Construction law issues

Construction law issues

Multiple parties are often involved in the construction process. Examples include the contractor, the designer, and the client. Separate contracts must be concluded for the various parties. Industry-specific general terms and conditions are often declared applicable (DNR 2011, UAV 2012, UAV-GC 2005). Should a dispute arise during the execution of the work, we can provide an organization with legal advice. We assist clients in the event that legal proceedings need to be initiated. This can take place in the court, but in some cases also before the Council of Arbitration for Construction Disputes or another dispute resolution committee.

Questions regarding construction law issues? Contact us.

Construction law as part of real estate

Construction law issues almost always revolve around a physical structure: a commercial building, an apartment complex, a renovation, or a new construction project. As such, construction law touches directly upon the broader field of real estate. A dispute regarding completion or hidden defects impacts the value, marketability, and use of the property. Therefore, our mixed teams of lawyers and in-house counsel look not only at the construction contract but also at the implications for your real estate position. Whether you are an international corporation having a distribution center built or the baker on the corner having his shop renovated, we translate legal technicalities into a workable solution.

The construction contract and general terms and conditions

The basis of virtually every construction project is the construction contract. This agreement is regulated by law in Title 7.12 of the Dutch Civil Code. According to Article 7:750 of the Civil Code, the contractor undertakes, outside of an employment relationship, to create and deliver a work of a tangible nature for a price to be paid by the client. In practice, industry terms and conditions are also often declared applicable, such as the UAV 2012, the UAV-GC 2005 (for integrated contracts where design and execution lie with one party), and the DNR 2011 (for the relationship with an architect or consultant). These conditions regulate, among other things, liability, payment, payment terms, and dispute resolution. We draft these contracts, review them, and ensure that the allocation of risk suits your position, whether you are a client, contractor, subcontractor, or consultant.

Additional work and the duty to warn

One of the most common construction law issues concerns additional work: extra work not included in the original contract price. Article 7:755 of the Dutch Civil Code stipulates that the contractor is only entitled to a price increase if he has warned the client in a timely manner of the necessity of that price increase, unless the client should have understood that necessity on his own. The core questions in an additional work dispute are typically: did the work reasonably fall under the original contract, was a timely warning given, and is the additional price substantiated? In the case of the applicability of the UAV 2012, Section 35 additionally provides concrete rules for additional and reduced work. We advise both clients confronted with unexpected invoices and contractors seeking compensation for their legitimate additional work.

Delivery, defects and the Quality Assurance Act

Handover is a key legal moment. Pursuant to Article 7:758 of the Dutch Civil Code, the work is deemed to have been tacitly accepted if the client fails to inspect it within a reasonable period; after acceptance, the risk passes to the client. Under the regime in force until 2024, the contractor was released from liability pursuant to Article 7:758 paragraph 3 of the Dutch Civil Code for defects that the client should reasonably have discovered upon handover. With the entry into force of the Quality Assurance in Construction Act (Wkb) on January 1, 2024, this has been tightened: pursuant to the new Article 7:758 paragraph 4 of the Dutch Civil Code, the contractor remains liable even after handover for defects that were not discovered upon handover, unless these are not attributable to him. In addition, pursuant to Article 7:757a of the Dutch Civil Code, the contractor must submit a handover file upon handover. Disputes concerning hidden defects are closely related to our expertise regarding liability for defective construction.

Security of payment and the right of retention

Construction projects often involve large sums of money and long payment terms, making payment disputes a recurring theme. The contractor can attempt to secure their claim using a right of retention. Pursuant to Article 3:290 of the Dutch Civil Code, this is the authority to suspend the delivery of the construction work until the due claim has been settled. Since the Agema/WUH judgment, it has been established that this right of retention can also be exercised on immovable property, which constitutes a powerful leverage tool in the construction industry. At the same time, the client often has their own right of suspension in the event of breach of contract. We assess who can invoke which right and ensure that the right of retention is invoked legally and proportionately, so that you do not become unnecessarily liable for damages.

Litigation: Arbitration Board or ordinary court

If a construction dispute cannot be resolved through negotiation or mediation, legal proceedings will follow. Whether you end up before the ordinary courts or the Council of Arbitration for Construction Disputes depends on what the parties have agreed upon; many industry terms and conditions, such as the UAV 2012, mandate arbitration. The arbitrators are technically knowledgeable in construction and often inspect the work on-site, and arbitration proceedings are generally shorter than court proceedings. Together with you, we assess which route best suits the nature of the dispute, the stakes involved, and the desired relationship with the opposing party, and we assist you in both proceedings, from the statement of claim to the final judgment.

Why MKB Juristen for construction law matters

Construction law issues require a combination of legal acumen and an understanding of construction practice. At MKB Juristen, lawyers and in-house counsel work in mixed teams, ensuring you have both litigation skills and practical contract advice under one roof. We serve the full spectrum: from an international corporation with a complex turnkey project to the baker on the corner with a dispute regarding his renovation. By thinking proactively about contracts and risk allocation, we prevent disputes wherever possible, and should a conflict arise, we stand firmly on your side. Questions about a construction law issue? Feel free to contact us.