Top 3 Ohio Construction Law Changes

Laws are constantly changing, or being passed, no matter what state you are in. When it comes to construction, a small change of wording can have project-changing results. Because of this, it is vital that construction business owners and contractors keep on top of their state’s legislation. Otherwise, you may be unprepared to deal with any legal problems that may arise. Ohio construction law in particular has been changing rapidly within the last few years.

If you’re discovering you have difficulty with managing all the paperwork and compliance documents associated with Ohio construction law requirements, Flashtract can help. Our software provides better organization, communication and management of construction documents. Talk to one of our team, and find out how we can help solve these issues for you!

To get you started, we will be reviewing the top 3 recent law changes in Ohio made since 2021. There were notable rulings made in regards to who has lien rights, how long a statue of limitations lasts, and what counts as waiving arbitration.

Ohio Construction Laws to Look out for in 2022

1. Counterclaims do not Waive Arbitration in Ohio law

When it comes to construction law, frequently contracts specify that any disputes must come before arbitration rather than settle in a court. However, these clauses are also often overlooked or ignored. In that situation, how does a company protect their desire for arbitration?

One contractor sought to go through the courts in a counter-claim to request the case be dropped. However, in doing so, the party that originally filed in court said that the contractor had waived their ability to go to arbitration. Terrifyingly, initially the courts agreed with that stance. Luckily for the contractor, the court of appeals found otherwise.

As it stands currently, you can file pleadings with the court to continue with arbitration… but in doing so, be sure to confer with a lawyer so you don’t accidentally waive your right! The wrong wording can make it seem like you’d rather go through with litigation.

2. Designers now hold Lien Rights

In the past with, the wording revolving around lien rights in Ohio law did not provide coverage to designers. The issue was that the lien rights only applied to work done on-site to improve the value of the project. However, that loophole was recently closed in SB-49. Now, with the current wording, designers are included in those who retain lien rights to a project. This means that design professionals can now also protect their holdings.

Designers will still need to satisfy all the requirements for a valid lien. This includes things like notarization, details about the project, names of the project owners, and other critical information.

While the new law protects designers' Lien Rights in Ohio, it’s still very important to seek legal counsel. There are several important things to note about the new extension of lien rights, such as what kind of projects a designer has lien rights in, and the requirements to satisfy and uphold the lien.

3. The Statute of Limitations on Contract Breaches is now even shorter

Prior to 2021, Ohio had a fairly long statute of limitations on both oral and written contracts. However, SB-13 changed all that. It shortened the number of years you could act against a breach of contract.

While this is significantly shorter than the previous statute of limitations in ohio construction law, it’s important to note a few key things.

1. Construction contracts should still provide a frame of time for either party to bring claims
   
   
2. The time specified in the contract overrules the timeframe set in SB-13

This means it is tantamount for business in Ohio to carefully review their contracts, regardless of what the law's ruling on the statute of limitations for lien waivers.

The bill also establishes several other important items, such as when the statutes start, as well as how laws from other states interact with SB-13. Like with the other law changes above, it’s important to seek legal counsel when submitting claims of misrepresentation or malpractice. Disputes over quality or amount of work can result in complicated legal proceedings, and it’s best to ensure you have all your legal documentation in order.

How can your business account for Ohio Construction Law Changes?

Changes to laws can have drastic effects on how you do business. You may find yourself needing to exercise lien rights, or you are wondering about Ohio’s Statute of Limitations when it comes to contract breaches. The constant changes of construction laws, as well as how the courts rule on them can catch you unaware.

Rather than realize too late if all your construction documentation is up to date and organized in easy-to-access places, it’s critical to get ahead of the game. At Flashtract, we make billing documentation as easy as possible. We’ve built in calculators, reminders, requests and other simple tools to cut down on miscommunications.

Avoid costly accusations of contract breaches, and stop being caught unaware by lien holds when you store & generate your construction billing documents with Flashtract.

Ready to see how we can streamline your billing process?

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