The Great London Property Exodus Is in Reverse as Tenants Return
June 06, 2022 —
Lizzy Burden - BloombergTenants flocking to London are driving up rents in the capital, reversing the pandemic “race for space” and adding to the UK’s cost-of-living crisis.
A record 30% of homes let in London this year went to people who previously lived outside the city, according to estate agent Hamptons. The surrounding areas of Berkshire, Buckinghamshire, Essex, Hertfordshire, Kent and Surrey –- known as the Home Counties – now account for more than half of tenants moving in.
However, people are tending to move to London for lifestyle reasons rather than because they are being summoned back to the office, Hamptons said. Study and changes in family circumstances are often providing the trigger.
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Lizzy Burden, Bloomberg
Breaking The Ice: A Policyholder's Guide to Insurance Coverage for Texas Winter Storm Uri Claims
August 30, 2021 —
Kelly A. Johnson - Saxe Doernberger & Vita, P.C.The devastating extreme cold weather event in Texas often referred to as Winter Storm Uri, which lasted from February 14 to February 18, 2021, caused significant damages to homes and businesses in the region. Temperatures during the winter storm were the coldest on record since 1883, with some areas reaching as low as negative 6 degrees.4 Millions of Texans were impacted and many lives were lost.
Insurance analysts predict that Uri will lead to the largest number of insurance claims in the state, totaling $20 billion in claimed losses.5 In fact, Uri is set to surpass Hurricane Harvey as the most devastating natural disaster in Texas, which resulted in $19 billion in insured losses. Further, Uri will be the largest insured loss from a United States winter storm in the industry’s history.6
The catastrophic Uri losses range from damage to property caused by the bursting of frozen pipes, collapsed roofs, weakened structures, loss of power, lack of public utility services, and the expenses incurred in the disruption of normal business operations. In addition, some commercial businesses were unable to operate due to bad weather conditions on the roads, while others were forced to halt operations due to power outages.
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Kelly A. Johnson, Saxe Doernberger & Vita, P.C.Ms. Johnson may be contacted at
KJohnson@sdvlaw.com
Know Whether Your Course of Business Operations Are Covered Or Excluded By Your Insurance
December 27, 2021 —
David Adelstein - Florida Construction Legal UpdatesIt is a good idea to know what your insurance covers and does not cover. This way, if your course of business has you performing a certain (risky) operation, you know whether that operation is covered or excluded under your policy. If you are not sure, discuss with your insurance broker — this is important. There is little value performing an operation that is NOT covered by your insurance policy, as you are now performing a risk that is not covered by insurance. If you know it is not covered by insurance you may elect to change your operations or see if there is insurance to cover the risk. Below is a case study of this occurrence dealing with a commercial automobile liability policy where an insured’s operations using a crane mounted to a super duty truck was not covered under their automobile liability policy.
In People’s Trust Ins. Co. v. Progressive Express Ins. Co., 46 Fla. L. Weekly D262a (Fla. 3d DCA 2021), homeowners hired a company to install a shed. The company hired another company to deliver and install the shed using a crane; the company used a crane mounted to a Ford F-750 super duty truck. This company improperly operated the crane resulting in the shed falling and damaging the homeowner’s roof. The homeowners submitted a claim to their property insurer and their property insurer subrogated to their rights and sued. The company operating the crane’s commercial automobile liability insurer denied coverage, and thus, denied the duty to defend. As a result, a
Coblentz-type agreement was entered into where the company operating the crane consented to a judgment in favor of the property insurer (subrogee) and assigned its rights under its commercial automobile liability policy to the property insurer. The property insurer then sued the automobile liability carrier for coverage. The trial court granted summary judgment in favor of the automobile liability insurer finding there was no coverage and this was affirmed on appeal. Why?
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Construction Contract Terms Matter. Be Careful When You Draft Them.
February 01, 2022 —
Christopher G. Hill - Construction Law MusingsIn a prior post, I discussed the case of Fluor Fed. Sols., LLC v. Bae Sys. Ordinance Sys in the context of the interplay between fraud, contract, and statutes of limitation. Some cases just keep on giving. This time the case illustrates the need for careful drafting of those
pesky, and highly important, clauses in your construction documents.
In the
current iteration of this ongoing saga, the Court considered the contractual aspects of the matter. As a reminder, the facts are as follows: In May 2011, the United States Army (“Army) awarded BAE Systems Ordnance Systems, Inc. (“BAE”) a contract to design and construct a natural gas-fired combined heating and power plant for the Radford Army Ammunition Plant (“RAAP”). On October 7, 2015, BAE issued a request for a proposal from Fluor Federal Solutions, LLC (“Fluor”) to design and build a temporary boiler facility at a specific location on the RAAP property. On October 13, 2015, the Army modified the prime contract to change the location of the boiler facility. On December 10, 2015, the Army modified the prime contract to require BAE to design and construct a permanent boiler facility. On December 30, 2015, Fluor and BAE executed a fixed-price subcontract for Fluor to design and construct the temporary boiler. Throughout 2016, BAE issued several modifications to Fluor’s subcontract to reflect the modifications BAE received from the Army on the prime contract. On March 23, 2016, BAE directed Fluor to build a permanent – rather than temporary – boiler facility. On March 28, 2016, Fluor began construction of the permanent facility and began negotiations with BAE about the cost of the permanent facility. On September 1, 2016, the parties reached an agreement on the cost for the design of the permanent facility, but not on the cost to construct the permanent facility. On November 29, 2016, the parties executed a modification to the subcontract, officially replacing the requirement to construct a temporary facility with a requirement to construct a permanent facility and agreeing to “negotiate and definitize the price to construct by December 15, 2016.” The parties were unable to reach an agreement on the construction price.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
New OSHA Fall Rules to Start Early in Minnesota
June 14, 2011 —
CDJ STAFFMinnesota has elected to implement the new OSHA rules concerning fall prevention in residential construction on June 20, well before OSHA’s September 15 deadline. Brian Johnson, reporting in Finance and Commerce, quotes Pam Perri, the executive vice president of the Builders Association of Minnesota, “this is the worst time to implement a new rule.” Ms. Perri notes “In Minnesota, education time for the residential construction industry is between November and March 1, not in the middle of the construction season.”
Mike Swanson of Rottlund Homes estimated that the new regulations would add between $200 to $500 to the cost of a house and that he felt the current safety regulations were adequate. OSHA officials are quoted that there continues “to be a high number of fall-related deaths in construction.”
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There’s an Unusual Thing Happening in the Housing Market
October 03, 2022 —
Tracy Alloway - BloombergIt’s no secret that the US housing market has been softening as interest rates rise at the fastest pace in decades.
Higher mortgage rates mean the dramatic growth in home prices that we’ve seen over the past two years is beginning to slow. Sales of new homes recently came in at the weakest monthly level since 2018. Meanwhile, purchase applications are down 20% year-on-year, and so on.
But the rapid pace of rate hikes has also resulted in an interesting statistical anomaly. Months of supply — or the number of months it would take for the existing inventory of homes on the market to sell at the current sales pace — has jumped to 4.1 from a record low of just 2.1 back in January of this year. And, as Morgan Stanley strategist James Egan notes, rarely have we seen an increase of this size.
To some extent, the jump in inventory is to be expected. It’s maths. As sales volume falls while inventories rise, months of supply naturally increases.
But such a jump is intuitively striking, and the key question for housing-watchers is whether the absolute level of inventory — which is still low by many measures, even as homebuilders have ramped up construction since last year — will turn out to be more important than its rate of change. A housing market that is structurally undersupplied is going to be a lot less vulnerable to fewer sales.
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Tracy Alloway, Bloomberg
Real Estate & Construction News Roundup (11/8/23) – New Handling of Homelessness, Decline in Investments into ESG Funds, and Shrinking of a Homebuyer’s Dollar
December 11, 2023 —
Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law BlogOur latest roundup includes two large flood control projects in New Jersey, how residential REITs could benefit from higher interest rates, how the downfall of WeWork could cause expansive collateral damage, and more!
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Pillsbury's Construction & Real Estate Law Team
Significant Victory for the Building Industry: Liberty Mutual is Rejected Once Again, This Time by the Third Appellate District in Holding SB800 is the Exclusive Remedy
December 15, 2016 —
Richard H. Glucksman & Ravi R. Mehta – Chapman Glucksman Dean Roeb & Barger Bulletin I. Elliott Homes, Inc. v. Superior Court (Certified for Publication, Cal. Ct. App. Dec. 2, 2016
The California Court of Appeal for the Third Appellate District recently elaborated on the scope of the Right to Repair Act, commonly known as SB-800 (“Act”). In
Elliott Homes, Inc. v. Superior Court of Sacramento County (Kevin Hicks, et al.) (certified for publication, Cal. Ct. App. Dec. 2, 2016), the Court considered whether the Act (and specifically the Act’s pre-litigation procedure) applies, when homeowners plead construction defect claims based only on common law causes of action, as opposed to violations of the building standards set forth in the Act (
Civil Code §896). The Court answered this question affirmatively.
The homeowners of seventeen (17) single-family homes filed a Complaint against the builder of their homes, Elliott Homes, Inc. (“Elliott”), alleging common law causes of action for construction defects. Elliott filed a motion to stay the litigation on the ground that the homeowners failed to comply with the pre-litigation procedure set forth in the Act. The trial court denied the motion, agreeing with the homeowners that this pre-litigation procedure did not apply because the homeowners had not alleged a statutory violation of the Act. Elliott appealed. The Court of Appeal purely considered the question of whether the Act, including its pre-litigation procedure, applies when a homeowner pleads construction defect claims based on common law causes of action, and not on statutory violations of the Act’s building standards.
To answer this question, the Court analyzed a recent case decided by the Court of Appeal for the Fourth Appellate District:
Liberty Mutual Ins. Co. v. Brookfield Crystal Cove, LLC (2013) 219 Cal.App.4th 98. In this subrogation case, a builder’s insurer asserted common law causes of action (but not statutory building standard violations) alleging construction defects against the builder to recover amounts paid to the homeowner after a sprinkler system failure caused extensive damage to the subject property. The trial court sustained the builder’s demurrer to the Complaint on the ground that it was time-barred under the Act. The Court of Appeal reversed the trial court’s order, holding that common law construction defect claims arising from actual damages are not covered by the Act because “the Act does not provide the exclusive remedy in cases where actual damage has occurred.” (
Liberty Mutual, 219 Cal.App.4th 98, 109).
The
Elliott Court declined to follow
Liberty Mutual, finding that that Court failed to properly analyze the language of the Act. The
Elliott Court analyzed both the statutory scheme and the legislative history of the Act to arrive at the conclusion that common law causes of action for construction defects do indeed fall within the purview of the Act.
According to the
Elliott Court, the Act “broadly applies to
any action seeking recovery of damages arising out of, or related to deficiencies in…residential construction and in such an action, a homeowner’s claims or causes of action shall be limited to violation of the standards set forth in the Act, except as specified.” Further, the Act expressly provides that “no other cause of action for a claim covered by this title or for damages recoverable under Section 944 is allowed.”
Civil Code §943(a). In turn,
Civil Code §944 allows for a recovery for the cost of repairing a building standard violation, or for the cost of repairing any damage caused by such a violation, among other things.
The limited exceptions to the Act’s applicability concern the enforcement of a contract, or any action for fraud, personal injury, or violation of a statute. Civil Code §943(a). Additionally, the Act does not apply to condominium conversions. Civil Code §896.
The Elliott Court explains that apart from these exceptions, the Legislature intended the Act to apply to all construction defect claims (regardless of damage) relating to the construction of residential properties whose sales contracts are signed after January 1, 2003. There is no exception in the Act, express or implied, for common law causes of action.
Next, the Court turns to the Act’s legislative history to buttress this conclusion. This history makes clear that the Act is a legislative response to the California Supreme Court’s holding in
Aas v. Superior Court (2000) 24 Cal.4th 627, that construction defects in residential properties are only actionable in tort when actual property damage manifests. Senate Judiciary Committee hearings indicate that the Act was the product of protracted negotiations between varying interested parties, including construction industry trade groups and consumer protection groups. The Legislature intended (1) to promulgate building standards, violations of which would be actionable, even without damage, and (2) to allow homeowners to recover for actual damage caused by construction defects not covered by the building standards. In other words, the Act was intended to provide homeowners redress regardless of whether damage had manifested.
Therefore, the Court concluded that common law causes of action for construction defects, regardless of damage, are subject to the pre-litigation procedure set forth in the Act. The Court issued a writ of mandate directing the trial court to vacate its earlier order, and to enter a new order granting Elliott’s motion to stay the litigation until the homeowners (and Elliott) have satisfied the pre-litigation procedure of the Act.
II. McMillin Albany, LLC v. Superior Court (2015) 239 Cal.App.4th 1132
Similar to the Third Appellate District Court’s ruling in
Elliott, the Fifth Appellate District Court also rejected the holding of
Liberty Mutual in a matter now pending before the California Supreme Court:
McMillin Albany, LLC v. Superior Court (2015) 239 Cal.App.4th 1132 (review granted and opinion superseded sub nom.
Albany v. Superior Court 360 P.3d 1022). Also similar to
Elliott, in
McMillin a group of homeowners filed common law construction defect claims against the builder of their homes. The builder,
McMillin, moved to stay the litigation pending compliance with the Act’s pre-litigation procedure. The trial court denied the motion, holding that the Act does not apply because the homeowners have not asserted statutory building standard violations contained within the Act.
In reasoning substantially similar to that of
Elliott, the
McMillin Court rejected Liberty Mutual’s holding that the Act is not the exclusive remedy for pursuing construction defect claims, with or without damage. Thus, the
McMillin Court issued a writ of mandate to vacate the trial court’s earlier order and to enter a new order granting McMillin’s motion to stay.
On November 24, 2015, the California Supreme Court granted the homeowners’ petition for review. In August of 2016, briefing was completed and the matter is now awaiting the scheduling of arguments. CGDRB will continue to closely monitor the pending appeal of this matter to the California Supreme Court, as well as all related developments.
Reprinted courtesy of
Richard H. Glucksman, Chapman Glucksman Dean Roeb & Barger and
Ravi R. Mehta, Chapman Glucksman Dean Roeb & Barger
Mr. Glucksman may be contacted at rglucksman@cgdrblaw.com
Mr. Mehta may be contacted at rmehta@cgdrblaw.com
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