A savvy contractor or subcontractor is generally familiar with the steps necessary to properly obtain and record a construction lien.
It has been more than ninety years since United States Supreme Court Justice Brandeis delivered his landmark opinion in United States v. Spearin, 248 U.S. 132 (1918). Yet today the Spearin doctrine remains at the forefront of construction law.
It is not uncommon in the construction industry for parties to exchange and revise drafts of written contracts before agreeing on a final version.
The law allows contractors to place a lien on real property when they’re not paid for their work. So when a roofer, who had contracted with a condominium association to repair roofs on several common-managed buildings, wasn’t paid, he filed a lien against the association rather than the individual unit owners in each of the …
Enter into a formal contract with any public authority for the construction or repair of a public building or structure or for performance of other public work and you will need to have a payment and performance bond in place, so say most state statutes.
In today’s post-boom construction environment, claims by project owners of construction defects, wrongful or otherwise, are all too common. Because the potential for damages and litigation expense associated with such claims can be substantial, a contractor would do well to have a working knowledge of his rights and responsibilities under a commercial general liability (“CGL”) insurance policy, especially the carrier’s “duty to defend”.
A party’s right to recover attorney’s fees incurred over the course of litigation hinges directly on whether one is deemed by the court to be the “prevailing party” at the conclusion of the case.
Contractors continue to see an increase in the number of 558 notices they’re receiving. These are those demands made under Chapter 558 of Florida Statutes setting forth pre-suit procedures on construction defect cases. Even though the law has been in place for some time, there are few decisions available explaining how the statute really works, especially if someone doesn’t strictly comply.
In a recent decision, Avatar Dev. Corp. v. DePani Construction Inc., 883 So.2d 344 (Fla. 4th DCA 2004), a Florida court held that a construction lien foreclosure claim was separate and distinct from the claim for loss of future profits.
A recent case should give pause to those who believe that legal disputes between parties will always be decided by the written terms of their agreement.
How many claims of lien must a lienor record? A contractor, subcontractor, laborer, materialmen, or anyone else who may be a lienor, is required to record only one claim of lien for his entire demand against the real property for labor or services or material furnished.
In 1981, and again in 1992, an engineer and municipality entered into General Consulting Agreements. The 1992 Agreement called for the engineer to, among other things, provide “statements of probable cost” to the municipality for a road improvement project.
During the course of a construction project there is always the possibility that a contractor may “walk off” the job, leaving the owner, subcontractors and material suppliers with a difficult and often expensive dilemma.
This information is being presented from the Contractor’s vantage point. Hopefully, this will also provide valuable information for any design professional seeking to gain greater knowledge and information regarding the risk management concerns that apply to a Design/Build project led by a construction firm.
What happens when a borrower has earmarked portions of a construction loan for specific purposes but those designated funds are then subsequently disbursed by the lender for another purpose?
South Florida is experiencing unprecedented growth in residential, commercial, and public construction.
Finding yourself sued by an unhappy buyer of a property you helped build is no longer an unusual occurrence. In fact, such claims have become commonplace enough that Florida now has a law in place to address such issues.
The filing of a construction or mechanic’s lien is just one in a series of steps a contractor can take to protect its right to receive payment for labor and materials provided.
It often happens. After a contractor submits his proposal, the parties continue to negotiate, refining both the scope of the work and the final price. But while this is taking place, the contractor may begin to lay out the work and deliver some materials. Before you know it, although nothing has been signed, not only …
The preparation of a construction claim of lien appears to be such a routine task that many take for granted the importance of who is actually authorized by statute to do so.
A standard clause in many construction related contracts often requires one of the parties to indemnify and hold the other harmless.
A contractor, hired by a developer to perform certain earthwork, priced the job with the idea the he could remove excess fill from the job site and haul it to another project on which he was also working. An easy way to make some money, or so he thought.
What are a surety’s rights and obligations in disputing a subcontractor’s claim made under a payment bond?
You’ve been awarded a final judgment- what, if any, good does that piece of paper do for you?
Not receiving payment for your work is a principal concern on every job. Especially today, with everyone facing tough economic challenges, it has become a real concern to get paid when you are supposed to.
About a year ago, the United States Environmental Protection Agency’s (“EPA”) Lead-Based Paint Renovation, Repair and Painting Program (RRP) when into effect. The RRP is a Federal regulatory program affecting contractors and others that provide remodeling, repair, and related work, that “disturbs” painted surfaces in residential homes, apartments, and schools and day-care type facilities, among others, constructed prior to 1978.
Though well-intentioned as a means to resolve construction defect disputes prior to litigation, the application of Florida Statute Chapter 558’s procedures can be unwieldy in practice, with cases interpreting its provisions emanating from Florida’s courts in a piecemeal fashion.
Most business dealings have traditionally been supported by guaranty agreements; however, recent economic challenges are regularly testing the validity and enforceability of such promises. With defaults running rampant on all fronts, severely impacting global financial markets, it is clear that a better understanding of these instruments is in order.
We’ve all seen those plants and tree limbs which extend beyond someone’s property. What if that foliage obstructs traffic signs or blocks a driver’s view of an intersection? Is the property owner then liable for any resulting accident? Yes, according to Florida law. Property owners cannot allow their trees or hedges to grow into the public right-of-way. The law expects that owners can and should monitor their properties to determine if overgrown foliage poses a risk or danger to third parties.
Most lienors do not know that a statute exists which, if properly exercised, could have their liens discharged and cancelled in a very short period of time.
The notion of shifting liability for personal injury or damage to property from one party to another has become common place, especially within construction contracts.
If you’ve been sued, you likely received a subpoena for deposition during the litigation process. A deposition gives the lawyer and the client their best opportunity to examine witnesses and gain a better understanding of the claims and defenses in a matter.
It is customary for general contractors to include pay when paid clauses in their contracts, attempting to limit any requirement on their part to pay their subcontractors until they’ve received payment from the project’s owner.
These days, a lot of companies want their employees, especially those in key positions, to sign non-compete agreements. They want to be sure that if their employees leave, thinking things may be better somewhere else, they won’t be allowed to call on the company’s customers or take business over to a competitor.
Stay in business long enough and you will inevitably become a creditor in someone’s bankruptcy – a disappointing development made worse when you receive a demand from the Trustee’s counsel asking for the return of a payment you recently received from the bankrupt debtor.
There are an estimated 35,000 homes in Florida that were built with Chinese drywall from 2004 to 2008, some 30% of the installations nationally.
A contractor agreed to build a two story garage, but early in the project realized he had made a mistake. He had constructed the foundation footer shorter than the length needed. He advised the owners and proposed a resolution.
Contractors have long accepted the idea that they have little chance of enforcing a lien filed against a landlord for contracted tenant improvements. Landlords have had the upper hand for years on this issue. As long as they recorded a copy or an abbreviated version of the applicable lease, or as most landlords do, filed a statement that its leases prohibit any encumbrance or lien for improvements initiated by their tenants, landlords have been able to limit their liability for tenant improvement liens.
Those involved in the construction industry know that there are specific requirements for the filing of a mechanic’s lien. One involves time; another the amount. Both were addressed in a recent case pitting a builder against the purchaser of one of his homes. The buyer signed a contract for $246,700; however, when the base price …
A lienor can waive or release its construction lien anytime it wishes to settle its claim.
More than midway into a project, two architects were terminated by a college for unsatisfactory performance. The college also alleged that since the architectural partnership had never obtained the requisite certificate of authorization, there was actually no valid contract in place.
Many of today’s mergers and acquisitions have hidden risks, which, if unaddressed, could prove financially fatal years after a deal is completed.
The World Health Organization estimates one in every six commercial buildings in the U.S. suffers from “sick building syndrome.” 20,000 new cases of bacterial pneumonia per year are spread through HVAC systems.
An aircraft maintenance company went about fixing a Boeing 767 brought in for service. After completing its work, the shop returned the jet to its owners along with a bill for the repairs. When, in a few months, the shop didn’t get paid, it placed a repairman’s lien on the plane – recording notice of the monies it was owed. Suit was eventually filed to foreclose the lien; an open and shut case thought the repair shop. But in what could become a game changer for all those whose business practice has been to release items before getting paid, the court denied the lien enforcement action.
Given the vagaries and uncertainties these days in loan commitments as well as material prices, not to mention the overall state of the construction industry, one can quickly understand why pay-when-paid provisions have become so critical in construction contract negotiations.
You think you have an understanding. So you prepare and sign an agreement with all the key points, and send it to the other side for signature. You even add a provision, asking that the document be signed and returned by a particular date. What if it isn’t; do you still have a deal?
Florida courts have consistently held that a settlement agreement resulting from a mediation will not be enforced without the signatures of both the attorney and the client. The fact that an attorney may have signed on behalf of his client or in the presence of his client is not sufficient to overcome the legal requirement that such an agreement also have the client’s signature.
When an engineer agreed to help out a fellow professional whose license to practice had been revoked, he didn’t bargain on becoming the subject of disciplinary proceedings. He had assumed the role of engineer of record on two ongoing projects, and reviewed the work performed to date by the now unlicensed engineer. He did so …
Formalities associated with executing a legal document do matter, and as a landlord recently discovered, one could win the battle, but lose the war on this issue. The case involved a flawed office lease. While Florida Statutes require that any conveyance of real property have two witnesses, this lease didn’t have any witness signatures for either the landlord or the tenant.
Increasing use of restrictive covenants protect firm’s intangible assets but can limit employees’ future career opportunities.
Noncompete agreements operate to restrict an employee from competing against his or her employer in the event that the employee leaves the company.
Too often in the law, great advancements are encountered by greater obstacles.
The preparation of a construction claim of lien appears to be such a routine task that many take for granted the importance of who is actually authorized by statute to do so.
We’ve all seen them – those clauses on proposals or work orders stating that a repairman won’t be responsible or liable for any damage caused by his repairs. The question is, are they enforceable? A recent case has determined they can be, if properly written.
All contractors actively engaged in construction work are undoubtedly familiar with Notices to Owner – that section in most mechanics’ lien statutes which outlines what a materialman, laborer, subcontractor or sub-subcontractor, who is not in privity with the owner, must do to perfect his lien rights in order to record a claim of lien.
The Florida Legislature recently passed a new law that allows state agencies, as of October 1, 2004, to purchase owner-controlled insurance in connection with a public construction project, if necessary and in the best interest of the public agency.
The American Institute of Architects produces contract and bond forms regularly utilized by the construction industry.
The prevailing party for the purpose of a contractual attorney’s fee provision is the party that prevails on the significant issues in the litigation.
A recent case addressed a little known Florida statute. Fence Masters Inc. v. Zurqui Construction Services Inc. stemmed from a subcontractor’s request for payment on work done to improve public property under a contract with a general contractor.
Florida Statute §255.071 is a little known but potent tool for subcontractors and materialmen.
In essence, there are two possible types of theories of liability in construction litigation – those arising in tort, and those arising in contract. In tort cases, the primary theory of liability would be in negligence. Contract related disputes are more commonplace at the courthouse.
Statutes of limitations set out the time frame for bringing a lawsuit. File after the established time and you’ll be out of luck. It is therefore important to properly analyze the facts of your claim so you can select and calendar the correct time period within which to file. Sometimes, however, the applicable circumstances do …
Under Fla. Stat. §713.07(2), liens under §713.05 (persons in privity) and §713.06 (persons not in privity) attach and take priority as of the time that the notice of commencement is recorded.
A promise to sell real property can be just so many words if it isn’t reduced to writing.
Because of the length of time it takes to complete a project, the number of parties involved, and the general unpredictable nature of construction work, it is rare that a contract for such work remains unchanged from start to finish.
As a general rule, the limitation period in most jurisdictions for filing a materialman’s lien on a property, assuming all other conditions have been met, begins to run when the materials are delivered to the property.
The most common refrain I hear when talking to clients about Contract Review and Administration is: “I only sign a standard contract.”
A contractor can not be compelled to arbitrate a dispute with his supplier if the only place arbitration is mentioned is within the terms and conditions of the supplier’s website. While it is often standard practice for suppliers to have their terms of sale printed on their invoices, one Florida supplier simply relied on the fact that this information was on its website. Bad idea.
Forget to obtain that license from the municipality or county where you are working, and be ready to face the music.
What if you’re selected as a subcontractor on 2 different jobs with the same general contractor (GC) and the GC doesn’t pay you in full on your first job? You decide to delay starting the second job until the GC provides you some assurance that it can and will pay you on job 2. That …
A recorded lien tells the world that you have an interest in someone’s property. But that doesn’t stop the property owner from transferring the lien to some other form of security, such as a bond or cash. This way, the owner can sell or mortgage the property. If that happens, however, you as the lienor …
A key factor for a contractor to consider in pricing its goods and services at an amount that is both palatable to the purchaser and profitable for the contractor is an astute evaluation of the underlying costs and any expected increases.
Because purchasing a home is typically the largest purchase a person makes in their lifetime, it quickly becomes a roller-coaster ride of excitement and emotions, encompassing hours of research, projections, and financial analysis.
Many contracts are impenetrable with their fine print, multiple pages and complicated language. What is a subcontractor to do? At the very least, smaller construction firms should focus on those areas where a mistake could be costly and exposure is likely.
A sprinkler contractor submitted its final pay application through a sworn statement, noting that no additional work was required on the project and that one hundred percent of its work was completed. Ninety four days later when it wasn’t paid, it served its Notice of Non-Payment with the project surety. In the lawsuit that followed, …
Shifting the risk of an owner’s possible nonpayment from one party to another is neither simple nor guaranteed.
Firms which decide to participate in the “Design/Build” Construction Delivery System agree to both construct and design the project.
If you are the owner of a property that is the site of a construction project, one way to limit your exposure to the individuals and companies working on the project is to make “proper” payments during the course of construction.
If a homeowner has a problem with either the design, planning or construction of an improvement to his real property, he must initiate legal action within four years of the date of actual occupancy by the owner, the date of issuance of a certificate of occupancy, the date of abandonment of construction if not completed
You would think that words such as “leak” and “repair” are easily understood but that wasn’t the case for one particular roofer. He agreed to perform roof maintenance and repairs for a community in return for set monthly payments.
Construction contracts and construction-related statutes generally provide the prevailing party with recovery of its incurred attorneys’ fees.
This topic has always created a dilemma for contractors, design professionals and their insurance agents.
Far too often, feelings of elation and the excitement of purchasing a new condominium can sour when the buyer becomes aware of one or more construction defects. A dream unit can become a nightmare once flaws, both patent and latent, are encountered after the developer has turned over the project and left the site. Who is accountable for the necessary repairs?
Nothing is more frustrating to a creditor than being told that despite holding all the right documents on a defaulted obligation, it cant immediately take back the personal property which collateralizes or otherwise forms the basis of a prior transaction.
While most everyone is aware that states have statutes which govern construction or mechanic’s liens, many do not realize the significance of the law of contracts on contractor claims.
Good contracting practices, The contract documents, work defined, …
Subcontract price, payment, time, extensions of time, …
Change Orders, Notices and Claims, Bonds and Insurance, Indemnification…
It is no surprise that your Subcontractors will retain the services of other specialized trade professionals and suppliers in the performance of their duties.
The devil is in the details. This is particularly true in construction.