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Is Construction in Arizona Back to Normal?

September 10, 2014 — William M. Kaufman – Construction Lawyers Blog
The Phoenix Metro area is finally pulling out of the Great Recession of 2008. Potential homebuyers are frantically looking to buy a home before interest rates rise and prices continue their ascent to normalcy. For the last several months, residential construction builders have continued to buy more land around the Valley of the Sun for new subdivisions, especially in North Phoenix and the East Valley. In fact, from January through May of 2013, in the Phoenix Metro area alone, 86 new communities have come to fruition—more than all of 2012. Nationally, single-family housing starts reached 667,000 in December 2013 according to the National Association of Home Builders tracking of single-family home starts, which is comparable to 1985 levels. It has been well documented that since the conclusion of World War II, Arizona’s population growth fostered new home construction at a rapid, almost unmatched pace. At the 2006 construction peak, Arizona’s residential construction output climbed to 64,000, more than double the average 20,000 to 30,000 new homes that are typically constructed annually. Building rates have not come close to the 2006 numbers, but new home starts increased 70 percent since 2012. So after six years after the real estate bubble popped, is the construction industry in Arizona finally back to normal? It depends on your definition of “normal.” In 2009, foreclosures reached alarming proportions. However, in 2010, the engine of Arizona’s population growth, the Phoenix Metro area, began to grow again. Since 2010, Maricopa County had added 125,000 residents. There is strong demand for new housing, and appreciating housing prices has let the construction industry get back on its feet. In residential construction, supply is tight, and all cash offers are common. We all know that Wall Street played a huge role in creating the housing bubble, and eventual bust, by facilitating the use of risky, sub-prime mortgages and turning them into securities that were sold to investors, pension-funds, and the like. Reprinted courtesy of William M. Kaufman, Lockhart Park LP Mr. Kaufman may be contacted at wkaufman@lockhartpark.com, and you may visit the firm's website at www.lockhartpark.com Read the court decision
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U.S. Homebuilder Confidence Rises Most in Almost a Year

June 18, 2014 — Shobhana Chandra – Bloomberg
Confidence among U.S. homebuilders rose in June by the most in almost a year, a sign the residential real estate market is stabilizing after reeling from severe winter weather earlier this year. The National Association of Home Builders/Wells Fargo sentiment gauge climbed to 49 this month from 45 in May, the biggest gain since July 2013, figures from the Washington-based group showed today. Readings greater than 50 mean more respondents report good market conditions. The median forecast in a Bloomberg survey called for 47. Current sales, the outlook for future purchases and prospective buyer traffic all improved this month, today’s figures showed, indicating mortgage rates close to historically low levels and a strengthening job market are sustaining demand. Improving sentiment comes as the world’s largest economy picks up this quarter following a contraction in the first three months of 2014. Read the court decision
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Reprinted courtesy of Shobhana Chandra – Bloomberg
Ms. Chandra may be contacted at schandra1@bloomberg.net

The Courts and Changing Views on Construction Defect Coverage

October 02, 2013 — CDJ STAFF
There have been changes recently in how courts interpret commercial general liability policies. Writing for Claims Journal, Burke Coleman, who is legal counsel and Compliance Manager for Demotech, looks at five recent cases and how they show changing views of CGL policies and construction defect claims. He notes that the Ohio Supreme Court concluded that “defective construction itself does not trigger coverage.” The court’s view in Westfield Ins. Co. v. Custom Agri Systems, Inc. was that a CGL policy does not protect contractors from every risk, but instead covers damage to other property that occur due to its work. But, conversely, the Georgia Supreme Court found that construction defect claims could be covered under a commercial general liability policy, noting that “the limits of coverage do not have to be found in the word ‘occurrence,’ inasmuch as the other words of the insuring agreement — as well as the policy exclusions — have their own roles to play in marking the limits of coverage.” This decision was reached in Taylor Morrison Services v. HDI-Gerling America. The Connecticut Supreme Court also concluded that defective construction could trigger coverage from a CGL policy, however, as Mr. Coleman notes, “only damage to non-defective property may be entitled to coverage.” He concludes that the North Dakota Supreme Court “has taken an even broader approach to the issue.” That court found that construction defects were covered “if the faulty work was unexpected and unintended.” Finally, the Supreme Court of Appeals of West Virginia held that faulty work can be property damage. He notes “the policy at issue included a ‘your work’ exclusion that excluded coverage for work performed by the insured, but subcontractors were excepted from the exclusion.” However, another clause excluded work performed on the behalf of the insured. Read the court decision
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General Liability Alert: ADA Requirements Pertaining to Wall Space Adjacent to Interior Doors Clarified

February 26, 2015 — Lawrence S. Zucker II and Kristian B. Moriarty – Haight Brown & Bonesteel LLP
In Kohler v. Bed Bath & Beyond (No. 12-56727, filed February 19, 2015) the United States Court of Appeals for the Ninth Circuit affirmed a grant of summary judgment in favor of a department store related to the necessary moving clearance for an interior restroom door pursuant to the Americans With Disabilities Act ("ADA"). Plaintiff, Chris Kohler, is paraplegic and requires the use of a wheelchair to move in public. On two separate days in May 2011, Kohler used the restroom inside the Bed Bath & Beyond store in Riverside, California. Of relevance to the appeal, Kohler contends there was less than ten inches of strike-side wall space on the pull side of Bed Bath & Beyond’s restroom door which allegedly made it difficult for Mr. Kohler to pull open the restroom door by pushing off the strike-side wall with one hand while pulling the door handle with the other. He also contends there was less than three inches of strike-side wall or floor space on the push side of the door, making it difficult for Kohler to open the door from the push side. The door at issue did not have a latch which would stop the door from freely swinging on a hinge. Reprinted courtesy of Lawrence S. Zucker II, Haight Brown & Bonesteel LLP and Kristian B. Moriarty, Haight Brown & Bonesteel LLP Mr. Zucker may be contacted at lzucker@hbblaw.com Mr. Moriarty may be contacted at kmoriarty@hbblaw.com Read the court decision
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No Damages for Delay May Not Be Enforceable in Virginia

January 08, 2024 — Christopher G. Hill - Construction Law Musings
Anyone who reads Construction Law Musings with any regularity (thank you by the way) knows that the contract is king in most instances here in Virginia. Any commercial construction subcontractor in Virginia is likely also very familiar with so-called “no damages for delay” clauses in construction contracts. These clauses essentially state that a subcontractor’s only remedy for a delay caused by any factor beyond its control (including the fault of the general contractor), after proper notice to the general contractor, is an extension of time to complete the work. However, in 2015 the Virginia General Assembly passed a change in the law that precluded the diminishment of any right to claims for demonstrated additional costs prior to payment. This left open the question as to which types of “diminishment” would be barred by the statute. The recent case out of the Eastern District of Virginia federal court, Strata Solar LLC v. Fall Line Construction LLC, added a bit of clarity. Read the court decision
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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

Restrictions On Out-Of-State Real Estate Brokers Being Challenged In Nevada

April 10, 2019 — Aaron D. Lovaas - Newmeyer & Dillion LLP
For years, the Nevada Real Estate Division (“NRED”) and its sub-entity, the Nevada Real Estate Commission (“NREC”), have been tasked with administering the licensing procedures applicable to real estate professionals in Nevada, as well as enforcement of the regulations governing business practices, advertising, commissions, license maintenance, and a host of other dayto-day parameters within which the profession operates. Within the past five years, however, the NREC has tasked itself with the publicly stated goal of “protecting” Nevada real estate licensees and the commissions they earn from out-of-state real estate professionals seeking to do business in the Silver State. While efforts to preserve local real estate opportunities for local brokers might seem sound, an international brokerage firm is challenging the foundation of that structure. If they win, the outcome could have huge implications on the real estate industry in Nevada. Businesses, here’s a breakdown of the existing structure and what the challenge is all about. The Existing Regulatory Structure Through amending their own regulations, the NRED and NREC have created a regulatory structure that:

Prohibits any non-Nevada licensed real estate broker from representing any seller (Nevada based or non-Nevada based) of any Nevada real estate;
Prohibits any non-Nevada licensed real estate broker from representing any Nevada resident in the purchase of Nevada real estate; and
Allows non-Nevada licensed real estate brokers to represent non-Nevada purchasers of Nevada real estate only if the out-of-state broker formally affiliates (and therefore shares commissions with) a resident Nevada-licensed broker.

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Reprinted courtesy of Aaron D. Lovaas, Newmeyer & Dillion LLP
Mr. Lovaas may be contacted at aaron.lovaas@ndlf.com

Sometimes it Depends on “Whose” Hand is in the Cookie Jar

January 21, 2015 — Roger Hughes – California Construction Law Blog
In a lengthy and somewhat detailed decision, the California Court of Appeal for First District, in Pittsburg Unified School District v. S.J. Amoroso Construction Company, Inc., Case No. A138825 (December 22, 2014), held that a public entity could unilaterally withdraw retention funds during a pending legal dispute without the court first finding that the contractor had defaulted on the public works project. Background In 2008, general contractor S.J. Amoroso Construction Company, Inc. (“S.J. Amoroso”) entered into a construction contract with the Pittsburg Unified School District (“District”) for the reconstruction and modernization of a high school in Pittsburg, California. Read the court decision
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Reprinted courtesy of Roger Hughes, Wendel Rosen Black & Dean LLP
Mr. Hughes may be contacted at rhughes@wendel.com

Millennials Skip the Ring and Mortgage

June 26, 2014 — Megan McArdle – Bloomberg
They’re living at home in growing numbers. They're not buying homes, which creates ripple effects throughout the housing market. They’re having more babies out of wedlock than in it. Why can’t millennials get it together? The first and most obvious answer is “jobs.” If you can’t find a stable job, it’s hard to move out of Mom’s basement. It’s hard to commit to a mortgage or a spouse. It's hard, in other words, to launch into the middle-class life that constitutes the American Dream. Millennials are some of the biggest victims of the financial crisis. Those without a college degree face high rates of unemployment, while those who have a sheepskin are more and more likely to be underemployed in a job that doesn’t require their degree. Even if the student loan crisis has been overstated, the rising cost of college tuition certainly doesn’t help. Read the court decision
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Reprinted courtesy of Megan McArdle, Bloomberg
Ms. McArdle may be contacted at mmcardle3@bloomberg.net

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