How to Determine the Deadline for Recording a California Mechanics Lien
September 17, 2015 —
William L. Porter, Esq. – Porter Law Group BulletinThe California Mechanics Lien is one of the most valuable collection devices available to contractors, subcontractors and suppliers who are unpaid for work performed and materials supplied in relation to a California private works construction project. The mechanics lien allows the claimant to sell the property where the work was performed in order to obtain payment. As noted below, in order to pursue this remedy, certain deadlines must be met.
Know Your Mechanics Lien Filing Deadlines Generally
Working within deadlines is absolutely crucial to preserving mechanics lien rights under California law. The deadlines differ, depending on whether you are a ”direct” contractor, also known as “original” or “prime” contractor (one who contracts directly with the property owner) or a subcontractor or material supplier. The primary differences are that the direct contractor is only required to serve the “Preliminary Notice” on the Construction Lender (Civil Code section 8200-8216), whereas the subcontractor and material supplier must serve not only the Construction Lender, but also the Owner and Direct Contractor (see Civil Code section 8200(e)). Another difference is that a direct contractor has a longer period of time in which to record a mechanics lien after a valid “notice of completion” or a “notice of cessation” has been recorded (Civil Code sections 8180-8190), (60 days for original contractors as compared to 30 days for subcontractors and suppliers – See Civil Code sections 8412 and 8414).
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William L. Porter, The Porter Law GroupMr. Porter may be contacted at
bporter@porterlaw.com
Retainage: What Contractors Need to Know and Helpful Strategies
June 04, 2024 —
Gerard J. Onorata - ConsensusDocsIntroduction
Most, if not all, construction contracts contain a provision for “retainage.” The origin and concept of retainage dates back to the railroad boom that embraced Great Britain in the 1840s. In its simplest terms, retainage is a mechanism by which an owner or general contractor withholds disbursement of funds from the payment of a requisition in order to secure future performance of a contract and/or to pay for repair of defectively performed work. Retainage typically ranges from five to ten percent, with the amount being reduced as the project progresses to substantial and final completion. One of the reasons for withholding retainage is to incentivize a contractor to complete its work in accordance with the contract terms and conditions. While this may be well-intentioned in concept, it all too often leads to abuse that impacts project cash flow and raises tension between the parties. This typically happens on projects that have delay issues, deficient drawings, and/or claims of defective work. When a project has “gone bad,” the withholding of retainage is one of the first things that an owner will latch onto in order to leverage its position against a contractor. In order for a contractor to put itself in the best position possible, the following negotiation techniques and protective measures should be kept in mind.
Know Your Applicable Statute
Every state except West Virginia has statutes in place that govern the payment of retainage on public projects. On federal projects, the amount of retainage withheld shall not exceed ten percent as set forth in the Federal Acquisition Regulations (“FAR”). The common thread running through these statutes is the payment of interest as a remedy when the retainage is not timely paid. Historically, most retainage statutes were applicable only to publicly funded projects. This has recently changed with a substantial number of state legislatures recognizing that the payment of retainage on private projects was a serious enough problem to warrant regulation. These include Alabama, Arizona, California, Colorado, Connecticut, Idaho, Illinois, Kansas, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nebraska, Nevada, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, and Vermont. New York’s retainage laws relating to private projects were enacted only this past November.
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Gerard J. Onorata, Peckar & AbramsonMr. Onorata may be contacted at
gonorata@pecklaw.com
Mid-Session Overview of Colorado’s 2017 Construction Defect Legislation
March 16, 2017 —
David McClain - Colorado Construction LitigationAs the 2017 Colorado legislative session reaches the halfway point, I thought it an opportune time to provide a quick overview of the construction defect bills introduced so far this session.
Senate Bill 17-045, “Concerning a Requirement for Equitable Allocation of the Costs of Defending a Construction Defect Claim,” sponsored by Senators Grantham and Angela Williams and Representatives Duran and Wist, was introduced on January 11th and assigned to the Senate Business, Labor, and Technology Committee. This bill affects construction defect actions in which more than one insurer has a duty to defend a party by providing that if the carriers cannot agree regarding how to allocate defense costs within 45 days of the filing of a contribution action, a court must conduct a hearing regarding the apportionment of the costs of defense, including reasonable attorneys’ fees, among all carriers sharing in the duty to defend within 60 days after an insurer files its claim for contribution, unless the carriers agree to resolve the issue through a mutually agreeable, alternative process. The bill further provides that the court must make a final apportionment of costs after entry of a final judgment resolving all of the underlying claims against the insured. The bill also makes clear that an insurer seeking contribution may also make a claim against an insured or additional insured who chose not to procure liability insurance during any period of time relevant to the underlying action. Finally, the bill states that a claim for contribution may be assigned and that bringing such a claim does not affect any insurer’s duty to defend. The Senate Business, Labor, and Technology Committee heard SB 17-045 on February 8th and referred the bill, as amended, to the Senate Appropriations Committee.
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David M. McLain, Higgins, Hopkins, McLain & Roswell, LLCMr. McLain may be contacted at
mclain@hhmrlaw.com
Trends: “Nearshoring” Opportunities for the Construction Industry
July 22, 2024 —
Jerry P. Brodsky & Roberto Hernandez - Peckar & Abramson, P.C.“Nearshoring” is a hot topic throughout Latin America and is receiving increasing attention in the United States. We offer this introduction to “Nearshoring” and the opportunities it presents for your reference.
“Nearshoring” has become increasingly relevant in the context of the globalized economy. This phenomenon describes relocating production and service operations to countries geographically close to consumer markets, instead of opting for more distant locations as in traditional “offshoring”, considering, as dominant criteria, production conditions and costs.
Mexico, for example, given its strategic geographic closeness to the United States and its highly skilled labor force, is an attractive location for companies in a wide range of industries which are considering relocation or construction of new facilities and seeking to optimize costs, maintain efficiency and mitigate supply chain risks.
Reprinted courtesy of
Jerry P. Brodsky, Peckar & Abramson, P.C. and
Roberto Hernandez, Peckar & Abramson, P.C.
Mr. Brodsky may be contacted at jbrodsky@pecklaw.com
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French Laundry Spices Up COVID-19 Business Interruption Debate
April 20, 2020 —
Jeffrey J. Vita & Melanie A. McDonald - Saxe Doernberger & VitaOn March 26, 2020, Michelin-rated Napa Valley restaurants, French Laundry and Bouchon Bistro, and their celebrity chef, Thomas Keller, filed the second known
coronavirus-related declaratory judgment (DJ) lawsuit by a restaurant. The restaurants filed their DJ against Hartford Fire Insurance Company just seven days after Napa County issued a Shelter at Home Order.1 Chef Keller’s suit comes on the heels of the first such suit by a restaurant seeking to recover business income losses, filed by iconic New Orleans French Quarter restaurant Oceana Grill2 on March 17, just four days after the Louisiana governor issued an order prohibiting gatherings of more than 250 people.
As local governments seek to protect their citizens and prevent an onslaught of cases in area hospitals, they are issuing various “stay home,” “shelter at home,” and similar orders to force social distancing and to help flatten the curve of the growth in COVID-19 cases. Restaurants nationwide are especially hard hit by these orders, as many of these orders contain size limitations on gatherings, which have required that restaurants and bars limit capacity (as in the March 13th Louisiana order). Other such orders require non-essential businesses to “cease all activities in the County” (as in the Napa County Shelter at Home order). The Napa County order does not exempt restaurants as “essential businesses,” except when providing food for take-out or delivery. Other orders, still, directly address restaurants and require them to cease allowing public consumption of food and beverages (as in the subsequent, March 17th Louisiana order).
Reprinted courtesy of
Jeffrey J. Vita, Saxe Doernberger & Vita, P.C. and
Melanie A. McDonald, Saxe Doernberger & Vita, P.C.
Mr. Vita may be contacted at jjv@sdvlaw.com
Ms. McDonald may be contacted at mam@sdvlaw.com
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Risk Management and Contracting after Hurricane Irma: Suggestions to Avoid a Second Disaster
September 14, 2017 —
Stephen H. Reisman, Gary M. Stein & Adam P. Handfinger – Peckar & Abramson, P.C.Peckar & Abramson attorneys have assisted contractors in the immediate aftermath of several Hurricanes, including Andrew in 1992, Wilma in 2005, Ike in 2008, and Sandy in 2012. Based on this experience, we offer some post-storm strategies for contracting and risk management in three situations:
- Ongoing projects in the area directly impacted by the storm;
- Projects remote from the storm-impacted areas, but which may be affected by material or labor shortages; and
- Requests for assistance in recovery/clean-up/rebuild eff orts, which would be new projects.
Projects Directly Impacted By Hurricane Irma:
1. Immediately review each Owner contract to determine what notices are required for delays and/or extra costs arising from the storm. Contract notice requirements and time limits vary, whether for force majeure or other similar time and compensation rights. There is no effective one-size-fits-all solution. While the initial notice letters will likely look very similar, you should make sure that each is sent as required by the contract. Check each contract’s requirements for particulars regarding content, the form of delivery, and parties and individuals designated to receive the letters as well as carbon copy recipients like the architect. Follow-up notices and time periods differ from contract to contract and should be tracked so that if, for example, a follow-up notice is required in a week per the contract terms, it is tracked to ensure compliance.
Reprinted courtesy of Haight Brown & Bonesteel LLP attorneys
Stephen H. Reisman,
Gary M. Stein and
Adam P. Handfinger
Mr. Reisman may be contacted at sreisman@pecklaw.com
Mr. Stein may be contacted at gstein@pecklaw.com
Mr. Handfinger may be contacted at ahandfinger@pecklaw.com
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California Commission Recommends Switching To Fault-Based Wildfire Liability Standard for Public Utilities
June 25, 2019 —
Lawrence J. Bracken II, Sergio F. Oehninger, Paul T. Moura & Alexander D. Russo - Hunton Insurance Recovery BlogA state-appointed panel advised last week that California should change the standard for determining whether utilities are liable for wildfires. Under the current system, California’s Public Utilities Code § 2106 provides a private right of action by any person or entity that has suffered loss, damages, or injury caused by prohibited or unlawful acts of a public utility. Relying on this statute, property owners have asserted wildfire-related claims directly against allegedly culpable electric utility companies. Public utilities in California also face inverse condemnation claims arising out of wildfires. Under inverse condemnation, where private property is taken for public use and later damaged by the state or its agency, the state or agency is strictly liable to the property owner.
In an effort to reduce the financial impact on public utilities resulting from wildfires—as exemplified by Pacific Gas and Electric Co.’s recent filing for Chapter 11 protection in January—the California Commission on Catastrophic Wildfire Cost and Recovery recommended changing the current laws to reflect a fault-based standard. According to the panel, this change would reduce the risk of bankruptcy and decrease the cost of capital. The commission also recommended establishing a wildfire victims’ fund and setting up an electric utility wildfire board to handle the prevention and mitigation of utility-related wildfires.
Reprinted courtesy of Hunton Andrews Kurth attorneys
Lawrence J. Bracken II,
Sergio F. Oehninger,
Paul T. Moura and
Alexander D. Russo
Mr. Bracken may be contacted at lbracken@HuntonAK.com
Mr. Oehninger may be contacted at soehninger@HuntonAK.com
Mr. Paul may be contacted at pmoura@HuntonAK.com
Mr. Alexander may be contacted at arusso@HuntonAK.com
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These Are the 13 Cities Where Millennials Can't Afford a Home
June 10, 2015 —
Victoria Stilwell and Wei Lu – BloombergThere's no place like home — except when you can't afford one.
Millennials have been priced out of some of the biggest U.S. cities, with residential real estate prices rising even as wage growth remains elusive.
Bloomberg used data from the U.S. Census Bureau, Zillow Group Inc. and Bankrate.com to quantify how much more money millennials would need to earn each year to afford a home in the largest U.S. cities. The good news is that out of 50 metropolitan areas, 37 are actually affordable for the typical 18-34 year-old (scroll down to the end of the story to see the full results).
The bad news is that the areas that often most appeal to young adults are also the ones where homeownership is the most out of reach.
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Victoria Stilwell, Bloomberg and
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