Toll Brothers Shows how the Affluent Buyer is Driving Up Prices
July 09, 2014 —
Beverley BevenFlorez-CDJ STAFFJohn McManus of Big Builder explained how prices per square foot are rising due to an increase in more affluent buyers: “Discretionary buyers—ones with access to cash treasure troves, robust and growing stock portfolios, sovereign wealth in search of anti-inflationary investment, and, for good measure, throw in a smattering of seven-figure income households flush with this year’s bonus payouts—are who, unit by unit, have electrified the housing market’s recovery on the heels of institutional bulk buyers of 2012 and early 2013.”
Toll Brothers, according to McManus, “was, is, and will be the organization most committed to home buying’s discretionary buyer.”
“Thanks to the demand for luxury, and for three- and four-bedroom places, we’re seeing pricing-per-square-foot get better and better the greater number of square feet we offer,” David Von Spreckelsen, Toll Brothers City Living division president, told Big Builder.
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Specific Performance of an Option Contract to Purchase Real Property is Barred Absent Agreement on All Material Terms
December 20, 2017 —
Richard H. Herold - Real Estate Litigation BlogOn November 14, 2017, the Court of Appeals (Division 1), in Offerman v. Granada, LLC, 2017 WL 5352664, reversed a trial court order directing specific performance of an alleged option to purchase real property, holding that the alleged option was too indefinite to be specifically performed because the parties did not agree to all of the material terms of the option.
Tenant-Purchaser Offerman executed a two-year lease with Landlord-Seller Granada, which granted Offerman “the option to purchase [the] property…for a sales price to be determined at that time by an independent appraiser acceptable to both Tenant and Landlord. (Terms and Conditions to be stipulated by both parties at such time).” (emphasis added). Offerman timely advised Granada he intended to exercise the option, asked Granada to name an appraiser, and, when Granada did not respond, Offerman tendered a $240,000 appraisal to exercise the option. Granada did not retain an appraiser but instead simply demanded $350,000 to close the sale. After a bench trial, the Court determined that Offerman was entitled to specific performance, and, as the parties had not agreed to certain terms, held a second evidentiary hearing to resolve the form of judgment, therein naming a title agency to handle the escrow, setting a closing date, allocating the transaction fees between the parties, and ordering Granada to pay for the property inspection.
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Richard H. Herold, Snell & WilmerMr. Herold may be contacted at
rherold@swlaw.com
Late Progress Payments on Local Public Works Projects Are Not a Statutory Breach of Contract
May 10, 2022 —
Ted Senet & Christopher Trembley - Gibbs GidenCalifornia local public agencies and their contractors should take note of a recent appellate decision pertaining to late progress payments on public works projects. In Clark Bros., Inc. v. North Edwards Water Dist., 2022 Cal. App. LEXIS 331, filed on April 22, 2022, the Court of Appeal for the Fourth Appellate District held that a local agency’s late progress payments to a general contractor did not constitute breach of contract under the prompt payment penalty statute, Public Contract Code § 20104.50. Notwithstanding this holding, the contractor recovered damages, interest, fees, and costs in excess of its contract amount.
In 2013, the North Edwards Water District awarded a $6.2 million contract to Clark Bros., Inc. to construct a water treatment facility. The District’s water contained excessive levels of arsenic, and the project was sponsored by the State of California with funds earmarked to provide safe drinking water. The State agreed to disburse funds to the District during construction upon the State’s review and approval of the contractor’s progress payment applications. The contract required completion of the work within one year following the District’s issuance of a notice to proceed to the contractor.
As a result of factors arguably outside the control of the contractor, including unforeseen site conditions and the failure of the District’s equipment supplier to meet delivery deadlines, the project was significantly delayed beyond the deadline for completion. The District nonetheless terminated the contractor, which in turn filed suit against the District and the State. The contractor asserted claims for breach of contract, including breach of contract for the District’s failure to pay the contractor’s progress payment applications within the time specified under Public Contract Code § 20104.50. Subsection (b) of the statute provides:
Any local agency which fails to make any progress payment within 30 days after receipt of an undisputed and properly submitted payment request from a contractor on a construction contract shall pay interest to the contractor equivalent to the legal rate set forth in subdivision (a) of Section 685.010 of the Code of Civil Procedure.
Reprinted courtesy of
Ted Senet, Gibbs Giden and
Christopher Trembley, Gibbs Giden
Mr. Senet may be contacted at tsenet@gibbsgiden.com
Mr. Trembley may be contacted at Ctrembley@gibbsgiden.com
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Termination for Convenience Clauses: Maybe More Than Just Convenience
June 06, 2022 —
Robert C. Shaia - ConsensusDocsA contractor begins work on a project and everything is going well, until one day the owner informs the contractor that it is being terminated for convenience. Possibly, there is no discussion about alleged defects, reasons for the termination, or any damages the owner might seek against the contractor. In that moment, the contractor may be unaware of any perceived wrongdoing or problems with its work.
The industry has typically accepted that, in this scenario, the owner implicitly waives the right to any remedies against the contractor, except those expressly set forth in the contract. Reasonable minds might assume that, if the owner believed it needed to seek further remedies, it would terminate the contractor for cause instead of convenience. And often overlooked during contract negotiations are the benefits of including an express “waiver of remedies” in the termination for convenience section.
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Robert C. Shaia, Watt, Tieder, Hoffar, & Fitzgerald, LLP (ConsensusDocs)Mr. Shaia may be contacted at
rshaia@watttieder.com
Bay Area Counties Issue Less Restrictive “Shelter in Place” Orders, Including for Construction
May 04, 2020 —
Garret Murai - California Construction Law BlogThe short story: Construction can resume. The long story: Construction can resume beginning Monday, May 4, 2020,
with extensive and detailed restrictions.
Six Bay Area Counties Loosen Shelter-in-Place Restrictions Including Allowing Construction to Resume
Earlier this week, six Bay Area counties and the City of Berkeley issued new orders requiring the use of face coverings when in public. The six Bay Area counties, which also happen to be the first counties in the nation to issue shelter-in-place orders, are Alameda, Contra Costa, Marin, San Francisco, San Mateo and Santa Clara.
When do the revised shelter-in-place orders take effect?
The revised shelter-in-place orders take effect at 11:59 p.m. on May 3, 2020 and will remain in effect until 11:59 p.m. on May 31, 2020 unless extended, rescinded, superseded, or amended. Thus, effectively, the new orders take effect on Monday, May 4, 2020.
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
Will a Notice of Non-Responsibility Prevent Enforcement of a California Mechanics Lien?
March 05, 2015 —
William L. Porter – Porter Law Group, Inc.The “Notice of Non-Responsibility” is one of the most misunderstood and ineffectively used of all the legal tools available to property owners in California construction law. As a result, in most cases the answer to the above question is “No”, the posting and recording of a Notice of Completion will not prevent enforcement of a California Mechanics Lien.
The mechanics lien is a tool used by a claimant who has not been paid for performing work or supplying materials to a construction project. It provides the claimant the right to encumber the property where the work was performed and thereafter sell the property in order to obtain payment for the work or materials, even though the claimant had no contract directly with the property owner. When properly used, a Notice of Non-Responsibility will render a mechanics lien unenforceable against the property where the construction work was performed. By derailing the mechanics lien the owner protects his property from a mechanics lien foreclosure sale. Unfortunately, owners often misunderstand when they can and cannot effectively use a Notice of Non-Responsibility. As a result, the Notice of Non-Responsibility is usually ineffective in protecting the owner and his property.
The rules for the use of the Notice of Non-Responsibility are found in California Civil Code section 8444. Deceptively simple, the rules essentially state that an owner “that did not contract for the work of improvement”, within 10 days after the owner first “has knowledge of the work of improvement”, may fill out the necessary legal form for a Notice of Non-Responsibility and post that form at the worksite and record it with the local County Recorder in order to prevent enforcement of a later mechanics lien on the property.
What commonly occurs however is that early in the process the owner authorizes or even requires its tenant to perform beneficial tenant improvements on the property. This authorization is often set forth in a tenant lease or other written document. The dispositive factor for determining whether the Notice of Non-Responsibility will be enforceable though is that the owner knows that these improvements will be made to the property and intends that they be made, usually long before the work begins. Indeed, the owner has usually negotiated these very terms into the lease contract. The owner then mistakenly believes that once work on the property commences it has 10 days to post and record a Notice of Non-Responsibility and thereby protect itself from a mechanics lien.
The usual error is two-fold. First, the statute states that the Notice is available when the owner “did not contract for the work of improvement”. The fact though is that the owner did contract for the work of improvement. It did so through the lease contract. This is true even though the owner’s contract was not with the contractor or supplier directly. Secondly, the 10 day period to post and record the Notice begins when the owner first “has knowledge” of the work of improvement. This knowledge was of course gained when the lease was negotiated and signed, providing knowledge typically many days before the work has begun. Thus, the 10 day period can also seldom be met. The Notice of Non-Responsibility will therefore fail both rules because the owner has in fact contracted for the improvement and because he does not act within 10 days of gaining this knowledge.
The next event in the typical scenario occurs when the tenant does not pay its contractor. The contractor then has nothing to pay its subcontractors. Material suppliers also go unpaid. Mechanics liens are then recorded by the unpaid claimants, followed by foreclosure actions within ninety days thereafter. Owners will typically point to the Notice of Non-Responsibility they posted and recorded, claiming its protection. Claimants then in turn point to the lease or other evidence that the owner knew of the pending improvements and contracted in some way that the improvements be performed, often also more than 10 days before they posted the Notice. Judges generally agree with the unpaid mechanics lien claimants and the Notice of Non-Responsibility is deemed ineffective.
The fact that the Court does not enforce the Notice of Non-Responsibility under these circumstances is not an unfair result. Since the owner authorized the work to be performed and it received a substantial benefit in the form of those improvements, it is not unfair that the owner should pay for those benefits. It would be inequitable for the owner to obtain the benefit of the improvements which it authorized but for which it did not pay, while allowing those who provided the benefit to go unpaid. Moreover, without such a system in place the door would be open to owners setting up sham “tenants” who would enter into contracts to have work performed, only to disappear when the work is completed, leaving the contractor without a source of payment. The system in place as described above prevents such duplicity. Owners would do well to arm themselves with proper knowledge of when the Notice of Non-Responsibility will and will not protect them and then responsibly use the Notice of Non-Responsibility.
For the legal eagles among you, the following cases illustrate the view of the courts, consistent with the above: Baker v. Hubbard (1980) 101 Cal.App.3d 226; Ott Hardware v. Yost (1945) 69 Cal. App.2d 593 (lease terms); Los Banos Gravel Co. v. Freeman (1976) 58 Cal.App.3d 785 (common interest); Howard S. Wright Construction Co. v. Superior Court (2003); 106 Cal.App.4th 314 (participating owner).
William L. Porter of
Porter Law Group, Inc. located in Sacramento, California may be contacted at (916) 381-7868 or bporter@porterlaw.com
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KONE is Shaking Up the Industry with BIM
January 20, 2020 —
Aarni Heiskanen - AEC BusinessKONE supplies elevators, escalators, autowalks and maintenance and modernization solutions. I sat down with Kenneth Flannigan to discuss how BIM is changing KONE and what it means to the industry.
KONE operates in over 60 countries, has around 1.3 million units in service, and moves over one billion people per day. The company’s mission is “to improve the flow of urban life.” Kenneth Flannigan is the BIM Solution Owner for the company. He acknowledges that even though KONE provides equipment and software innovation, in this day and age that’s not enough.
“We’re a critical path item. How innovative are we if we’re not working on every single project in a shared 3D environment, like our customers?” Flannigan asks.
KONE serves both indirect and paying customers. It works with influencers like architects and with general contractors, builders, and construction managers. It also has a life-cycle relationship with building owners, which is evidenced by the fact that over 30% of the company’s sales come from maintenance.
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
10 Haight Lawyers Recognized in Best Lawyers in America© 2023 and The Best Lawyers: Ones to Watch 2023
August 22, 2022 —
Haight Brown & Bonesteel LLPFour Haight Brown & Bonesteel LLP attorneys were selected for Best Lawyers in America© 2023. Congratulations to:
- Bruce Cleeland – Product Liability Litigation – Defendants
- Peter Dubrawski – Product Liability Litigation – Defendants
- Denis Moriarty – Insurance law
- Ted Penny – Workers’ Compensation Law – Claimants
Six Haight Brown & Bonesteel LLP attorneys were selected for Best Lawyers®: Ones to Watch 2023. Congratulations to:
- Courtney Arbucci – Personal Injury Litigation – Defendants; Product Liability Litigation – Defendants
- Frances Brower – Product Liability Litigation – Defendants
- Kyle DiNicola – Transportation Law
- Arezoo Jamshidi – Appellate Practice; Transportation Law
- Kristian Moriarty – Transportation Law
- Bethsaida Obra-White – Construction Law; Insurance Law; Personal Injury Litigation – Defendants
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Haight Brown & Bonesteel LLP
