Tiny Houses Big With U.S. Owners Seeking Economic Freedom
July 16, 2014 —
Nina Glinski – BloombergDoug Immel recently completed his custom-built dream home, sparing no expense on details like cherry-wood floors, cathedral ceilings and stained-glass windows -- in just 164 square feet of living space including a loft.
The 57-year-old schoolteacher’s tiny house near Providence, Rhode Island, cost $28,000 -- a seventh of the median price of single-family residences in his state.
“I wanted to have an edge against career vagaries,” said Immel, a former real estate appraiser. A dwelling with minimal financial burden “gives you a little attitude.” He invests the money he would have spent on a mortgage and related costs in a mutual fund, halving his retirement horizon to 10 years and maybe even as soon as three. “I am infinitely happier.”
Dramatic downsizing is gaining interest among Americans, gauging by increased sales of plans and ready-made homes and growing audiences for websites related to the niche. A+E Networks Corp. will air, beginning today, “Tiny House Nation” a series on FYI that “celebrates the exploding movement.”
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Nina Glinski, BloombergMs. Glinski may be contacted at
nglinski@bloomberg.net
How California’s Construction Industry has dealt with the New Indemnity Law
October 22, 2014 —
Mark S. Himmelstein, Esq. - Newmeyer & DillionIt has been almost two years since the California legislature enacted changes to the state’s indemnity law affecting commercial construction contracts. Although we do not yet have any court opinions analyzing the new statutes, the attorneys at
Newmeyer & Dillion now have real world experience in negotiating such indemnity provisions. It is time to evaluate how the construction community has reacted to the changes. In this article, we examine the practical applications of the new law to various construction agreements.
Enacted on January 1, 2013, the new legislation was the latest in a series of efforts by subcontractors and their insurers to eliminate “Type I” indemnity clauses. Under a Type I provision, a subcontractor has a duty to indemnify the developer or general contractor for the negligence of the developer or general contractor or other subcontractors, in addition to the negligence of the subcontractor itself. In 2006, the law was changed to preclude Type I provisions regarding “For Sale” residential construction defect claims. At that time, there was no such restriction enacted for commercial construction contracts. However, since then, commercial subcontractors have been seeking similar legislation. Their efforts culminated in the 2013 revisions regarding commercial contracts.
Commercial Subcontracts
Pursuant to the new indemnity statute — Civil Code section 2782.05 — we have revised our clients’ commercial subcontracts to:
(a) Eliminate the requirement that the subcontractor indemnify the general contractor for the general contractor’s “active negligence;” and
(b) Include the subcontractor’s options for defending claims for which they have an indemnity obligation.
Many subcontractors have responded: “Hey, wait a minute, the new legislation eliminated Type I indemnity so you (general contractor) cannot still require any indemnification for the general contractor’s negligence”. Well, that might be the rumor in subcontractor circles, but the new statute does not eliminate indemnity for the general contractor’s passive fault. In addition, the Civil Code lists 13 instances where the new indemnity restrictions do not apply.
Residential Subcontracts
The legislature did not make anyone’s job easier by drafting a different indemnity provision for commercial subcontracts than for residential subcontracts. In fact, the residential and commercial statutes are different in several critical respects. First, the restrictions on indemnity in the residential statute apply only to construction defect claims in newly constructed “For Sale” houses. The statute does not preclude Type I indemnity provisions for any other claims arising out of residential subcontracts. In contrast, the indemnity restrictions in the commercial statute apply to all claims arising out of commercial subcontracts. In addition, the commercial statute allows indemnity for the general contractor’s passive fault. Since some subcontractors on “residential” projects perform off-site “commercial” work as well, we have amended even residential subcontracts to address the subcontractors’ various indemnity obligations for different parts of their work (e.g., residential work versus commercial work).
Owner-Contractor Agreements
The January 1, 2013 new indemnity provisions apply not only to subcontracts, but also to owner-contractor agreements. Civil Code section 2782(c)(1) precludes indemnity for an owner’s active negligence. Interestingly, the exclusions contained in Civil Code section 2782.05 for subcontracts do not apply, and the statute does not provide contractors with the option of defending claims set forth in the sections concerning subcontracts. Therefore, we have revised the indemnity provisions in owner-contractor agreements to exclude indemnity for the owner’s active negligence.
Design Professional Agreements
The 2007 revisions with respect to “For Sale” residential contracts (discussed above), and the 2013 revisions for commercial contracts do not apply to design professionals. The new indemnity statute concerning commercial subcontracts specifically excludes design professionals from the “anti-indemnity” benefits provided to subcontractors. Therefore, Type I indemnity provisions are fair game and can still be included in design professional contracts.
Conclusion
In sum, Civil Code sections 2782 et seq. now contain an increasingly complex framework for indemnity rules in construction contracts. For example, there is one set of rules for “For Sale” residential construction defect claims (no indemnity for the developer’s active or passive negligence), another for any other claims arising out of residential construction (Type I indemnity is permitted), another for commercial subcontracts (no indemnity for the general contractor’s active negligence, but indemnity for the general contractor’s passive negligence unless any of the exceptions apply, in which case Type I indemnity is permitted), and yet another for commercial owner contractor agreements (no indemnity for the owner’s active negligence, but indemnity for the owner’s passive negligence with no exceptions).
California’s indemnity laws are complex, and rumors as to the impact of the new legislation have made it even more difficult to negotiate these provisions. It is imperative that indemnity clauses in construction contracts clearly delineate the obligations for the specific type or types of work contemplated by the contract. The legislature’s attempt to simplify indemnity obligations has actually made such provisions lengthier and more cumbersome. As experienced construction attorneys, our task is to draft indemnity provisions that comply with the laws, address potential claims, and are understandable.
Mr. Himmelstein is a partner in the Newport Beach office of Newmeyer & Dillion and practices in the areas of construction, real estate, business and insurance litigation. He also specializes in drafting and negotiating construction and real estate contracts. Mark can be reached at mark.himmelstein@ndlf.com.
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Designer of World’s Tallest Building Wants to Turn Skyscrapers Into Batteries
July 31, 2024 —
Will Wade - BloombergThe architecture firm that designed the world’s tallest building is considering ways to build skyscrapers that can store energy using gravity.
Skidmore, Owings & Merrill LLP has developed a series of prototype designs that use electric motors to elevate massive blocks, creating potential energy that can be converted into electricity when the blocks are lowered. The designs are based on technology developed by partner Energy Vault Holdings Inc. as an alternative to lithium-ion batteries and other types of chemical cells. They are seeking developer partners interested in offsetting greenhouse gas pollution from buildings, which the United Nations estimates are responsible for almost 40% of global emissions.
The concept is similar to widely used pumped hydroelectric plants. Energy Vault completed its first major project this month near Shanghai, a stand-alone storage system that can supply as much as 25 megawatts of power for four hours. Other companies are testing new types of gravity storage systems, including ones using abandoned oil wells and mines.
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Will Wade, Bloomberg
New 2021 ALTA/NSPS Land Title Survey Standards Effective February 23, 2021
March 01, 2021 —
Emily K. Bias & Josh D. Morton - Gravel2Gavel Construction & Real Estate BlogThe “Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys” is a document jointly promulgated by the American Land Title Association (ALTA), representing the title insurance industry, and the National Society of Professional Surveyors (NSPS), representing professional land surveyors, which describes the uniform minimum standards with which surveyors must comply when preparing a survey to be used by a title insurance company for the purpose of deleting the general survey exception from ALTA title policy forms. The first such set of standards was developed in 1962 and has since been revised 10 times. The standards are currently updated every five years and are relied on by real estate professionals, including purchasers, lenders, title insurers and their attorneys, nationwide. In October 2020, a joint committee comprising representatives of both ALTA and NSPS adopted the “2021 Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys,” which will become effective on February 23, 2021. The significant changes between the 2021 standards and the previous 2016 standards are summarized below.
Survey Matters
The 2021 standards clarify that only survey-related matters must be summarized on the survey. This revision was intended to foreclose a practice common among some institutional lenders to require that the survey list all items shown in Schedule BII of the title commitment on the face of the survey regardless of whether those items may in fact be survey related. The 2021 standards also add a requirement that the surveyor include a note specifying whether the location of a right of way, easement or other survey-related matter is shown on the survey. This change incorporates common lender and purchaser requirements that were not previously enumerated in the survey standards.
Reprinted courtesy of
Emily K. Bias, Pillsbury and
Josh D. Morton, Pillsbury
Ms. Bias may be contacted at emily.bias@pillsburylaw.com
Mr. Morton may be contacted at josh.morton@pillsburylaw.com
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OSHA Again Pushes Back Record-Keeping Rule Deadline
November 30, 2017 —
Tom Ichniowski - Engineering News-RecordThe federal Occupational Safety and Health Administration is extending again—this time, by two weeks—the compliance date for its rule requiring companies to file annual electronic reports of workplace injuries and illnesses.
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Tom Ichniowski, ENRMr. Ichniowski may be contacted at
ichniowskit@enr.com
A Court-Side Seat: An End-of-Year Environmental Update
January 09, 2023 —
Anthony B. Cavender - Gravel2GavelAs 2022 draws to a close, here is a brief description of recent environmental and regulatory law rulings, as well as new federal rulemaking proceedings.
United States Tax Court
Green Valley Investors, LLC et al, v. Commissioner of Internal Revenue
On November 9, 2022, the Tax Court agreed with the taxpayers that the IRS’s use of administrative Notice 2017-10 to impose substantial tax liabilities violated the Administrative Procedure Act (APA). The notice was the agency’s response to a provision in the American Jobs Creation Act of 2004 which increased the penalties for engaging in a reportable transaction understatement. Here, at issue was the value of charitable deductions generated by the creation of environmental easements made in connection with land transactions. These claimed deductions amounted to more than $60 million. The petitioners argued that IRS Notice 2017-10, which authorized such large penalties, was in fact a “legislative rule” whose promulgation should have complied with the notice and comment requirements of the APA. The agency contended that the Congress, by implication, absolved the IRS from the notice and comment requirements. The court agreed with the petitioners and set aside Notice 2017-10 and the imposition of penalties under Section 6662A of the Jobs Creation Act. On December 8, 2022, the IRS published a notice of proposed rulemaking that would correct the APA deficiencies noted by the courts. (See 87 FR 75185.)
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
Owners Should Serve Request for Sworn Statement of Account on Lienor
August 10, 2017 —
David Adelstein - Florida Construction Legal UpdatesWhen an owner receives a construction lien, an owner should serve the lienor with a Request for Sworn Statement of Account. The Request for Sworn Statement is authorized by Florida Statute s. 713.16(2) and should be in the following form:
REQUEST FOR SWORN STATEMENT OF ACCOUNT
WARNING: YOUR FAILURE TO FURNISH THE REQUESTED STATEMENT, SIGNED UNDER OATH, WITHIN 30 DAYS OR THE FURNISHING OF A FALSE STATEMENT WILL RESULT IN THE LOSS OF YOUR LIEN.
To: (Lienor’s name and address)
The undersigned hereby demands a written statement under oath of his or her account showing the nature of the labor or services performed and to be performed, if any, the materials furnished, the materials to be furnished, if known, the amount paid on account to date, the amount due, and the amount to become due, if known, as of the date of the statement for the improvement of real property identified as (property description) .
(name of contractor)
(name of the lienor’s customer, as set forth in the lienor’s Notice to Owner, if such notice has been served)
(signature and address of owner)
(date of request for sworn statement of account)
From both an owner and lienor’s perspective, the bolded, capitalized language is key. It states that if the lienor fails to respond under oath within 30 days, it will LOSE its lien. That is a very punitive measure for a lienor’s failure to respond, meaning a lienor should absolutely respond, no questions asked. Plus, a lienor’s response to a Request for Sworn Statement of Account is not a burdensome ordeal.
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
Dadelstein@gmail.com
EPA and the Corps of Engineers Repeal the 2015 “Waters of the United States” Rule
January 13, 2020 —
Anthony B. Cavender - Gravel2GavelThe pre-publication version of the final rule to be promulgated by EPA and the U.S. Army Corps of Engineers (ACOE) to repeal the 2015 redefinition of the Clean Water Act’s term “Waters of the United States” which is the linchpin of these agencies’ regulatory power under the CWA, was made available on September 12, 2019. The rule should be published in the Federal Register in the next few weeks, and it will be effective 60 days thereafter. Many challenges are expected to be filed in the federal courts.
The 2015 rule was very controversial, and petitions challenging the rule were filed in many federal district courts, several courts of appeal, and finally in the Supreme Court (see NAM v. Department of Defense), which held that all initial challenges must be filed in the federal district courts. The upshot of these challenges is that, at this time, the 2015 rule has been enjoined in more than half the states while the other states are bound by the 2015 rule, a situation which is frustrating for everyone.
In addition to repealing the 2015 rule, the agencies also restored the pre-2015 definition had had been in place since 1986. As a result, the pre-2015 definition of waters of the U.S. will again govern the application of the following rules: (a) the ACOE’s definition of “waters of the U.S.” at 33 CFR Section 328.3; (b) EPA’s general Oil Discharge rule at 40 CFR Section 110; (c) the SPCC rules at 40 CFR Part 112; (d) EPA’s designation of hazardous substances at 40 CFR Part 116; (e) EPA’s hazardous substance reportable quantity rule at 40 CFR Part 117; (f) the NPDES permitting rules at 40 CFR Part 122; (g) the guidelines for dredged or fill disposal sites at 40 CFR Part 230; (g) Exempt activities not requiring a CWA 404 permit (guidelines for 404 disposal sites at 40 CFR Part 232); (h) the National Contingency Plan rules at 40 CFR Part 300; (i) the designation of reportable quantities of hazardous substances at 40 CFR Part 302; and (j) EPA’s Effluent Guidelines standards at 40 CFR Part 401.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
