New WA Law Caps Retainage on Private Projects at 5%
May 29, 2023 —
Brett M. Hill & Ryanne S. Mathisen - Ahlers Cressman & Sleight PLLCThis month, Governor Jay Inslee signed into law a new statute that caps retainage on private construction projects to five percent (5%), provides a mechanism for subcontractors to get paid their retainage prior to project completion, and allows for contractors and subcontractors to post a retainage bond and get paid their retainage early. For those interested in reading the full text of this new law, the statute can be found
here.
The new statute goes into effect on July 23, 2023. Under the statute, when a contractor or subcontractor considers their work under a contract subject to retainage complete, they may notify the party they contracted to perform the work for. Within 15 days of receiving the notice of completion of work, the party receiving the notice must respond with either (1) notice of acceptance of work or (2) notice of uncompleted items to the contractor or subcontractor.
If the party receiving notice does not provide notice of uncompleted items within 15 days or fails to respond to the notice of completion entirely, the unpaid retainage will begin to accrue interest at a rate of one percent (1%) per month, 30 days after the initial 15-day period. However, this interest will not accrue against a contractor who has not been paid the retainage by an upper-tier contractor or owner until payment has been received, so long as that contractor has submitted its subcontractor’s notice of completion to the upper-tier contractor or owner within 30 days of receipt.
Reprinted courtesy of
Brett M. Hill, Ahlers Cressman & Sleight PLLC and
Ryanne S. Mathisen, Ahlers Cressman & Sleight PLLC
Mr. Hill may be contacted at brett.hill@acslawyers.com
Ms. Mathisen may be contacted at ryanne.mathisen@acslawyers.com
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Statute of Frauds Applies to Sale of Real Property
April 19, 2022 —
David Adelstein - Florida Construction Legal UpdatesIn law school, one of the first legal doctrines we learn is known as the “statute of frauds.” The statute of frauds is essentially a defense to a contract enforcement action claiming the contract is unenforceable due to the statute of frauds. In other words, this doctrine is raised when one party seeks to enforce a contract. The other party argues, “not so fast,” because the contract is NOT enforceable in light of the statute of frauds.
Common scenarios where the statute of frauds comes into play are with transactions involving real property or agreements where services are not to be performed within one year.
The statue of frauds doctrine is contained in Florida Statute s. 725.01:
No action shall be brought whereby to charge any executor or administrator upon any special promise to answer or pay any debt or damages out of her or his own estate, or whereby to charge the defendant upon any special promise to answer for the debt, default or miscarriage of another person or to charge any person upon any agreement made upon consideration of marriage, or upon any contract for the sale of lands, tenements or hereditaments, or of any uncertain interest in or concerning them, or for any lease thereof for a period longer than 1 year, or upon any agreement that is not to be performed within the space of 1 year from the making thereof, or whereby to charge any health care provider upon any guarantee, warranty, or assurance as to the results of any medical, surgical, or diagnostic procedure performed by any physician licensed under chapter 458, osteopathic physician licensed under chapter 459, chiropractic physician licensed under chapter 460, podiatric physician licensed under chapter 461, or dentist licensed under chapter 466, unless the agreement or promise upon which such action shall be brought, or some note or memorandum thereof shall be in writing and signed by the party to be charged therewith or by some other person by her or him thereunto lawfully authorized.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Residential Construction: Shrinking Now, Growing Later?
August 17, 2011 —
CDJ STAFFJim Haugey, the Chief Economist for Reed Construction Data noted that new residential construction spending fell 0.2% in June and a slightly larger drop of 0.5% in residential remodeling. While economic growth is still low, Haugey states that homebuilders have “record low inventories.” He forecasts a shrinkage of 1.5% in 2011, followed by about 20% growth in 2012.
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Acord Certificates of Liability Insurance: What They Don’t Tell You Can Hurt You
June 28, 2013 —
David McLainAs anyone involved in construction knows, one of the most heavily used forms for tracking insurance information during the subcontracting phase of a project is the Acord Certificate of Liability Insurance. General contractors often require subcontractors to provide these ubiquitous forms as evidence that the subcontractor maintains adequate insurance or insurance which complies with the requirements of the subcontract. Unfortunately, experience has shown that the Acord forms being used today are insufficient sources of the information needed by the developer and general contractor.
Historically, developers and GCs would require Acord forms to ensure that a subcontractor had a CGL insurance policy, with sufficient limits, and which named them as additional insureds. More recently, developers and GCs took the additional step of requiring a confirmation on the Acord forms that they were named as additional insureds for both ongoing and completed operations. This is important because coverage for ongoing operations only provides coverage during the construction process. Once the homes are put to their intended use, developers and GCs must be named as additional insureds for completed operations also in order to avail themselves of the benefits of the policy. Unfortunately, this is where the evolution of the use of the Acord forms ended, resulting in a failure to provide sufficient information to protect developers and GCs from the unknown.
My firm has had a rash of recent experience where our clients have not obtained the benefit of additional insured coverage for which they bargained because they relied on Acord forms which failed to provide sufficient information to allow them to protect themselves from insufficient insurance coverage on the part of the subcontractors with which they did business. For example, in one recent case a homeowners association alleged insufficient grading and drainage away from the homes within a development built by one of our clients. In reviewing the insurance information from the construction files, we found the Acord forms from the excavating company that performed all of the grading work around the homes. To our delight, the Acord form listed our client as an additional insured for both ongoing and completed operations.
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David M. McLainDavid M. McLain can be contacted at
mclain@hhmrlaw.com
Language California Construction Direct Contractors Must Add to Subcontracts Beginning on January 1, 2022, Per Senate Bill 727
December 20, 2021 —
William L. Porter - Porter Law GroupSenate Bill No. 727, Imposing Liability on Contractors for Wage Claims of Subcontractor Employees:
California Senate Bill 727 was approved by the Governor on September 27, 2021. The new Act amended Labor Code Section 218.7 and added a new section 218.8 to the Labor Code. Both Labor Code sections impose on “direct contractors” in the construction industry (defined by Civil Code 8018 as “a contractor that has a direct contractual relationship with an owner”) liability for the wage violations of their subcontractors and sub-subcontractors at any tier when working on California private construction projects.
Specifically, new Section 218.8 expands the liability of direct contractors for wage claims of the employees of subordinate subcontractors on projects for contracts executed beginning on January 1, 2022. The liability of the direct contractor under Labor Code 218.8 will include “any debt owed to a wage claimant or third party on the wage claimant’s behalf, incurred by a subcontractor at any tier acting under, by, or for the direct contractor.” Specifically included as listed liabilities of the direct contractor are: “any unpaid wage, fringe or other benefit payment or contribution, penalties or liquidated damages, and interest owed by the subcontractor on account of the performance of the labor.”
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William L. Porter, Porter Law GroupMr. Porter may be contacted at
bporter@porterlaw.com
Defects in Texas High School Stadium Angers Residents
March 07, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to WFAA News, many residents of Allen, Texas were upset when their tax dollars were spent on a new high school football stadium, and they are angry now that alleged construction defects may cause the stadium to close, and perhaps not even reopen again this fall.
There “is a disproportionately large amount of our tax dollars that goes just to Allen ISD," Rachel Palmer, an Allen resident, told WFAA News.
However, Ben Pogue, president of Pogue Construction, the stadium’s general contractor called the situation “a road bump.” WPAA News also interviewed Dr. Simon Chao of the Department of Civil Engineering at the University of Texas at Arlington: "Cracking is fairly common in concrete," Chao stated. "The problem is the damage water may cause by getting in the cracks.”
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COVID-izing Your Construction Contract
December 21, 2020 —
Frederick E. Hedberg - Construction ExecutiveThe global COVID-19 pandemic has changed the world forever, disrupting many industries, as well as creating unprecedented challenges that threaten many businesses. The construction industry is no different. Projects throughout the country have been adversely affected by unplanned work stoppages, delays, disruptions to the supply chain, price escalations and other unanticipated events.
It is critical that owners, developers, contractors and suppliers learn from their experiences over the past year and account for the COVID-19 pandemic when drafting and negotiating contracts for their projects.
First and foremost, parties should clearly define their rights and responsibilities to properly manage risks due to COVID-19 and its impacts. COVID-19 and other key related terms should be defined, relying on the CDC and state governments for guidance, to eliminate any uncertainties. The contract should also identify executive orders, guidelines and regulations that have been issued concerning COVID-19 by states, municipalities and other authorities that have jurisdiction where the project is located.
Reprinted courtesy of
Frederick E. Hedberg, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
Mr. Hedberg may be contacted at fhedberg@rc.com
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No Additional Insured Coverage Under Umbrella Policy
March 12, 2014 —
Tred R. Eyerly – Insurance Law HawaiiThe additional insured was not covered under a property policy for an injury occurring after work was completed. Lewark v. Davis Door Servs., 2014 Wash. App. LEXIS 341 (Wash. Ct. App. Feb. 10, 2014).
Public Storage, Inc. hired Davis Door Service Inc. to perform work at its facilities. The master agreement required Davis Door to maintain a CGL policy that insured Public Storage "during the entire progress of the work." Davis Door secured a CGL policy with American Economy. It also took out an umbrella liability policy with American States.
After Davis Door completed work on a door, Terrie Lewark injury her back opening the door. She sued Public Storage and Davis Door. Lewar and Public Storage settled. Public Storage assigned to Lewark its rights under the umbrella policy with American States. Lewark then sued Davis Door and American States. The trial court found that Public Storage was not an additional insured under the American States umbrella policy.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
