Corporate lawyer for construction: protect your contracts and your rights

The construction sector generates a very high volume of commercial disputes: breaches of construction contracts, disagreements over the scope of works executed, claims for building defects, delays in handover, non-payment of interim valuations, and disputes between partners in UTEs and development joint ventures. The technical complexity of construction contracts — FIDIC, turnkey contracts, lump-sum versus remeasured contracts — demands a lawyer who understands both commercial law and the construction business.

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Why BM Consulting

Specialised advice and personal service

At BMC we advise contractors, developers, subcontractors, and project owners on all commercial aspects of the construction sector: drafting and negotiating construction contracts, resolving disputes over valuations and variations, debt recovery, defending claims for building defects, and managing conflicts in UTEs and development joint ventures.

  • Construction contracts — lump-sum, unit-rate, or cost-plus — must precisely define scope, variation procedures, and the dispute resolution mechanism before signing; ambiguous drafting is the primary driver of construction litigation in Spain.

  • The Ley de Ordenacion de la Edificacion (LOE) establishes three mandatory warranty periods

    1 year for finishing defects, 3 years for habitability defects, and 10 years for structural defects — each with its own liability chain.

  • Subcontractors can claim directly against the project owner under Art. 1,597 Civil Code up to the amount owed by the owner to the main contractor — but must act before the owner pays the contractor.

  • UTEs (Uniones Temporales de Empresas) have no separate legal personality; each member is jointly and severally liable for UTE obligations, making the UTE agreement's governance and exit provisions critically important.

How we work

From first contact to case completion

  1. Drafting and reviewing construction contracts

    We draft and review principal and subcontract agreements: lump-sum, unit-rate, cost-plus, and management contracts. Special attention to variation clauses, retention bonds, delay penalties, and liability limitations.

  2. Interim valuation dispute management

    When the project owner declines to approve a valuation or withholds the retention without justification, we advise on the options available: formal demand, mediation, arbitration under the contract's dispute resolution clause, or litigation. We prepare the claim with the necessary technical documentation.

  3. Building defect claims after handover

    We advise both developers claiming for building defects and contractors defending against such claims: analysis of the project documentation, statutory warranty periods (Building Act: 1, 3, and 10 years), coordination with technical experts, and representation before the courts.

  4. UTEs and development joint ventures

    We draft Temporary Joint Venture (UTE) agreements and joint venture contracts for development projects, and manage disputes arising during execution: disagreements over project management, failure to make agreed contributions, and winding up the UTE on project completion.

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The problem

The construction sector generates a very high volume of commercial disputes: breaches of construction contracts, disagreements over the scope of works executed, claims for building defects, delays in handover, non-payment of interim valuations, and disputes between partners in UTEs and development joint ventures. The technical complexity of construction contracts — FIDIC, turnkey contracts, lump-sum versus remeasured contracts — demands a lawyer who understands both commercial law and the construction business.

Our solution

At BMC we advise contractors, developers, subcontractors, and project owners on all commercial aspects of the construction sector: drafting and negotiating construction contracts, resolving disputes over valuations and variations, debt recovery, defending claims for building defects, and managing conflicts in UTEs and development joint ventures.

Process

How we do it

1

Drafting and reviewing construction contracts

We draft and review principal and subcontract agreements: lump-sum, unit-rate, cost-plus, and management contracts. Special attention to variation clauses, retention bonds, delay penalties, and liability limitations.

2

Interim valuation dispute management

When the project owner declines to approve a valuation or withholds the retention without justification, we advise on the options available: formal demand, mediation, arbitration under the contract's dispute resolution clause, or litigation. We prepare the claim with the necessary technical documentation.

3

Building defect claims after handover

We advise both developers claiming for building defects and contractors defending against such claims: analysis of the project documentation, statutory warranty periods (Building Act: 1, 3, and 10 years), coordination with technical experts, and representation before the courts.

4

UTEs and development joint ventures

We draft Temporary Joint Venture (UTE) agreements and joint venture contracts for development projects, and manage disputes arising during execution: disagreements over project management, failure to make agreed contributions, and winding up the UTE on project completion.

Commercial disputes in construction: the cost of not preventing them

Construction has the highest volume of commercial litigation in Spain, along with hospitality. Construction contracts — frequently negotiated under time pressure and with deliberate ambiguities — are the source of most disputes: unagreed variations, delays attributed to the other party, building defects discovered after handover, non-payment of interim valuations, and disputes over retention bonds.

At BMC we advise all participants in the sector — principal contractors, subcontractors, developers, private project owners — with the technical legal knowledge needed to maintain solid positions in negotiations and, if necessary, in court or arbitration.

Construction contracts: the most effective prevention

A well-drafted construction contract is the best investment for avoiding future disputes. The clauses that most frequently generate disputes are: the definition of the scope of works (what is and is not included in the price), the variation management procedure (who approves them, how they are valued, how authorisation is documented), the dispute resolution mechanism (court or arbitration, which forum), the conditions for releasing the retention bond, and delay liability and penalty clauses.

We review and negotiate construction contracts before signing, identifying risks and proposing protective clauses that the counterparty often accepts in negotiation.

Unpaid interim valuations: act quickly and correctly

Non-payment of interim valuations is one of the most frequent and urgent disputes in the sector. The contractor that has carried out the works and is not paid has an immediate cash flow problem and, if non-payment continues, a risk of insolvency. The subcontractor that is not paid by the principal contractor also faces the risk of the contractor entering insolvency proceedings before payment can be obtained.

The subcontractor’s direct action against the project owner (Article 1,597 CC), the court order procedure for uncontested monetary claims, and interim freezing orders are the instruments that must be activated quickly. We advise on strategy from the outset.

Building defects: limitation periods, liability, and expert witnesses

Building defect disputes require combining legal and technical expertise. The Building Act (LOE) warranty periods (1, 3, and 10 years depending on the type of defect) are limitation periods — meaning that failing to act within the period means the right is permanently lost. Determining the cause of the defect — which determines who bears liability — requires a solid technical expert report. The chain of liability — developer, contractor, architect, quantity surveyor, specialist subcontractor — must be analysed case by case.

We accompany our clients from the outset: identifying the defect, obtaining interim measures where the damage is ongoing, coordinating with technical experts, and representing in proceedings.

Contact our team of specialist construction sector lawyers for an initial assessment of your matter.

FAQ

Frequently asked questions

The Building Act (LOE) establishes three warranty periods: (1) 1 year from acceptance of the works for defects in finishing or completion; (2) 3 years for defects affecting habitability of the building (waterproofing, thermal insulation, accessibility conditions); (3) 10 years for defects affecting the structure or foundations (ruinogenic defects). Liability may rest with the developer, contractor, architects, quantity surveyors, or specialist subcontractors depending on the origin of the defect. Correctly identifying who bears responsibility and documenting it is the key to success in these disputes.
Non-payment of an interim valuation gives rise to several possible actions: a formal demand for payment as a prior step, a court order claim (procedimiento monitorio) if there is an acknowledged invoice or the amount is below certain thresholds, or full proceedings if there is a dispute over the amount or whether the works were correctly executed. Where the contract contains an arbitration clause, arbitration is the route for resolving the dispute. Documentation of the valuations, the approval record, and emails of tacit approval is critical to the success of the claim.
A UTE (Unión Temporal de Empresas) is a temporary grouping of companies to execute a construction project jointly. It has no separate legal personality — each member company is jointly and severally liable for the UTE's obligations — meaning that if one member defaults, the others are jointly liable to the project owner. The UTE's governance (who manages it, how decisions are made, how profit or loss is shared) must be very clearly regulated in the UTE agreement. Disputes between UTE members during project execution are common and can be very costly.
Yes. Article 1,597 of the Civil Code provides that those who put their work and materials into a project contracted at a lump sum by the main contractor may claim against the project owner up to the amount the owner owes the contractor at the time of the claim. This direct action is a powerful instrument for subcontractors, but it requires that the main contractor actually has a right to be paid by the project owner and that the claim is correctly served. Action must be taken swiftly before the project owner pays the main contractor.
FIDIC (Federation Internationale des Ingenieurs-Conseils) contracts are international standard form agreements used for large infrastructure and engineering projects. In Spain, FIDIC Red Book (Construction Contract), Yellow Book (Plant and Design-Build), and Silver Book (EPC/Turnkey) are used in public works, PPP projects, and international construction contracts. They are governed by the substantive law chosen by the parties (often Spanish law), but use an international contractual language — Engineer, Employer, Contractor — that differs from domestic Spanish construction contract terminology. When FIDIC is combined with Spanish administrative contracting rules for public works, specific adaptations are required.
Construction bonds (garantias) are security instruments used to protect the project owner against contractor default or defective works. The most common are: (1) advance payment bond — guarantees repayment of any advance payment if the contractor fails to execute the works; (2) performance bond — guarantees the contractor completes the works to specification; (3) retention bond — allows the retention to be released before practical completion in exchange for a bank guarantee. In public works contracts, Article 107 of the Public Procurement Act requires a performance bond of 5% of the contract value. In private contracts, the requirement and amount are negotiated.

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Frequently asked questions

Questions about Corporate Lawyer for the Construction Sector

The Building Act (LOE) establishes three warranty periods: (1) 1 year from acceptance of the works for defects in finishing or completion; (2) 3 years for defects affecting habitability of the building (waterproofing, thermal insulation, accessibility conditions); (3) 10 years for defects affecting the structure or foundations (ruinogenic defects). Liability may rest with the developer, contractor, architects, quantity surveyors, or specialist subcontractors depending on the origin of the defect. Correctly identifying who bears responsibility and documenting it is the key to success in these disputes.
Non-payment of an interim valuation gives rise to several possible actions: a formal demand for payment as a prior step, a court order claim (procedimiento monitorio) if there is an acknowledged invoice or the amount is below certain thresholds, or full proceedings if there is a dispute over the amount or whether the works were correctly executed. Where the contract contains an arbitration clause, arbitration is the route for resolving the dispute. Documentation of the valuations, the approval record, and emails of tacit approval is critical to the success of the claim.
A UTE (Unión Temporal de Empresas) is a temporary grouping of companies to execute a construction project jointly. It has no separate legal personality — each member company is jointly and severally liable for the UTE's obligations — meaning that if one member defaults, the others are jointly liable to the project owner. The UTE's governance (who manages it, how decisions are made, how profit or loss is shared) must be very clearly regulated in the UTE agreement. Disputes between UTE members during project execution are common and can be very costly.
Yes. Article 1,597 of the Civil Code provides that those who put their work and materials into a project contracted at a lump sum by the main contractor may claim against the project owner up to the amount the owner owes the contractor at the time of the claim. This direct action is a powerful instrument for subcontractors, but it requires that the main contractor actually has a right to be paid by the project owner and that the claim is correctly served. Action must be taken swiftly before the project owner pays the main contractor.
FIDIC (Federation Internationale des Ingenieurs-Conseils) contracts are international standard form agreements used for large infrastructure and engineering projects. In Spain, FIDIC Red Book (Construction Contract), Yellow Book (Plant and Design-Build), and Silver Book (EPC/Turnkey) are used in public works, PPP projects, and international construction contracts. They are governed by the substantive law chosen by the parties (often Spanish law), but use an international contractual language — Engineer, Employer, Contractor — that differs from domestic Spanish construction contract terminology. When FIDIC is combined with Spanish administrative contracting rules for public works, specific adaptations are required.
Construction bonds (garantias) are security instruments used to protect the project owner against contractor default or defective works. The most common are: (1) advance payment bond — guarantees repayment of any advance payment if the contractor fails to execute the works; (2) performance bond — guarantees the contractor completes the works to specification; (3) retention bond — allows the retention to be released before practical completion in exchange for a bank guarantee. In public works contracts, Article 107 of the Public Procurement Act requires a performance bond of 5% of the contract value. In private contracts, the requirement and amount are negotiated.
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