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Construction Law vs. Real Estate Law: Understanding the Differences

When working in the construction industry, there are many laws that you have to have basic knowledge of in order to avoid specific problems. One problem that construction companies face often is the intersection of construction law and real estate law. From a cursory glance, these two law groups may seem interchangeable. However, they are both very distinct and different areas of law that can apply to the construction industry.

Confusing construction law and real estate law can lead to serious issues later in your business’ operations. This is why it is crucial to have an understanding of the laws that impact your company. Otherwise, you may find yourself in a legal dispute that you may not be able to win. For a legal ally who can help you grasp a better understanding of the differences between real estate law and construction law and which laws impact your construction business, consult a Houston construction arbitration attorney with Cotney Construction Law. 

Reated: Advice for Construction Firms Involved in a Dispute

Real Estate Law

Construction companies interact with real estate law before and after a construction project as real estate law deals with the sale of land and the property on it. At the beginning of a construction project, a developer needs to acquire land from the government. It buys the land, which includes any improvements or resources that are on it. Then, the construction company begins to work. In some cases, construction companies act as the developer and purchase the land, making them responsible for operations that fall firmly under real estate law.

At the end of projects, construction companies have to make sure that the work that they did was acceptable. If not, it could affect the sale of the property. There are mechanisms in real estate and construction law that can impact the completion of a project. In this case, it also impacts the potential sale or use of the property due to legal reasons. 

Liens are a good example of how this can happen. A lien can stop the sale of a property once it has been completed. Construction companies may also be involved in the sale of properties if defects or other problems are found. Depending on how they are involved, real estate law may apply to actions that the construction company must take to fix the problems that they caused. Ultimately, it may be the construction company’s responsibility to handle any of the legal processes and problems that arise from its work or any related issues during the process. 

Construction Law

Construction law deals more with the development of land and the development of buildings on that land. It is different from real estate law in that it deals specifically with the construction process rather than what is done with the land and property before and after the construction process. 

Construction law is complicated and multifaceted. It has laws from many different industries, which makes it hard to navigate. Companies often focus only on the laws that apply for what they are trying to do. Many companies also work with Houston construction attorneys to ensure that they stay compliant with the appropriate laws. 

Construction law is different in each state. There are federal laws that address construction, but the majority of laws are made by the states. Because of this, it is advisable to have Houston construction law attorneys or another legal person in the state where you work help you address the construction laws for that state. 

Related: 4 Causes of Construction Disputes

Overlap

In some cases, real estate law and construction law can overlap and make it a bit more confusing for construction companies to know which laws apply. Liens are a good example of this. If a lien is placed on a property, then both construction laws and real estate laws can apply. The property cannot be sold until the lien is handled (real estate law), and the construction company is liable for handling it (construction law). You may then have to hire Houston construction dispute lawyers to resolve your case. 

Defects are a similar problem where construction laws and real estate laws can both apply. This is why many companies have lawyers on staff or on retainer to help them navigate the problems with differing legal areas. It can make a major difference in the impact that different laws have on your projects. 

Working Within the Laws

Construction projects are always subject to a long list of laws and regulations that can impact how they turn out. What may seem like a minor regulation can have a major impact on how construction moves forward. For construction companies, it’s imperative that they have a firm understanding of the law and how to work within the laws. Otherwise, construction projects could be shut down, or the company may face legal action later on. 

One of the best ways that your construction company can protect itself is to partner with a lawyer that knows construction and real estate law. Depending on the work that your company does, it may be involved in both legal areas. Before you dive into a project that requires a specific type of law knowledge, consult a lawyer to build the team that you need to make sure that your project runs smoothly. 

Real estate law and construction law are both important parts of how a construction company operates. By learning about and preparing for situations where either type of law experience is needed, your company is in a better position to avoid unnecessary risks. If you have questions about real estate or construction law, contact a Houston construction arbitration attorney from Cotney Construction Law.

If you would like to speak with a Houston construction arbitration attorney, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.