Investing in construction projects is not a piece of cake because the project owners have to be capable of providing adequate financing as per the requirements. Not all projects are lucky enough to get timely investments as sometimes the owner delays payments owing to some unavoidable reasons.
It seems a petty thing but asks a contractor who might have gone through the situation, and you will get to know the repercussions. There is no denying that money is essential for keeping the project in running status and to complete it within time.
As already said that some situations could not be avoided, but if you get stuck into a scenario of payment, it is better to deal the matters wisely. It is suggested to get assistance from a professional quantum expert to turn the delay into financial damage and then consider the claim negotiations. Read the post to get some handy tips:
Essential Considerations for Quantifying Payment delay damages
Payments delay is a phenomenon in the construction industry that refers to the issues of late delivery of financial resources by the project owners. In simple words, the project owners delay payments required for purchasing construction materials pay the wages to the labor and other such expenses.
The consequences of such delays are grave because it potentially disturbs regular building process. It not only causes a long time taken to complete the project but also frustrates the contractor that ultimately results in poor quality construction.
Let’s consider the tips to help contractors significantly to be prepared for handling late payment matters in construction:
Consider the Situation Critically
It is imperative to understand that successful completion of construction projects are the result of coordinated efforts by all stakeholders. So, if the contractor finds a slight delay in payment delivery, don’t get panic.
However, if the payments are delayed more than the expected, then the project manager or contractor should ask the project owner and inquire about the reason. Now, it is time to decide whether to wait or take some action.
The decision should be based on concrete reasons, the analysis of payment scenario and future needs of the projects.
Make a Damage claim wisely
In the case that the contractor or builder have decided to take adequate action for the delay in payments, the claim should be made carefully. You cannot just get into a claim request that has no substantial grounds to be proved or compensated. Be careful because it is not always that making a claim is the key to compensation.
Select Claim resolving method smartly
After making a claim, the disputing parties should come to the dialogue table and select a way to resolve the issue peacefully. It is vital because disruption, postponement or abandonment is not in the best interest of any party. So, you may go for negotiation, mediation or alternative dispute handling methodologies to make the things better for successful completion of the project.
Hire financial appraisers Timely
Last but not least, it is essential to transform the payment delay into a monetary figure to understand the actual loss. For this reason, it is better to acquire the services of a top-notch quantum expert for estimating financial damages. You may find various experts near you, but it is crucial to opt for the best services by analyzing the experienced and relevancy of work.
All in all, construction delays are dangerous, especially when the builders are waiting uselessly for the payments. It is because delayed finances are linked with various other factors that lead the projects to postponement or abandonment. It is, therefore, crucial to resolving the issues in time for mitigating the risks associated with lack of finance availability.
Don’t forget to acquire experienced services of financial appraisers to quantifying your damages as the result of late delays!