Effectively Managing Project Closeout: It Ends Where It Begins
August 06, 2019 —
William E. Underwood - ConsensusDocsProject closeout is sometimes one of the last things on a contractor’s mind at the beginning of a project, but project closeout can have a huge impact on a contractor’s overall profitability and success. Effectively managing the closeout process is critical, and it all begins with the negotiation and execution of the project contract. This contract can, and should, provide a complete roadmap for project closeout, as addressing these issues on the front end can set up the parties for successful project completion. It is then equally important to re-review the terms of the contract as project closeout approaches to ensure that everyone, including the owner, adheres to all contractual requirements.
This article examines several pertinent issues related to project closeout that should be addressed during the contracting stage, including defining substantial and final completion, inspection and acceptance, punch lists, and warranties.
Defining Substantial and Final Completion
Having clear definitions for both substantial and final completion in your construction contract is an important and necessary early step in achieving successful project closeout.
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William E. Underwood, Jones Walker LLPMr. Underwood may be contacted at
wunderwood@joneswalker.com
Proposed Law Protecting Tenants Amended: AB 828 Updated
June 08, 2020 —
Rhonda Kreger – Newmeyer DillionOn May 18, 2020, AB 828 was amended and is currently on its second reading in the Senate Rules Committee. This legislation proposes a temporary moratorium on foreclosures and unlawful detainers while Governor Newsom's COVID-19 emergency order is in effect. In addition to the moratorium, AB 828 also required landlords to reduce rent by 25% under certain circumstances. AB 828 was amended to remove the provision that required landlords to reduce rent by 25% for 12 months. The new provision requires landlords to allow tenant to remain in possession, and requires tenants to start paying rent the month following the end of the emergency order. Tenants must timely pay monthly rent plus 10% of any rent due and owing when the emergency order ended.
Under AB 828, a tenant may stipulate to the entry of an order in response to a residential unlawful detainer action filed by the landlord. Upon a hearing, the court determines if the tenant's inability to pay rent is the result of increased expenses or a reduction in income due to COVID-19. The court must also make a determination that there is no material economic hardship for the landlord. Upon making such determinations, the court will issue an order that permits the tenant to remain in possession, and requires tenant to commence rental payments the month following the end of the COVID-19 emergency order. Tenant's payment would include the monthly rent plus 10% of an unpaid rent during the COVID-19 emergency order, but excludes any late charges or other fees or charges. The tenant would be required to make timely payments, and if tenant fails to do so, after a 48 hour notice from landlord, the landlord can file for an immediate writ of possession in favor of the landlord and money judgment for any unpaid balance, court costs and attorneys' fees.
Newmeyer Dillion continues to follow COVID-19 and its impact on your business and our communities. Feel free to reach out to us at NDcovid19response@ndlf.com or visit us at www.newmeyerdillion.com/covid-19-multidisciplinary-task-force/.
Rhonda Kreger is Senior Counsel on Newmeyer Dillion's transactional team at our Newport Beach office. Her practice focuses on all aspects of commercial real estate law, with a particular emphasis on the representation of residential developers, merchant builders and institutional investors. You can reach Rhonda at rhonda.kreger@ndlf.com.
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More Reminders that the Specific Contract Terms Matter
January 24, 2022 —
Christopher G. Hill - Construction Law MusingsIf there is a theme I have pounded upon here at Construction Law Musings in the over 13 years of posting, it is that the specific terms of your construction contracts will make a huge difference. While there have been reminders galore, a case from the Eastern District of Virginia presented another wrinkle on this theme. The wrinkle? A factoring company.
In CJM Financial, Inc. v. Leebcor Services, LLC et. al., the Court examined this scenario (though it went into more detail than I will here): Leebcorp hired a subcontractor, Maston Creek Services to provide certain construction services under two separate contracts. Maston then hired CJM, a factoring company, and assigned CJM its receivables and the right to collect those receivables. We wouldn’t be discussing this case if all had worked out as planned, so you likely anticipate at least some of what came next. The short story is that Matson failed to pay some of its suppliers and Leebcorp exercised its termination rights under those contracts when Matson refused to cure. In the interim, CJM had paid part of certain payment applications to Matson in compliance with the factoring agreement. When Leebcorp failed to pay CJM for Matson’s work, CJM exercised its assigned rights to collect the receivables and sued Leebcorp for breach of contract. In response, Leebcorp counterclaimed for, among other counts including civil conspiracy, breach of contract based on Matson’s failure to perform. CJM moved to dismiss the counterclaims.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
LEED Certified Courthouse Square Negotiating With Insurers, Mulling Over Demolition
June 06, 2011 —
Douglas Reiser, Builders Council BlogApparently, Courthouse Square is still unresolved. The County hasnow hired an attorney to handle its insurance claim against Affiliated FM. Is there a lawsuit coming?
Right now, no lawsuit is expected. According to officials, the insurer has been acting in good faith. But, its been quite a while since Salem officials learned that the Courthouse Square building had significant concrete issues that would result in probable demolition of the LEED certified building.
If you have yet to hear about Courthouse Square, let me fill you in briefly. The Salem building was substantially completed in 2000 and LEED certified by the US Green Building Council in 2002. The project cost more than $30 Million to complete and the building was revered for its innovation as a crowning achievement for city leaders.
But, structural problems in the building’s core were discovered as early as 2002, writes Chris Cheatham of Green Building Law Update. Final tests earlier in the year, determined that the building had to be vacated. The building has been clear since July 2010.
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Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com
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The Condominium Warranty Against Structural Defects in the District of Columbia
July 24, 2023 —
Nicholas D. Cowie - Cowie Law GroupTHE CONDOMINIUM WARRANTY AGAINST STRUCTURAL DEFECTS
Condominium developers in Washington DC are required by statute to warrant against structural defects in residential condominiums. District of Columbia Condominium Act (“DC Condo Act”) § 42-1903.16(b). The warranty applies to both condominium common elements and each condominium unit. It requires a developer to repair structural defects, including any resulting damage to the condominium caused by a common element structural defect. DC Condo Act § 42-1903.16(a-1)(2). The statute creating this warranty is called the “Warranty Against Structural Defects,” contained in the DC Condo Act § 42-1903.16.
“Structural Defects” Defined
The warranty applies to “structural defects,” which are very broadly defined to include many types of construction defects. Structural defects are not just limited to defects in the supporting structure of the building. Rather, a structural defect can be any condition that:
“(A) Reduces the stability or safety of unit or common elements below standards commonly accepted in the real estate market,” or
(B) Restricts the normally intended use of all or part of the common elements of a unit and which requires repair, renovation, restoration, or replacement to serve the purpose for which it was intended.”
DC Condo Act § 42-1903.16(j)(6).
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Nicholas D. Cowie, Cowie Law GroupMr. Cowie may be contacted at
ndc@cowielawgroup.com
Discovery Requests in Bad Faith Litigation Considered by Court
June 10, 2015 —
Tred R. Eyerly – Insurance Law HawaiiThe federal district court considered a variety of discovery requests by the insured in a bad faith case against State Farm. Stephens v. State Farm Fire and Cas. Co., 2015 WL 1638516 (M.D. Pa. April 13, 2015).
The insured plaintiff was a quadriplegic. His complaint alleged that he notified State Farm, through its agent, that he would have to leave his residence for medical treatment and intended to rent the home while he received care for his disabling condition. The complaint further alleged that the insured was told by State Farm's agent that his insurance would remain unaffected by his departure while he sought medical care. Nevertheless, when the insured reported loss due to vandalism and water damage at his home, State Farm relied upon his departure from the residence to cancel his insurance.
In discovery, the insured requested three categories of documents from State Farm. First, he requested State Farm's claims manuals, guidelines and instructions materials relating to insurance claims like those made by this insured. Second, the plaintiff requested performance reviews and performance incentive programs for all of State Farm's employees who played a role in decisions in this case from 2009 to the present. Finally, the plaintiff demanded that State Farm compile information relating to other insurance lawsuits brought against State Farm involving theft, vandalism and water damage claims, as well as all lawsuits or complaints regarding the conduct of this particular claims adjuster. When the materials were not produced, plaintiff filed a motion to compel.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Vincent Alexander Named to Florida Trend’s Legal Elite
August 10, 2020 —
Vincent Alexander - Lewis BrisboisFort Lauderdale Partner Vincent F. Alexander has been named to Florida Trend’s Legal Elite as both a Legal Leader and an Up & Comer. In receiving this recognition, Mr. Alexander joins the less than 2% of active Florida Bar members who appear on this exclusive list. In addition, as a Legal Elite Up & Comer, Mr. Alexander is among only 112 attorneys who received the most votes in a special category for attorneys under the age of 40 who have exhibited leadership in the law and in their community.
Florida Trend’s Legal Elite, now in its 17th year, presents the state’s top licensed and practicing attorneys selected by their peers. In composing its 2020 edition of Legal Elite, Florida Trend invited all in-state Florida Bar members to name attorneys who they hold in high regard or who they would recommend to others. The publication also asked voters to name three up and coming attorneys. Nominated attorneys were then scored based on the number of votes that they received, with more weight assigned to votes from outside of their own firms.
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Vincent Alexander, Lewis BrisboisMr. Alexander may be contacted at
Vincent.Alexander@lewisbrisbois.com
Chicago Debt Document Says $8.5B O'Hare Revamp May Be Delayed
October 26, 2020 —
Jeff Yoders - Engineering News-RecordThe $8.5-billion revamp of O'Hare International Airport may have to be delayed because of COVID-19 related economic impacts, according to documents included in paperwork to refinance existing airport debt. The city forcefully disagreed with that summation, however, and says the project will move forward and is not endangered.
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Jeff Yoders, Engineering News-Record
Mr. Yoders may be contacted at yodersj@enr.com
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