Seattle’s Newest Residential Developer
March 13, 2023 —
Michael J. Yelle - Ahlers Cressman & SleightOn February 14, 2023, Seattle voters passed Initiative 135, creating the “Seattle Social Housing Developer” (“Public Developer” or “PD”) and the initiative was signed into law by Mayor Bruce Harrel on March 1, 2023.
[1] With this initiative, voters created Seattle’s newest housing developer. The PD aims to develop, own, and maintain housing in the City of Seattle.
[2] In addition, the PD also intends to retrofit acquired properties to increase energy efficiency and bring them into compliance with accessibility standards.
[3] Contractors, subcontractors, and suppliers may see this as an opportunity to compete for and build everything from new multi-unit housing to handrail installation projects. This post will explore some of the basics of contracting with a public corporation like the Public Developer and what contractors may want to consider in their business planning.
What is the PD?
The Public Developer is a political subdivision of the State of Washington, like a port or fire district.
[4] The Public Developer is not an agency or department of the City of Seattle. In this way, it is like Seattle Public Schools (SPS) because both SPS and the PD operate within the City of Seattle, but have (or will have) their own staff, procurement rules, and standard contracts distinct from the City’s. Like SPS, the PD can also enter construction and supply contracts, sue, and be sued.
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Michael J. Yelle, Ahlers Cressman & Sleight
IoT: Take Guessing Out of the Concrete Drying Process
February 06, 2019 —
Aarni Heiskanen - AEC BusinessFlooring, tiling, or painting on a concrete surface that is insufficiently dry can end up being a disaster. An experimental project recently used IoT sensors and AI to determine when it is safe to start finishing concrete surfaces.
Haste and Imperfect Conditions Lead to Failure
To successfully first cure and then dry concrete requires specific conditions. You need to maintain a temperature higher than 10°C and a relative humidity of greater than 80 percent in the concrete.
Once the concrete is hardened, you have to make sure that it is dry enough for finishing. Typically, the relative humidity should not exceed 82 percent. Some flooring materials require a humidity of less than 75 percent for successful application.
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
General Contractor Supporting a Subcontractor’s Change Order Only for Owner to Reject the Change
December 09, 2019 —
David Adelstein - Florida Construction Legal UpdatesThe opinion in Westchester Fire Ins. Co, LLC v. Kesoki Painting, LLC, 260 So.3d 546 (Fla. 3d DCA 2018) leads to a worthy discussion because it involves a common scope of work occurrence on construction projects involving a general contractor and subcontractor. The contractor submits a subcontractor’s change order request to the owner and the owner rejects the change order. What happens next is a scope of work payment dispute between the general contractor and subcontractor. Yep, a common occurrence.
In this case, a general contractor hired a subcontractor to perform waterproofing and painting. A scope of work issue arose because the specifications did not address how the window gaskets should be cut and then sealed. The owner wanted the window gaskets cut at a 45-degree angle and the subcontractor claimed this resulted in increased extra work. The general contractor agreed and submitted a change order to the owner to cover these costs. The owner rejected the change order claiming it was part of the general contractor’s scope of work even though the cutting of window gaskets at a 45-degree angle was not detailed in the specifications.
After the subcontractor filed a suit against the general contractor’s payment bond surety, the project architect further rejected the change order because gasket cutting was part of the specification requirements. (Duh! What else was the architect going to say? It was not going to concede there was an omission that resulted in a change order to the owner, right?)
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
U.K. Broadens Crackdown on Archaic Property Leasehold System
October 23, 2018 —
Sree Vidya Bhaktavatsalam - BloombergThe U.K. government is cracking down on what it called “unfair” leasehold practices as part of sweeping reforms to its housing system, in a move that would modernize the property market to bring it more in line with nations such as the U.S.
Initially prompted by a malpractice scandal, the proposed scope of the focus by the Ministry of Housing, Communities & Local Government has become far broader. A consultation will seek views not only on the practice of charging buyers an annual fee for owning leasehold properties -- known as ground rents -- it will review the whole process of buying, selling and property management of leasehold homes.
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Sree Vidya Bhaktavatsalam, Bloomberg
Faulty Workmanship may be an Occurrence in Indiana CGL Policies
April 07, 2011 —
Beverley BevenFlorez CDJ STAFFThe question of whether construction defects can be an occurrence in Commercial General Liabilities (CGL) policies continues to find mixed answers. The United States District Court in Indiana denied the Plaintiff’s Motion for Summary Judgment in the case of General Casualty Insurance v. Compton Construction Co., Inc. and Mary Ann Zubak stating that faulty workmanship can be an occurrence in CGL policies.
Judge Theresa L. Springmann cited Sheehan Construction Co., et al. v. Continental Casualty Co., et al. for her decision, ”The Indiana Supreme Court reversed summary judgment, which had been granted in favor of the insurer in Sheehan, holding that faulty workmanship can constitute an ‘accident’ under a CGL policy, which means any damage would have been caused by an ‘occurrence’ triggering the insurance policy’s coverage provisions. The Indiana Supreme Court also held that, under identically-worded policy exclusion terms that are at issue in this case, defective subcontractor work could provide the basis for a claim under a CGL policy.”
As we reported on April 1st, South Carolina’s legislature is currently working on bill S-431 that would change the wording of CGL policies in their state to include construction defects. Ray Farmer, Southwest region vice president of the American Insurance Association spoke out against the bill. “CGL policies were never meant to cover faulty workmanship by the contractor,” he said. “The bill’s supplementary and erroneous liability provisions will only serve to unnecessarily impact construction costs in South Carolina.”
Read the Opinion and order...
Read the court’s ruling...
Read the American Insurance Association statement...
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Brief Overview of Rights of Unlicensed Contractors in California
September 10, 2014 —
William M. Kaufman – Construction Lawyers BlogUnder California Contractor’s State License Law enumerated in Business and Professions Code Sections 7000 to 7191, a contractor may not “bring or maintain” any action for compensation for performing any act or contract for which a license is required unless the contractor was duly licensed “at all times” during performance. Bus & Prof Code Section 7031(a).
What does this mean and who does it include?
This is a question that often has to be answered on a case by case basis. Basically, California does not want unlicensed contractors to be able to get paid for work that should be performed by a licensed contractor. The law has set forth some general parameters. General contractors, subcontractors, and master developers must be licensed. However, suppliers, manufacturers, laborers and equipment lessors are exempt and do not need a contractor’s license. Essentially, those parties that merely furnish material or supplies without fabricating them into, or consuming them in the performance of work, do not need to be licensed. Bus & Prof Code Section 7052.
There are sever fines and penalties for those who improperly perform construction work without a license. A contract between any contractor and an unlicensed subcontractor is a misdemeanor. Lack of a license bars all actions in law or in equity for collection of compensation for the performance of work requiring a license. There are very few exceptions to this rule. A “savvy” unlicensed contractor cannot simply avoid these requirements by “subbing” out all the work to licensed contractors. Any person who uses the services of an unlicensed contractor may file a court action or cross-complaint to recover all payments made to the unlicensed contractor. In addition, a person who uses the services of an unlicensed contractor is a victim of a crime and eligible for restitution of economic losses regardless of whether that person had knowledge that the contractor was unlicensed. Bus. & Prof Code Sections 7028, 7028.16. It goes without saying that performing work without a license on projects is a bad idea.
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
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Pennsylvania Supreme Court Adopts New Rule in Breach-of-the-Consent-to-Settle-Clause Cases
August 19, 2015 —
Sean Mahoney – White and Williams LLPIn Babcock & Wilcox Company, et al. v. America Nuclear Insurers, et al., the Pennsylvania Supreme Court recently held that where a liability insurer has agreed to provide a defense to its insured in an underlying tort action subject to a reservation of rights but refuses to consent to a settlement in that action, the insured may nevertheless accept the settlement over the insurer’s objection where the settlement is “fair, reasonable, and non-collusive” from the perspective of a reasonably prudent person in the insured’s position in light of the totality of the circumstances and is covered. Babcock & Wilcox Company v. America Nuclear Insurers, No. 2 WAP 2014, 2015 WL 4430352 (Pa. Jul. 21, 2015). This decision fills an important gap in Pennsylvania precedent addressing the rules applicable when an insurer refuses to consent to an insured’s settlement of a lawsuit.
In Babcock, the underlying plaintiffs sued Babcock & Wilcox Company and Atlantic Richfield Company (“the Insureds”) alleging that the Insured’s nuclear facilities caused bodily injury and property damage. The Insureds’ liability insurers agreed to defend the Insureds subject to a reservation of rights. The insurers later refused to consent to an offer to settle the underlying action for a total of $80 million because they believed the Insureds were likely to succeed on the merits. Nevertheless, in 2009, the Insureds accepted that offer and settled the underlying action for $80 million, notwithstanding the insurer’s refusal. The Insureds then sought reimbursement of the $80 million settlement from their insurers, who rejected that request on the ground that the Insureds had breached the consent-to-settlement/cooperation provisions of the implicated policies.
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Sean Mahoney, White and Williams LLPMr. Mahoney may be contacted at
mahoneys@whiteandwilliams.com
Certifying Claim Under Contract Disputes Act
June 08, 2020 —
David Adelstein - Florida Construction Legal UpdatesUnder the Contract Disputes Act (41 USC 7101 en seq.), when a contractor submits a claim to the government in excess of $100,000, the claim MUST contain a certification of good faith, as follows:
For claims of more than $100,000 made by a contractor, the contractor shall certify that–
(A) the claim is made in good faith;
(B) the supporting data are accurate and complete to the best of the contractor’s knowledge and belief;
(C) the amount requested accurately reflects the contract adjustment for which the contractor believes the Federal Government is liable; and
(D) the certifier is authorized to certify the claim on behalf of the contractor.
41 U.S.C. 7103(b)(1). See also 48 C.F.R. s. 33.207(c) as to the wording of the certification.
The contracting officer is not required to render a final decision on the claim within 60 days if, during this time period, he/she notifies the contractor of the reasons why the certification is defective. 41 U.S.C. 7103(b)(3). Importantly, the contracting officer’s failure to render a decision within 60 days is deemed an appealable denial.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
