Key Legal Considerations for Modular Construction Contracts

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The modular process involves unique commercial and legal challenges not present in traditional contracting.

April 19, 2021
Frederick E. Hedberg - Construction Executive

Modular construction is literally on the rise. It is rapidly displacing traditional stick-built construction for new commercial, industrial and residential buildings. Over the past decade, an increasing number of health care, education facilities and apartment buildings have been built using modular construction. As the need for housing, and especially affordable housing, has grown as a result of the COVID-19 pandemic, modular construction is becoming increasingly popular.

Recently, the Canadian government, through the Canadian Mortgage Housing Corporation, launched a “Rapid Housing Initiative,” a $1 billion program utilizing only modular construction to rapidly construct affordable housing for its citizens. Similarly, the city of Toronto (which last year approved a plan to build 250 modular homes in response to homelessness) plans to build 1,000 modular homes by 2030. The pandemic also has resulted in an urgent demand for modules for medical facilities and schools. Modular construction allows contractors to build “leaner” and “greener” buildings while increasing quality control and improving site safety and potentially saving valuable time and money.

Reprinted courtesy of Frederick E. Hedberg, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

Mr. Hedberg may be contacted at fhedberg@rc.com



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