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Real Estate & Construction News Roundup (7/10/24) – Strong Construction Investment in Data Centers, Increase Use of Proptech in Hospitality and Effects of Remote-Work on Housing Market

August 05, 2024 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
In our latest roundup, renters stay in their units longer, GenAI change how commercial real estate operates, and banks continue high exposure due to commercial real estate.

• Strong investor interest, particularly in opportunistic and value-add segments, signals a strong market for construction firms specializing in high-yield projects. (Sebastian Obando, Construction Dive)
• A growing number of renters are staying in their units for longer periods of time than they did a decade ago with over one-third of U.S. renters have lived in the same apartment for more than five years. (Mary Salmonsen, Multifamily Dive)
• Several U.S. regional and mid-sized banks continue to face the squeeze from high exposure to the commercial real estate sector that has been shaken by higher-for-longer interest rates and empty office buildings. (Reuters)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

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Property Owner Entitled to Rely on Zoning Administrator Advice

May 16, 2018 — Kevin J. Parker - Snell & Wilmer Real Estate Litigation Blog
In the recent case of In Re Langlois/Novicki Variance Denial, 175 A.3d 1222, 2017 VT 76 (2017), the Vermont court addressed the question of whether a property owner could enforce – by equitable estoppel principles – a representation by a town zoning administrator that no permit or variance was needed for the property owner’s proposed construction. In that case, a landowner wanted to add a pergola to an existing concrete patio on his land. During a social visit at the property, the property owner asked the town zoning administrator if he needed a permit. The town zoning administrator told the property owner that no permit was needed. The property owner thereafter showed the zoning administrator a sketch of the planned construction, and again asked if a permit was required. The town zoning administrator looked at the sketch and repeated his prior advice that no permit was needed. The property owner then spent $33,000 to build the pergola. After incurring the expense, the property owner was advised that the structure violated zoning regulations. The property owner requested a variance, which the zoning board denied. The Court held that the town was estopped from requiring removal of the pergola. Read the court decision
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Reprinted courtesy of Kevin J. Parker, Snell & Wilmer
Mr. Parker may be contacted at kparker@swlaw.com

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New York Establishes a Registration Requirement for Contractors and Subcontractors Performing Public Works and Covered Private Projects

January 17, 2023 — Christopher B. Kinzel, K. Greer Kuras, Aaron C. Schlesinger - Peckar & Abramson, P.C.
By December 30, 2023, contractors and subcontractors bidding on public contracts and performing work on covered private projects in New York must register with the NYS Department of Labor, Bureau of Public Works, pursuant to the newly enacted Labor Law Section 220-i. The DOL has until June 28, 2023 to establish regulations to carry out the new law. There will be an online system where registrations and disclosures are publicly available. The stated purpose of the law is to help enforce New York’s prevailing wage and other worker protection laws. The DOL will create an online system through which contractors and subcontractors will have to answer questions and submit documents about:

• the business entity and its owners and officers
• unemployment and workers’ compensation insurance
• any outstanding wage assessments
• debarment under New York or federal law, or any other state’s laws
• final determinations of a violation of any labor laws, employment tax laws, or workplace safety standards (including OSHA)
• association or signatory to an apprenticeship program

If the DOL approves the submission, the contractor will receive a registration certificate that remains valid for two years. Reprinted courtesy of Christopher B. Kinzel, Peckar & Abramson, P.C., K. Greer Kuras, Peckar & Abramson, P.C. and Aaron C. Schlesinger, Peckar & Abramson, P.C. Mr. Kinzel may be contacted at ckinzel@pecklaw.com Ms. Kuras may be contacted at gkuras@pecklaw.com Mr. Schlesinger may be contacted at aschlesinger@pecklaw.com Read the court decision
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Florida “get to” costs do not constitute damages because of “property damage”

August 11, 2011 — CDCoverage.com

In Palm Beach Grading, Inc. v. Nautilus Ins. Co., No. 10-12821 (11th Cir. July 14, 2011), claimant general contractor Palm Beach Grading (?PBG?) subcontracted with insured A-1 for construction of a sewer line for the project.   A-1 abandoned its work and PBG hired another subcontractor to complete construction of the sewer line.   The new subcontractor discovered that A-1?s work was defective requiring repair and replacement of portions of the sewer line which also required the destruction and replacement of surrounding work.

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Reprinted courtesy of CDCoverage.com

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Sometimes It’s Okay to Destroy Evidence

August 17, 2011 — CDJ STAFF

The Minnesota Supreme Court has ruled in the case of Miller v. Lankow that Mr. Miller was within his rights to remediate his home, even though doing so destroyed the evidence of water intrusion.



Linda Lankow built a home in 1992. In 2001 or 2002, Lankow discovered a stucco problem at the garage which she attributed to moisture intrusion. She asked the original contractor to fix the wall. In 2003, Lankow attempted to sell her home, but the home inspection revealed fungal growth in the basement. Lankow made further repairs, including alterations to the landscaping.



In 2004, Lankow put her house on the market once again and entered into an agreement with David Miller. Miller declined to have an independent inspection, as the home had been repaired by professional contractors.



In 2005, Miller put the house on the market. A prospective buyer requested a moisture inspection. The inspection firm, Private Eye, Inc. found “significant moisture intrusion problems.”



Miller hired an attorney who sent letters to the contractors and to Lankow and her husband. Lankow’s husband, Jim Betz, an attorney, represented his wife and sent a letter to Miller’s attorney that Miller had declined an opportunity to inspect the home.



In 2007, Miller’s new attorney sent letters to all parties that Miller had decided to begin remediation work on the house. All stucco was removed. Miller then filed a lawsuit against the prior owners, the builders, and the realtors.



Two of the contractors and the prior owners moved for summary judgment on the grounds that Miller had spoliated evidence by removing the stucco. They requested that Miller’s expert reports be excluded. The district court found for the defendants and imposed sanctions on Miller.



The Minnesota Supreme court found that “a custodial party’s duty to preserve evidence is not boundless,” stating that “it may be particularly import to allow remediation in cases such as the one before us.” Their reasoning was that “remediation of the moisture intrusion problem in the home may be necessary, even essential, to address immediate health concerns.”



Given that Miller needed to remediate the problem in order to continue living there, and that he had given the other parties a “full and fair opportunity to inspect,” the court found that he was within his rights. The court reversed the judgment of the lower court and remanded it to them for review.

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Congratulations Devin Brunson on His Promotion to Partner!

April 26, 2021 — Dolores Montoya - Bremer Whyte Brown & O'Meara LLP
Bremer Whyte Brown & O’Meara, LLP is very proud to announce Devin Brunson has been promoted to the position of partner with the firm! Mr. Brunson came to BWB&O from another civil litigation firm and helped start the Denver, Colorado office along with partners Lucian Greco, John Toohey and Peter Brown. He has taken on a significant leadership role within the firm over the past several years and has been integral in growing the office to its current footprint. He is licensed to practice law in Colorado, District of Colorado, and in the U.S. District Court. His practice is focused in the areas of civil and business litigation, construction litigation, and employment law. Mr. Brunson has a diverse practice background that includes complex civil litigation and intellectual property disputes and has had the privilege of representing business owners, contractors, corporate executives, and professional athletes during the course of his career. Read the court decision
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Reprinted courtesy of Dolores Montoya, Bremer Whyte Brown & O'Meara LLP

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Pulling the Plug

December 13, 2022 — Todd R. Regan - Construction Executive
As a contractor, you may have wondered if your contract can be terminated by the owner for cause after the project has reached substantial completion. The answer is yes. Under certain circumstances it may be permissible—or even necessary—for a project owner to terminate the contract for cause after the project has reached substantial completion. Although the rights of the parties in any case will depend in large part on the specific contract language, the fact that a project has reached substantial completion is not an absolute bar to termination for cause, particularly when the owner intends to pursue a performance-bond claim. Completion Versus Performance Following substantial completion, a contractor typically will have outstanding contractual obligations such as paying its subcontractors and suppliers, bonding off any mechanic’s liens, completing the punch list, remediating defective work, testing and commissioning equipment, providing manufacturer’s warranties and performing its own warranty obligations. Reprinted courtesy of Todd R. Regan, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Adobe Opens New Office Tower and Pledges No Companywide Layoffs in 2023

April 18, 2023 — Edward Ludlow & Brody Ford - Bloomberg
Adobe Inc., breaking ranks with an industry cutting costs and laying off workers, has opened a new office tower in its home city, adding new capacity for staff and pledging no companywide job cuts in 2023. The Founders Tower is an 18-story, 1.25 million-square-foot shimmering glass addition to San Jose, California, a city Adobe has called home since the early ’90s. The software company’s fourth tower has capacity for 3,000 employee workstations, Adobe said Wednesday in a statement. Despite opening a new office with amenities, the company remains supportive of hybrid and flexible work arrangements. “We’re actually committed to continuing to grow here,” Adobe Chief People Officer Gloria Chen said in an interview with Bloomberg Television to air Wednesday. “We are committed to not having companywide layoffs.” Reprinted courtesy of Edward Ludlow, Bloomberg and Brody Ford, Bloomberg Read the court decision
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