Building contracts involve the property owner, contractor, and local government. Local regulations must be followed, or a stop work order may be issued, which can result in fines or jail time. Governments issue building permits and can intervene if contracts are not followed. Work stop orders last 90 days and can be revoked if issues are resolved. Property owners can terminate contracts or address government concerns. Work stop orders are costly for property owners and can result in lost revenue and increased costs for contractors.
There are usually at least three parties to any building contract: the property owner, who wants the property to be developed; the contractor, who is hired to supervise and execute the development; and local government, which sets the rules for how development is to be carried out. Any property construction or land development project must comply with local regulations. If local rules are not followed, the government can halt further development by issuing a stoppage order. A stop work order is usually presented as a sign or series of signs posted in the workplace that identify problems and prohibit further work until the problems are resolved. Ignoring a stop works order often means fines, or even jail time, for contractors and homeowners.
Most cities and towns around the world have building codes that set restrictions on the types of buildings that can be built, safety standards for workplaces, and particulars for plumbing and sewage systems, among other things. Before landowners and contractors can begin a building job, they usually need to obtain a government building permit which sets out all the rules and regulations. In common law countries such as the US and UK, local governments usually have the legal authority to intervene in private contracts that are not performed in accordance with the permit issued. Intervention usually comes in the form of a stop work order.
It is usually in a government’s interest to ensure that land is developed. A work stoppage order requires, as the name implies, that work be stopped on site, but the work stoppage is not permanent. Most work stop orders last 90 days. The ordinance will outline exactly what needs to be fixed, which could be anything from safety measures for workers to permits for additional buildings not covered in the original proposal. The order can be revoked if the problems are resolved before the order expires or extended if the property owner requests more time.
Property owners whose projects are subject to stoppage orders have several options. They may terminate the contract entirely if they feel that the remedies stated in the order would be too costly. Alternatively, they can do whatever it takes to address government concerns. Ignoring a stop works order can expose both the property owner and any contractors involved to civil penalties, which typically consist of fines or, in some cases, jail time.
Work stop orders are bound to be costly for property owners. Abandoned projects mean that the owner loses his invested capital. Unless compliance issues are easily fixed, troubleshooting isn’t always cheap either. Landlords usually don’t have to pay contractors while work on the project is halted, but the ongoing delay will usually delay the completion date, which can mean a loss of revenue. The delay can also increase the total owed to contractors, as contractors usually incur extra costs in stopping work abruptly, then starting again weeks or months later.
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