Real Estate Archives - Construction Dispute Resolution

When to Mediate, Arbitrate, or Litigate: Pros and Cons

Experts In Alternative Dispute Resolution - Construction Dispute Resolution

Disputes frequently arise in construction projects. While many steps can help prevent them, construction work is complex, and issues will inevitably occur. Disputes commonly arise around payment issues, delays, defects, or changes in scope. When these issues surface, choosing the right dispute resolution method is essential. Mediation, arbitration, and litigation each serve different purposes, and understanding their strengths and limitations can help save time, money, and business relationships.

Mediation is an agreed-upon process of dispute resolution in which an appointed third-party mediator assists the parties in negotiating a mutually acceptable outcome. It is generally the least formal of the three methods and is often used early in a dispute.

The role of the mediator can vary depending on the situation. The mediator may help facilitate direct negotiations, assist the parties in identifying core issues, or learn the facts and positions of each side and provide feedback. The mediator reviews the facts and offers an assessment or recommendation focusing on helping the parties reach a compromise by identifying bottom lines and aligning priorities. The mediator’s goal is to help the parties compromise toward a central point between their original positions, determine bottom lines, and encourage both sides to reconsider their priorities.

Understanding Moisture Intrusion In Building Envelopes

The building envelope is the physical shell of a structure. It includes the walls, roof, windows, doors, and foundation—essentially, any component that separates the interior living space from the exterior environment. The condition of the building envelope directly affects interior temperature, air quality, light exposure, and noise levels. Poor envelope performance can lead to issues such as higher energy costs and moisture intrusion.

One of the most serious concerns is moisture intrusion. When water or moisture enters a building through its envelope, it can damage structural materials, reduce property value, and harm occupant health. Moisture intrusion refers to the unintended movement of water or water vapor into a building’s systems or structure. It is the leading cause of building damage and construction-related disputes. In fact, nearly a quarter of all home insurance claims are related to water damage and freezing events (Consumer Affairs – Journal of Consumer Research, 2024).

Moisture intrusion can occur in several forms. The most damaging is bulk water, which includes rainwater, melting snow, or surface runoff that penetrates the structure. Water can also enter through porous materials such as concrete, brick, or wood. For example, an improperly waterproofed concrete foundation can allow moisture to rise into adjacent walls.

Condensation is another common source—forming when warm, moist air contacts a cooler surface. This often occurs when air moves through poorly insulated or sealed areas of the building envelope. Over time, excessive condensation can lead to mold growth and material deterioration.

Several factors can contribute to a compromised building envelope. The design may be inadequate, with weak transitions at roof-to-wall joints or poorly detailed window seals. The site may lack proper drainage or layering, or workmanship may have been rushed, resulting in improper installation. Additionally, materials such as sealants or flashing can fail over time, or may have been improperly installed, allowing water to enter. Although these issues are preventable and correctable, ensuring quality construction and thorough inspection from the start should be a top priority for builders.

To prevent weaknesses in the building envelope, builders must ensure strong coordination among all trades involved in construction. This includes design reviews, pre-installation meetings, and regular site inspections to verify that work is completed properly.

Finally, there are key indicators that may reveal water intrusion within a building. Visual signs include yellow or brown discoloration on walls or ceilings, mold or mildew growth, peeling or blistering finishes, and warping or buckling of materials. You may also notice musty odors or persistent condensation in certain areas—all strong indicators of hidden moisture.

Handling Unforeseen Price Increases

Builders and subcontractors, do your contracts between you and your clients clearly state how unforeseen increases in material prices will be handled? According to an August 22, 2020 article by NAHB …”the recent spike in softwood lumber prices has caused the price of an average new single-family home to increase by $16,148 since April 17, according to NAHB standard estimates of lumber used to build the average home. Similarly, the market value of the average new multifamily home has increased by $6,107 over the same period due to the surge in lumber prices.”

This increase is calculated on the softwood lumber that goes into the average new home, such as any softwood used in structural framing (including beams, joists, headers, rafters and trusses), sheathing, flooring and underlayment, interior wall and ceiling finishing, cabinets, doors, windows, roofing, siding, soffit and fascia, and exterior features such as garages, porches, decks, railing, fences and landscape walls.

Owners Balancing Collaboration and Trust

Even before a project begins, owners can be better prepared to stay on top of the details and decision-making by having a way to organize their ideas and records. The designer, architect and contractor (the project “partners”) will need the owner’s cooperation in making decisions and choices in a timely manner, so being organized is key. With a system in place, owners will be more confident that what they have conveyed to the partners will be properly addressed. It is helpful to create a notebook to include clippings from magazines, newspapers and brochures to share design ideas with the partners. Add sections to the notebook for: 1) signed contract that includes a projected weekly schedule, 2) invoices, 3) change orders, 4) paint color choices, 5) appliance choices, 6) plumbing fixtures, 7) bids, etc.

After work begins, owners should be very mindful about any changes that need to be made in the design, work and finishes. Good records and communication will help avoid misunderstandings. Other guidelines include the following:

When a cost and contract are proposed, review it with legal and building professionals before signing.
Obtain, review, modify and sign all change orders BEFORE the work on those changes begins. Change orders can either cost more or provide a credit. Keep copies of the signed change orders.

Navigating Xactimate in an Insurance Loss

In the event of a loss to property related to fire, natural disaster, broken pipes, accidents or acts of God, owners turn to insurance carriers to recoup the value of the property. Xactimate, used by adjusters and contractors nationwide, is a powerful estimating tool developed to price out every step of the claim process. This bulletin will briefly explain the three primary types of estimates: content manipulation, mitigation of the damage and structural repairs. Each category involves direct valuation of damaged property to be paid out by the insurer, thus it is beneficial to separate these three estimates.

Content Manipulation
Xactimate allows the “contents subcontractor” to price out every aspect of manipulating, moving, cleaning and storing contents. The contents subcontractor hired for this portion is often retained by the general contractor who will complete the structural repairs. However, if contents need to be manipulated as part of the emergency services mitigation, this service could be broken up. In the event that contents end up in separate places, it is important for the insured to document and remain in communication with their contractors to reduce unnecessary storage costs.

Mitigation
Emergency repairs are often considered the mitigation portion of a loss. Owners should vet and research reputable emergency service contractors prior to any loss as this step is crucial to successful safety and structural repairs.

Flat Roof Membranes

In the Pacific NW, there are many different types of roofing materials that can be applied onto a flat roof of a home or commercial building. These include metal, silicone spray foam, EPDM rubber, single ply, built up, and bitumen based. Bitumen is asphalt or coal tar based material. Single ply, built up roofing (BUR) and torch down roofing are the most common types we see installed in the Pacific NW. So what are the general differences between the common roofing types?

Single Ply Membrane Roofing:

There are three kinds of single ply roofing: 1) polyvinyl chloride (PVC), 2) thermoplastic polyolefin (TPO) and 3) ethylene propylene diene monomer (EPDM). Single ply membranes come in thicknesses between 40 mil and 80 mil, depending on manufacturer and type. Single ply can be mechanically or adhesively attached to the underlying substrates. PVC and TPO seams and laps are hot air welded or chemically bonded.

PVC and TPO membranes– are installed in rows of 6’ or wider depending on the manufacturer’s material widths. Materials are durable, provide energy saving benefits on cooling days due to their reflectance abilities and are repairable without open flames. Since the membrane is only a single layer, damage to the roofing or a poor weld may readily allow water under the roofing.

Installation costs vary by site conditions, roofing contractor, manufacturer and material type and thickness. Generally, a square foot allowance cost for labor and material may be $9 to $10 for PVC’s and $7 to $8 for TPO’s.

EPDM is a durable synthetic rubber roofing membrane derived primarily from oil and natural gas. EPDM is available in black and white and can be purchased in widths of 7.5 to 50 feet. EPDM can be installed using roofing adhesive, mechanically fastened or ballasted with gravel or rocks to hold it into place on the rooftop. Seams are sealed with liquid adhesive or formulated tapes.

Fall Protection – Residential Construction

Falls are the most common type of injury accident on construction projects. We typically see temporary guardrails installed at heights or workers wearing fall protection harnesses with lanyards on commercial projects, but how about residential construction? It’s not uncommon to see workers on residential construction and single family home projects working unprotected around fall hazards, so are safety regulations less stringent for residential versus commercial construction? No! Fall protection pertaining to any construction work is mandated by Washington Administrative Code (WAC) 296-155, Part C-1.

Fall protection requirements are not just for hazards above 10 feet high. Floor holes and floor openings regardless of height must be guarded. Fall protection is required at the height of 4 feet or more at open-sided walking/working surfaces as well as ramps. Work activity on high slope roofs (4:12 pitch or greater) where a fall hazard of 4 feet or more exists also requires fall protection. Where employees are exposed to fall hazards of 10 feet or more, fall protection is required, as well as a written fall protection work plan.

The compliant means of fall protection are addressed in WAC 296-155, Part C-1 and include:

Fall arrest systems – Stopped after the fall with a 6 foot maximum free fall distance

Personal fall arrest with full body harness and lanyards
Safety nets
Catch platforms

Cool Roofing

Choosing a roofing type specifically for a flat roof is not an easy task for the uninformed. Over the past several years, there has been a push for lighter colored (cool) roofing. Cool roofing is a hot topic when it comes to designing or replacing your home’s or commercial building’s roofing. It is often considered because:

designers and owners like the many color options beyond dark colored asphalt roofs
many quality cool roofing products are offered
ease of installation
easily repaired
long term material warranties
relief of heat island effect above roofs

So, what is not so cool about cool roofing? Through testing, field observations and published articles, roofing consultants and manufacturers are aware of a higher probability of condensation as a result of greater air temperature differences between joist cavities and the surface of the roofing. Under these conditions there is an increased and prolonged ability for moisture to form under the roofing and in joist cavities.

Homeowners Acting As General Contractor

There are many reasons why a homeowner may choose to act as the general contractor on a repair or remodel project for their home or even new construction of a residence. Often times the thought of saving the contractor’s overhead and markup expense warrants the decision, sometimes it’s the individual challenge to build it yourself. Whatever the reason, homeowners acting as the general contractor need to be aware of the potential liability they are accepting for the proper jobsite safety of all people working on or visiting the project site.

Construction safety in the State of Washington is governed by the Washington Industrial Safety and Health Act (WISHA) addressed in the Revised Code of Washington (RCW), Chapter 49.17 and the Washington Administrative Code (WAC), Chapter 296-155 Safety Standards for Construction Work. The rules and regulations for construction safety are stringent and somewhat complex with the underlying intent to provide a safe work place for all workers (employees). RCW 49.17.060 stipulates that each employer shall furnish to each of his or her employees a place of employment free from recognized hazards that are causing or likely to cause serious injury or death to his employees. The RCW as it relates to homeowners acting as general contractors defines “employer” in part as “any person, firm, corporation, partnership, business trust, legal representative or other business entity which engages in any business, industry, profession, or activity in this state and employs one or more employees or who contracts with one or more persons, the essence of which is personal labor of such person or persons” (underlines added).