovered from the housing collapse.  In fact, several local construction companies filed bankruptcy and went completely out of business last year.

Accordingly, it is imperative that the buyer fully research any contractor or builder prior to entering into a contract to build a new home.  Additionally, new construction and draw agreements can be extremely complicated and it is important that the buyer have a thorough understanding of the contract and terms prior to executing.  For example, we have seen people spend hundreds of thousands of dollars above and beyond what they initially anticipated because they failed to understand what the initial contract provided for.

Because of the substantial risks involved with hiring a company to build a home, we strongly encourage any person considering new construction to fully research the contractor and to obtain legal representation to review and negotiate the contracts.  If there are any questions as to the financial viability of the contractor, a title search can reveal all pending liens, foreclosures, lawsuits, judgments and many other public records which tend to indicate financial hardship.  Further, even if the landowner is obtaining financing (in which the lender will require very specific agreements from the builder for the construction process), we still strongly encourage having an attorney review all documents prior to commencement of construction.

Should you have any questions regarding new construction please consult with your local real estate attorney.


Berlin-Patten, PLLC


This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.

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