There are many advantages of binding arbitration. Mediation & non-binding arbitration are not final. Litigation can be very time consuming and extremely costly. What owners really need is for the dispute to be resolved as quickly as possible. Many times the owner has moved out of their property and is not only paying for the construction, but is also paying rent on another property for the duration of the project. If the owner is living through the construction, that can be even more aggravating and disruptive to their lives. The sooner the dispute is resolved, the sooner the project can be finished and the owner can re-occupy their property.

Many construction agreements allow the contractor to stop work when payments are not made on schedule, yet the owner may be holding back payment specifically because the contractor has not performed the work properly as per contract. The owner may have already paid 90% of the project costs, but cannot move in until the building inspector issues a certificate of occupancy, and the contractor refuses to do any more work without payment. A stalemate ensues. The contractor has already been paid 90% It doesn’t generally put him out to let the owner wait and to leave the owner hanging, yet the homeowner is TOTALLY put-out by having already paid out all that money, often paying a mortgage on the property itself they cannot use, also paying high interest on a construction loan on an unfinished project, and then additionally paying on a rental property to live in as well. The contractor has the upper hand, litigation could take months or years. With DMA on-site arbitration, the dispute can be resolved, and the project can be back under construction in a matter of days.

Owners and owner/builders interested in learning how to utilize the benefits of arbitration in their construction projects may contact DMA here to find out when our next training seminar is.

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