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Updated over 4 years ago on . Most recent reply

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16
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5
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April C.
5
Votes |
16
Posts

Does a contractor have fiduciary duty to the developer/owner?

April C.
Posted

Situation: a general contractor signs a project management contract with a developer/owner and agrees to only manage the construction process for the owner; the sub trades will sign contracts with and receive payments from the developer/owner directly. In turn, the owner will pay a fixed amount to the general contractor for his/her service that includes finding the subtrades, site management (basically everything that a GC would do except that this GC doesn't pay subtrades directly). 

In this situation, does this general contractor have fiduciary duty to the developer/owner? in other words, is the GC allowed to receive commissions/kickbacks from subtrades? 

Commission/kickback explain: those funds are not from the trades' own pockets (not from their profits) but instead, the trades charge more against the project in order to pay the GC.

Thanks in advance for your opinions!

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