Every project starts with funding — and some projects are funded through construction escrow accounts. These accounts are often opened by the lending institution to help with the distribution of funds during a project. Get the down-low on what contractors and suppliers need to know about these accounts and exactly how they’re used in construction. What is an escrow account? Think of an escrow account as a holding account for project funds. It’s usually set…

The best way to know how much income you’re going to make in the future is to base your projection on the contracted work you have scheduled to start. A construction draw schedule allows you to plan the amount of income you’ll be receiving for a project as the project progresses. Creating a draw schedule helps you plan out your cash flow and be better prepared when problems come up. What is a construction draw…

In most commercial construction projects, there are three ways an owner — via the architect — can alter the work of the contract: the architect’s supplemental instructions, change orders, and construction change directives. Each one is more powerful than the one before — and therefore riskier. Architect’s supplemental instructions: No argument here As the name implies, Architect’s Supplemental Instructions (ASI) simply give instructions, telling you how to do something you were already…

There are a lot of situations in life where the writing’s on the wall. All of the signs are there, or something just doesn’t feel right, but we proceed anyway, only to end up burned in the end. Working with general contractors isn’t any different. But, there are sure signs you can look for to spot a contractor that won’t pay their subcontractors. Many seasoned subs can smell a dishonest or struggling general contractor from…

Everyone on a construction site has heard the joke about there being only two answers on the Plumber’s Licensing Exam: Payday is Friday, and stink flows downhill. While not fair to plumbers, this does make a good point about the dangers of being downhill. Construction contracts are no different — when you sign a subcontract, flow down clauses mean provisions of the general contract that you might not even be aware of flow right down…

Contractors are often required to provide insurance and/or bonds for licensing or for specific projects. Both provide protection for contractors and their customers, but the way they protect and who they protect are different. Let’s look at the key differences between insurance and bonds, so you know which you should use when the time comes. Insurance vs. bonds: What do they do? Both insurance policies and bonds provide protection for contractors in their business dealings. …