Cutting corners might seem tempting, but ignoring construction codes can cause general contractors and subcontractors a lot of trouble. It’s in a company’s best interest to avoid violations because financial consequences can extend far beyond the initial fine or penalty.
It’s not just property owners who bear the effects of neglect or oversight in building projects. Disputes and costly corrections that arise from them can pose significant risks to the financial security of your business.
Potential costs of construction code violations
A construction company held liable for construction code violations can face a range of financial, reputational and legal consequences, including:
- Financial burden: Ignoring code violations can result in costly repairs and renovations. In extreme cases, a contractor may even have to cover the cost of project demolition. Additionally, legal action, including construction litigation claims or criminal charges, can result in costly legal fees.
- Reputation damage: Code violations can lead to negative publicity, damaging your reputation and credibility in the industry. Your business opportunities may decline since most clients consider a builder’s reputation before signing a contract.
- Legal liability: Ignoring code violations can lead to legal liability, putting you at risk of lawsuits, potential criminal charges and even criminal prosecution. For example, the New Jersey Administrative Code enforces $1,000 fines per violation for failing to comply with lawful orders, highlighting the importance of compliance. The penalty increases depending on the violation.
- Project delays: Correcting code violations can cause significant delays, leading to additional costs and lost revenue.
- Insurance and bonding issues: Repeated code violations may increase insurance premiums, bonding issues and policy cancellations. Insurance companies can deny coverage or increase premiums for contractors with a history of code violations.
- Permit and license issues: Ignoring code violations can result in revoked permits, licenses and certifications. These can effectively shut down your business.
By prioritizing code compliance, you can avoid these costs and guarantee a project’s success and profits. With the help of a construction law and litigation attorney, you can stay ahead of code violations and protect your interests. Don’t risk your business. Ensuring safety can provide you with security.
