Real estate subcontracting: vigilance required
Subcontracting in construction projects represents an opportunity but can create problems for owners. This practice, widely used in the construction industry, allows prime contractors to hire specialists for specific tasks, ensuring expertise and quality in every aspect of the project. However, it presents a contractual and financial complexity that should not be underestimated.
The judgment delivered by the Court of Cassation on March 7 reminds us of these issues. In this case, a subcontractor electrician, who did not receive the agreed payment after the bankruptcy of the main contractor, was able to recover his dues against the project owner.. This decision highlights the importance for owners to ensure that their rights as well as their responsibilities are clearly defined and respected throughout the construction process.
Responsibilities and Precautions: Keys to a Successful Project
To avoid finding themselves in such a delicate situation, owners should take several precautions. First, subcontractor approval is a critical step that should not be overlooked. This formality, which may seem purely administrative, guarantees that each subcontractor is recognized and approved by the owner, thus providing additional legal protection to the project..
In addition, establishing a payment guarantee in the form of a bank guarantee or delegation of payment is an essential security mechanism. This precaution ensures that subcontractors will be paid, even in the event of default by the main contractor. The Court of Cassation clearly indicated that work ordered by the contractor, whether known to the project owner or not, is due. It is therefore up to the owner to ensure that these financial commitments are honoured, otherwise he has to assume them directly.
The March 7 Court of Cassation ruling highlights the financial risks associated with subcontracting in the real estate construction sector. It reminds owners of the importance of increased vigilance and implementation of adequate guarantees to protect their projects. Understanding and strictly enforcing legal obligations is key to avoiding costly surprises and ensuring the success of a real estate project.
