Cambridge Massachusetts Building Expert Directory

Subcontract Should Flow Down Delay Caused by Subcontractors

December 21, 2020 — David Adelstein - Florida Construction Legal Updates
A general contractor’s subcontract with its subcontractor should include a provision that entitles it to flow down liquidated damages assessed by the owner stemming from delays caused by the subcontractor. Such a provision does not mean the general contractor does not have to prove delays caused by the subcontractor or can arbitrarily allocate the amount or days it claims the subcontractor is liable. The general contractor still will need to reasonably establish the delays the subcontractor caused the critical path of the schedule, i.e., delayed the job. In addition to the right to flow down liquidated damages, the subcontract should also entitle the general contractor to recover its actual extended general conditions caused by the subcontractor’s delays (regardless of whether the owner assesses liquidated damages). The objective is that if the subcontractor delays the job, the subcontractor is liable for liquidated damages the general contractor is liable to the owner for in addition to the general contractor’s own delay damages. This is an important subcontractual provision so that the risk of delay caused by subcontractors is clearly flowed down to them in the subcontract. In a 1987 case, Hall Construction Co., Inc. v. Beynon, 507 So.2d 1225 (Fla. 5th DCA 1987), the subcontract at-issue contained language that stated, “The parties hereto agree that a supplier who delays performance beyond the time agreed upon in this Purchase Order shall have caused [general contractor] liquidated damages in the amount required of [general contractor] by their contract per day for each day such delay continues which sum the supplier hereby agrees to pay.” 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

Providing Your Insurer Prompt Notice

May 20, 2024 — David Adelstein - Florida Construction Legal Updates
Sometimes, when it comes to insurance, you may hear the argument that you breached your insurance policy by failing to provide your insurer with prompt notice as the insurance policy requires. Well, this is not such an absolute issue. With that said, you should absolutely provide your insurer with prompt notice of a claim or loss. No legitimate reason not to. But, if you don’t, it is not an absolute get out of jail free card for your insurer, but it does give them a good argument, which you don’t really want to deal with. In Gulfpoint Construction Co., Inc. v. Westfield Ins. Co., 2024 WL 1759228 (11th Cir. 2024), an insured appealed a trial court’s ruling that found it did not provide prompt notice to its property insurer as the policy required. In this case, notice was provided two years after a loss from a hurricane. The insurer denied coverage and, in doing so, relied on the insured’s failure to provide prompt notice. Although the trial court agreed, the appellate court found this was a genuine issue of material fact. 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

Housing Bill Threatened by Rift on Help for Disadvantaged

April 09, 2014 — Cheyenne Hopkins and Clea Benson - Bloomberg
Efforts to overhaul the U.S. housing-finance system could hinge on how far Congress is willing to go to ensure that young, low-income and minority homebuyers can get mortgages. A bipartisan bill drafted by Senate Banking Committee leaders Tim Johnson and Mike Crapo relies on incentives to persuade financiers to lend to groups with higher risk profiles. Consumer and civil-rights organizations are pushing instead for a mandate that those groups must be served, a concept that has become a political flash point since the housing bubble burst. Key Democrats on the banking panel whose support is needed to pass the measure may vote against a bill that doesn’t include a mandate, especially as mortgage borrowing has dropped among blacks, Latinos and first-time buyers. Ms. Hopkins may be contacted at chopkins19@bloomberg.net; Ms. Benson may be contacted at cbenson20@bloomberg.net Read the court decision
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Reprinted courtesy of Cheyenne Hopkins and Clea Benson, Bloomberg

4 Lessons Contractors Can Learn From The COVID-19 Crisis

May 25, 2020 — Patrick Hogan - Handle.com
At the start of 2020, the industry outlook in construction was positive. Many contractors were optimistic about what the year had in store for construction businesses in terms of profit, expansion of operations, and even payment issues. That was until the COVID-19 pandemic put a wrench in everyone’s business plans. There’s no question about how huge the impact of the novel coronavirus crisis is on business operations. With the federal and state governments implementing strict measures to slow down the spread of COVID-19, construction businesses are experiencing significant delays and disruptions in their operations. Because of the lockdowns and stay-at-home orders, many construction projects are forced to postpone operations or, worse, cancel them altogether. Nevertheless, there are lessons in the COVID-19 pandemic that contractors can learn. Here are some of them. 1. Contractors need to be proactive in meeting preliminary notice requirements Cash is tight in times of crisis. As the economy comes to a standstill, construction businesses will need to deal with decreasing profits. They may even have to dip into their own cash reserves to cover fixed expenses and their employees’ salaries. In times like this, it is crucial that contractors perform due diligence in protecting their right to get paid. The first step in doing so is to prepare preliminary notices. These notices are an important step in the mechanics lien process and without them, chances contractors will not be able to recover the unpaid compensation for the materials they furnished and services they rendered. 2. Force majeure provisions are crucial parts of a contract The novel coronavirus pandemic has highlighted the importance of force majeure provisions in construction contracts. Before the COVID-19 crisis hit business operations, force majeure provisions were typically considered as simple boilerplate clauses. This means they were just there as a standard part of contracts. However, the same force majeure clauses, as well as impossibility of performance provisions, have become crucial in the current crisis. As many construction businesses experience difficulties with their operations, they may not be able to fulfill their contractual responsibilities. The said clauses can give contractors a much-needed reprieve. As the current crisis continues, contractors should review contracts as these provisions can give them more time to finish the job. And in the hopefully near future when the crisis ends, business owners should review the contract creation process and ensure that these clauses included in contracts will be able to address the impact of situations similar to COVID-19. 3. Having solid internal communication is crucial There’s a lot of uncertainty with the COVID-19 situation. With work operations temporarily stopping, the circumstances can be quite stressful for employees. There will be doubts and fears within your workforce on whether work will be back to normal as soon as possible or not. Keeping your workforce well-informed and trusting of your organization is crucial, especially in this time of uncertainty. That is why it is paramount that you have a solid internal communication infrastructure to disseminate information about the current work situation and the next steps that the business will take. In addition, only through proper employee communication can the implementation of social distancing and hygiene measures be effective. 4. Contractors can benefit from flexible work arrangements As the coronavirus crisis has made it necessary for everyone to stay at home, construction businesses should look for ways to continue operations. Expanded work arrangements such as work-from-home setups may just be the solution. Of course, most of the physical work that is needed to be done on-site will be impossible to do at home, but office-based functions such as sales, client relations, design, and administrative roles can still continue. This can even have additional benefits to productivity and health. And when the crisis is over, business owners should consider incorporating these work arrangements into their operations permanently. The COVID-19 crisis is not showing any sign of stopping soon, and even when it ends, it will take quite a long time before we can be back to business as usual. As the crisis continues, however, business owners should take the situation as a learning experience. Once the COVID-19 crisis is over, it will take a long time for things to go back to normal. In fact, things may not end up going back to the way they were before and businesses will need to adapt to the new normal. However the situation evolves, business owners should take this opportunity to learn new things and maintain resilience in trying times. About the Author: Patrick Hogan is the CEO of Handle.com, where they build software that helps contractors, subcontractors, and material suppliers with late payments. Handle.com also provides funding for construction businesses in the form of invoice factoring, material supply trade credit, and mechanics lien purchasing. Read the court decision
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White House Plan Would Break Up Corps Civil-Works Functions

July 18, 2018 — Tom Ichniowski - Engineering News-Record
As part of a sweeping federal government reorganization proposal, the White House has recommended shifting the Army Corps of Engineers’ civil-works operation to the Dept. of Transportation and the Dept. of the Interior. Read the court decision
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Reprinted courtesy of Tom Ichniowski, ENR
Mr. Ichniowski may be contacted at ichniowskit@enr.com

The Three L’s of Real Estate Have New, Urgent Meaning

April 15, 2024 — Mark Gongloff - Bloomberg
What will it take to make Americans stop rushing headlong into climate peril? Cheaper housing in safer places, for one thing. But maybe big red flags on property listings will help, too. Redfin Corp., the digital real estate company, last week added air-quality data to its listings as part of its “climate risks” feature, which aims to warn homebuyers of the chances their dream home could succumb to a global-warming nightmare. Using data from the climate research firm First Street Foundation, Redfin estimates a property’s current and predicted risk levels for flooding, wildfires, extreme heat, high winds — and now days when the Environmental Protection Agency’s Air Quality Index tops 100, a category known as “unhealthy for sensitive groups.” Read the court decision
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Reprinted courtesy of Mark Gongloff, Bloomberg

Expect the Unexpected (Your Design Contracts in a Post-COVID World)

April 18, 2023 — Melissa Dewey Brumback - Construction Law in North Carolina
Have you adapted your post-COVID practice to better plan for the “unexpected” ? In particular, have you looked at–and revised– your professional services contracts to give yourself a little more breathing room for unaccounted issues that may arise? If not, no time like the present. Don’t like that saying? How about ” a stitch in time saves nine?” No? Still nothing? What about a picture of something so completely unexpected it shocks you– say, a fireman commuting home, in fire-fighting regalia, on a tricycle? Okay, here you go… Now that I have your attention– you should make it a practice to regularly review and update your professional services agreements, and you should consider issues such as:

Does your agreement provide for extra compensation if you have to spend more time or a longer period providing construction administration services for material delays or labor shortages? If not, it should.
Does your agreement have a well-written “act of God” provision– one that includes pandemic/epidemics as part of the “act of God” conditions in which a term may become void? If not, add it now!

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Reprinted courtesy of Melissa Dewey Brumback, Ragsdale Liggett
Ms. Brumback may be contacted at mbrumback@rl-law.com

Falling Tree Causing Three Injuries/Deaths Is One Occurrence

September 28, 2017 — Tred R. Eyerly - Insurance Law Hawaii
In a decision by Judge Sutton, the Sixth Circuit affirmed the district court's ruling that a falling tree causing one injury and two deaths was the result of a single occurrence. Evanston Ins. Co. v. Housing Auth. of Somerset, 2017 U.S. App. LEXIS 15199 (6th Cir. Aug. 15, 2017). A large tree fell on cousins Kaitlyn Griffin and Joshua Thacker. Kaitlyn died within minutes. She was pregnant at the time. Doctors delivered her baby, but the baby died shortly thereafter. Joshua survived but suffered serious injury. In December 2013, a state court jury found the Housing Authority liable for the accident and awarded $3.7 million in damages. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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