High-End Residential Construction: Permitting Delays, Insurance, General Contractor, Owner's Representative

The high-end residential construction market, properties in excess of a million dollars, has exploded despite current inflation and fears of looming recession. Median home prices in the U.S. now approach $500,000 and the number of $10 million homes doubled in 2021.

Much like other sectors of the economy, high-end owners are likely to face substantial delay issues during construction. Issues ranging from permitting in desirable locations to climate issues to construction management can trigger delays when completing a project. Due to some of these issues the ability to obtain insurance can be cost prohibitive.

As with any project, but particularly with high-end construction, hiring the right general contractor with the appropriate experience is equally essential. Considerations should be given to prior projects the contractor has completed in the locale of the project, the depth and experience of the team members who will be performing the work, and the proposed project management. Owners should also consider whether to retain an owner's representative, who can assist in the review of the schedule as it progresses and offer suggestions for maintaining or expediting schedules.

Use of an owner’s representative may assist if, and when, litigation arises. Emotional owners and builders often let their feelings override resolution of the problems and mediation of the parties is necessary to allow cooler heads to prevail. Regardless of the budget, many residential projects lack the formality of written agreements and insurance may limit recovery in the absence of indemnification agreements and other documentation with subcontractors.

Listen as the expert panel discusses the considerations in high-end residential construction and what counsel for various stakeholders should consider when negotiating terms and monitoring the completion of such a project and what issues may arise in the course of litigation due to defect claim.