You have now finished the planning stage for building your dental office or renovating your existing structure. You have worked with an architect and the plans are in place. It is now time for you to find and hire a contractor.
This is the most important part of your project. You want someone who understands what your goals are, who can see your vision, and who will work with you to bring your project to life. You also want this to be done within a reasonable amount of time and within your established budget.
Do your due diligence and invest some time in identifying several contractors who have the potential to meet your needs. Then, before you hire anyone or sign any construction contract, there are important questions you need to ask each one of the contractors you decide to interview.
A contractor may have years of experience constructing buildings. But you need one who has experience with either the construction of a dental office or experience in remodeling an existing building into a dental practice and the special types of requirements they require.
A contractor who is experienced in building dental offices will be able to understand your vision for the office and offer industry-specific suggestions to solve problems you may not have thought of and did not even know you had. The contractor will know how a dental office works and the layout of where the different equipment is placed and how each room is expected to function.
Ask for contact information for dentists the contractor has previously worked for. Then, talk to those dentists to see if they recommend this contractor and what their experience was working with them.
Ask the dentists about any problems that may have come up and find out how those problems were resolved. Find out if the project came in on time and on budget.
It is a good idea to visit some of the office sites to get a better picture of the work the contractor provided. It is sometimes difficult to envision your own final product. These visits can demonstrate to you how your vision can come alive.
Whether building a new office or remodeling an existing one, it is important to meet deadlines as it could impact how much free rent you have and how quickly patients can be seen. The contractor should be able to provide you specific dates for the expected completion of each phase of the building project.
If you are renovating, and the renovation takes too long, expenses will increase while your income decreases since you will not be able to see patients in the space. If it is rushed, the quality of the work may suffer.
A penalty clause provides for a dollar amount the contractor will pay for every day the project goes over the completion date. To balance this, a reward may be paid for the project coming in early. There are contingencies to be considered, including unexpected events such as weather or supply of materials, that prevent completion of the project which the contractor has no control. A penalty clause is a double edge sword, so we recommend only using it with a contractor who has a reputation for being late on projects or over-promising and under-delivering.
Although it is generally not reasonable to expect the contractor to only have your one project going on, the contractor should not be overextended. Make sure the contractor has the manpower to ensure that all projects proceed on schedule. You do not want your office completion to be delayed because the contractor is busy working on another building or remodel.
Providing the required permits should be part of the services the contractor provides. Ask the contractor to provide a list of the necessary permits and to identify which authority provides them. Typically, permit fees are outside of the quote a contractor provides, although he or she may be able to give you a general estimate.
You may end up with the most beautiful dental office anyone could ever imagine, but if it is not ADA compliant, you will not be seeing patients there. If your office is not compliant, you could be sued and end up paying a large fine. You will not be able to see patients there until you remodel your office. Remodeling an existing building in order to have your office legally open to patients, who are members of the public, is a costly undertaking. It’s important to have a contractor that not only understands how the ADA rules apply to a dental practice but also how to ensure that you are not in violation.
If the contractor uses subcontractors, you may want to meet with them to be sure they understand the vision of the project. Generally, contractors, particularly ones who are remodeling your space, should be using their own in-house contractors. This makes for a more seamless flow of work and makes it more likely that deadlines will be met.
No matter how carefully you plan, there will be change orders. In fact, the contract should allow you to make a certain number of changes at cost without running up additional fees.
There may be some unexpected events that will result in the need for a change order. For example, the wrong flooring may be delivered. Or, the contractor may discover an agreed-upon item, like the flooring, is out of stock and instead of a three-day delivery, it is back-ordered, and shipping will be delayed for a few weeks.
Make sure you are absolutely clear on how change orders will be handled and you should approve all change orders in writing to make sure there are no surprises when you receive the invoice.
The contractor will require an initial deposit. After that, payment is made at various stages of the process. As one stage is completed, a payment is made. You should be able to negotiate with the contract the landmarks that will be reached before a payment is required.
You should never pay a contractor in full until the project has been completed, and you have done a walk-through of the building. You want to be sure everything was done according to the specification of the plans you provided before you make your final payment. Ideally, the final payment will be made when the certificate of occupancy is attained.
For your own financial protection, you want to be sure you work with a contractor who is licensed, insured, and bonded. This protects you if the contractor fails to complete the project, fails to pay subcontractors or suppliers, or damages property.
Ask to see the contractor’s bond number and certification. You also want to be sure the contractor complies with any state requirement for them to provide workers’ compensation insurance to their employees that will provide benefits to any workers who are injured on the job.
The contract should have a clause that says if the project is delayed for any reason, the sole remedy is an extension of time, and you will not be liable for any additional fee.
The terms of a typical construction contract have a warranty clause that uses language such as:
There should not be any expiration date on the warranty and no disclaimers. All manufacturer and equipment warranties provided to the contractor should be passed on to you, the dentist.
The construction contract may be one of the most important documents you sign as you build your new dental practice office or remodel your existing one. Whatever you sign is legally binding. You may think you have agreed to something orally, but it must be in the written contract to be enforceable. It is in your best interest not to sign a contract with a contractor until you have a professional dental attorney review it.
At Dental & Medical Counsel, we have experience assisting dentists with their legal needs associated with startups and renovations. We understand the unique office needs and the special terms needed in a building contract to be sure you avoid costly overruns and have your project completed on time. We can negotiate terms for the written contract that may otherwise seem to have been carved in stone.
Dental attorney Ali Oromchian offers a complimentary consultation to discuss your building project and your proposed contract. Contact Dental & Medical Counsel for more information.
If you would like to avoid the common pitfalls associated with dental startups, click here to download our whitepaper on The Top 10 Pitfalls to Avoid When Building a Dental Practice.
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