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Real Estate & Construction News Round-Up (01/18/23) – Construction Inventory, 3D Printing, and Metaverse Replicas

February 06, 2023 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
This week’s round-up dives into projections on construction inventory in the housing market, the first 3D-printed house, a replica of South Korea’s Seoul in the Metaverse, and more.

Shifts that occurred last year and at the peak of pandemic have transformed the real estate industry, with 2023 emerging as something of a barometer in the manifestations of those changes. (Tony Cantu, Mortgage Professional America (MPA))
Total new construction of homes across the country is expected to drop by 200,000 dwellings per year until 2026 as skill shortages and supply issues continue to bite. (Sowaibah Hanifie, 7 News)
Almost all economists and contractors expect some sort of an economic slowdown this year. (Sebastian Obando, Construction Dive)

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

Congratulations to BWB&O’s 2023 Mountain States Super Lawyers Rising Stars!

August 07, 2023 — Dolores Montoya - Bremer Whyte Brown & O'Meara LLP
BWB&O is excited to announce Las Vegas Partners Devin Gifford and Madeline Arcellana have been selected in the 2023 Mountain States Super Lawyers list as Rising Stars for their work in Civil Litigation. To read Super Lawyers’ digital publication, please click here. SELECTED AS RISING STARS Devin Gifford: 2023 Madeline Arcellana: 2023 Read the court decision
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Reprinted courtesy of Dolores Montoya, Bremer Whyte Brown & O'Meara LLP

Measure Of Damages for Breach of Construction Contract

October 18, 2021 — David Adelstein - Florida Construction Legal Updates
How do you determine damages for a breach of a construction contract? If you are interested in pursing a breach of a construction contract action, this is something you NEED TO KNOW! The recent Fourth District Court of Appeal’s decision in Cano, Inc. v. Judet, 46 Fla. L. Weekly D2083b (Fla. 4th DCA 201) explains:

Where a contractor breaches a construction contract, and the owner sues for breach of contract and the cost to complete, the measure of damages is the difference between the contract price and the reasonable cost to perform the contract. See Grossman Holdings Ltd. v. Hourihan, 414 So. 2d 1037, 1039-40 (Fla. 1982). In Grossman, the supreme court adopted subsection 346(1)(a) of the Restatement (First) of Contracts (1932), which it concluded was “designed to restore the injured party to the condition he would have been in if the contract had been performed.” Id. at 1039. In other words, the owner will obtain the benefit of his bargain [and this is known as benefit of the bargain damages]. But where there is a total breach of the contract as opposed to a partial breach, an injured party may elect to treat the contract as void and seek damages that will restore him to the position that he was in prior to entering into the contract or the party may seek the benefit of his bargain. See McCray v. Murray, 423 So. 2d 559, 561 (Fla. 1st DCA 1982).

In Judet, an owner entered into a fixed price contract with a contractor to repair damage from a lightning strike. The contract amount was $300,000 payable in $30,000 installments. A few months after the contractor commenced performance, the owner terminated the contractor because the owner learned the contractor had not obtained required electrical and plumbing permits. At this time, the owner had paid the contractor $90,000. The contractor recorded a $40,000 lien for an amount it claimed it was owed and filed a lawsuit to foreclose its construction lien. The owner counter-sued the contractor to recover a claimed over-payment and a disgorgement of monies for unpermitted work. The owner was NOT claiming benefit of the bargain damages, but rather, damages for the contractor’s total breach “to restore him to the position that he was in prior to entering into the contract.” Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

Chinese Brooklyn-to-Los Angeles Plans Surge: Real Estate

April 01, 2014 — Nadja Brandt and John Gittelsohn – Bloomberg
It took just one 15-minute phone call in July to persuade Ifei Chang to join Shanghai-based developer Greenland Holding Group Co. and lead a U.S. expansion. Within three months, she was running $6 billion of projects as part of a record push by Chinese investors into American property. Greenland reached a preliminary agreement in October to buy a 70 percent stake in the $5 billion Atlantic Yards development in Brooklyn, New York. That followed a July deal to acquire a $1 billion residential-and-entertainment project in downtown Los Angeles. Chang, who took charge of that site upon arriving in the U.S., is now on the hunt for more investments. “In China, you climb a ladder where everything is floating and moving so fast,” Chang, 49, said in an interview at her sparsely furnished 46th-floor L.A. office overlooking the empty lot where the Metropolis project will be built. “We come from a country of 1.4 billion people and a lot of economic growth. This kind of project and investment speed is very normal in China. That’s why we are so confident we will deliver this project.” Greenland, like other Chinese companies, is committing to a growing number of multibillion-dollar developments outside of its home market. Chinese investments in U.S. commercial properties jumped almost 10-fold last year from 2012, with Manhattan the biggest area for purchases, followed by other New York City boroughs and Los Angeles, according to research firm Real Capital Analytics Inc. Ms. Brandt may be contacted at nbrandt@bloomberg.net; Mr. Gittelsohn may be contacted at johngitt@bloomberg.net Read the court decision
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Reprinted courtesy of Nadja Brandt and John Gittelsohn, Bloomberg

California’s Prompt Payment Laws: Just Because an Owner Has Changed Course Doesn’t Mean It’s Changed Course on Previous Payments

April 20, 2016 — Garret Murai – California Construction Law Blog
We’ve written before about California’s prompt payment laws which are designed to help contractors get paid in a timely and orderly fashion, which is always nice, right? California’s prompt payment laws require that project owners pay their direct contractors, who are in turn required to pay their subcontractors who are in turn required to pay their sub-subcontractors and so on within certain statutorily set deadlines, or be subject to prompt payment penalties nearly as high as the interest you pay on your credit cards. Read the court decision
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Reprinted courtesy of Garret Murai, Wendel Rosen Black & Dean LLP
Mr. Murai may be contacted at gmurai@wendel.com

Contractors: Beware the Subordination Clause

October 15, 2014 — Garret Murai – California Construction Law Blog
A bit of mechanics lien trivia. What is the only state in the United States in which mechanics liens are a constitutional right? If you answered California, ding, ding. Article XIV of the California Constitution states:

Mechanics, persons furnishing materials, artisans, and laborers of every class, shall have a lien upon the property upon which they have bestowed labor or furnished material for the value of such labor done and materials furnished; and the Legislature shall provide, by law, for the speedy and efficient enforcement of such liens.

But how does that constitutional right stand up against contractual rights? Not so well it seems. Read the court decision
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Reprinted courtesy of Garret Murai, Kronick Moskovitz Tiedemann & Girard
Mr. Murai may be contacted at gmurai@kmtg.com

Texas Windstorm Insurance Agency Under Scrutiny

April 05, 2011 — Beverley BevenFlorez CDJ STAFF

Representative Larry Taylor has introduced a bill in the Texas Legislature (HB 2818) that would further regulate the Texas Windstorm Insurance Agency (TWIA). According to Taylor, “In order to be adequately prepared for future hurricane seasons, it is imperative that TWIA be operating at maximum efficiency, that the Reserve Trust Fund be solvent and that the agency have adequate management measures in place to protect consumers and ensure that claims are paid in a timely manner. House Bill 2818 is an important step in the right direction toward restoring public confidence in TWIA.”

HB 2818 includes measures that would create an expert panel that would advise the commissioner on how to evaluate loss from the storm, and a greater transparency of TWIA Board meetings and actions.

In addition, the Texas Department of Insurance (TDI) has placed TWIA on Administrative Oversight. According to TDI, “While under Administrative Oversight, the Department may require its prior review and approval of executive decisions, certain expenditures, and other transactions. The insurer is required to fully cooperate with the Department and provide complete and timely disclosure of all information responsive to Department requests.”

Read the full story (Rep. Taylor’s Press Release)...

Read the full story (Texas Department of Insurance’s Press Release)...

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Construction Defect or Just Punch List?

December 11, 2013 — CDJ STAFF
A couple in Dickinson, North Dakota have put big, green “buyer beware” signs on their home. They’re not planning on selling, but just trying to warn prospective neighbors of the problems they’ve had since moving into their new home. Andrea Thermes said her problems included leaking windows and uneven floors. “I absolutely love my house,” she said. “If we didn’t have the issues, I would be the happiest girl in the world.” One problem was a leaking picture window in her living room. The builder replaced it, but the first window that arrived was the wrong size. The new home is still under a warranty and the builder has been fixing issues as they arise. “They are upset with some of the problems they have had,” said William Henry, president of B-Dev, the builder of the home. Since Ms. Thermes’s window wasn’t repaired in time for Thanksgiving, Mr. Henry sent wine and beer to her home. “Not that that makes up for not having their window, but we’re trying to make this work and trying to appease them,” he said. But Mr. Henry said that some of the problems “are not really material defects,” characterizing them as “punch-list and warranty items.” Read the court decision
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