Key Steps Commercial Developers Can Take to Ensure Their Contractors are Financially Stable
In today’s market there’s no such thing as too much due diligence – especially when it comes to checking the financial stability of your contractors. Whether you’re hiring a general contractor, architect, engineer or some other consultant, their ability to pay their subs directly and on time affects the success of your commercial construction project.
For example, if your general contractor falls behind on paying their sub contractors, or they don’t pay them at all, then those subs have lien rights that you as the developer or your tenant will have to pay the sub contractor or defend your rights as a property owner.
The financial and legal headaches notwithstanding, you’ve also probably missed your opening date because those sub contractors walked off the job when they didn’t get paid. So your general contractor’s financial problems are costing you time and money.
So how do you avoid all of this? Watch this commercial construction video, or read below to learn three important steps you need to take to confirm the financial stability of your contractor.
- Secure their most recent financial statement and key bank information, such as their line of credit, how long they’ve been a customer and their relationship with their bank.
- A Dun & Bradstreet report is MANDATORY.
- Check at least three references. Avoid questions with simple yes-or-no answers.
But that’s not all. If you’re interested in learning more about checking your contractor’s financial stability, including the three most-often overlooked steps during the vetting process, email us at info@Englewoodconstruction.com.
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