Construction Lien Waiver Provisions Contractors Should Be Using
January 06, 2020 —
Jason Lambert - Construction ExecutiveIt is common in construction for a subcontractor or material supplier of any tier to be required to provide a lien waiver when receiving payment. But not all lien waivers are created equal. While at a minimum, a lien waiver, by definition, needs to include a release of liens, it can also include many other terms that can tie up loose ends or resolve potential problems before they begin.
Additional Releases
A typical lien release is going to release any liens and right to claim liens on the subject property. But a lien waiver can also include releases of any claims against surety bonds, other statutory rights or claims, and at its broadest, claims against the paying party. One example of a provision that could help accomplish this is a release of “any right arising from a payment bond that complies with a state or federal statute, any common law payment bond right, any claim for payment, and any rights under any similar ordinance, rule, or statute related to claim or payment rights.” Broad release language can also be used to effectively preclude any claims arising prior to the date of the release.
Payment Representations and Warranties
A typical lien release has no representations or warranties about payment to subcontractors or material suppliers of a lower tier. But contractors can include language requiring the company receiving payment to represent and warrant that all subcontractors of a lower tier have been paid or will be paid within a certain timeframe using the funds provided and that these are material representations and inducements into providing payment. On a related note, if the contract requires subcontractors to provide lien releases from lower tier subcontractors in addition to their own release when seeking payment, contractors can require the sub-subcontractor releases to include representations that they have been paid by the subcontractor to try and tie up payment loose ends all around.
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Jason Lambert, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Mr. Lambert may be contacted at
jason.lambert@nelsonmullins.com
Florida Extends Filing Time for Claims Subject to the Statute of Repose
June 13, 2018 —
William L. Doerler - The Subrogation StrategistUnder Florida’s construction-related statute of repose, Fla. Stat. § 95.11, actions based on the design, planning or construction of an improvement to real property are barred if not commenced within 10 years after the later of several possible dates, including the date of actual possession by the owner and the date of the issuance of a certificate of occupancy. The Florida Legislature recently amended the statute to extend the time within which defendants subject to a suit filed close to the end of the 10-year period can file claims. Under the revised law, a defendant can file “counterclaims, cross-claims and third-party claims up to 1 year after the pleading to which such claims relate is served.” Regardless of when the cause of action at issue accrued, the law applies to actions commenced on or after July 1, 2018, except that any action that would not have been barred under Fla. Stat. § 95.11(3)(c) prior to the amendment may be commenced before July 1, 2019.
The revised law provides relief to defendants because, under the prior law, they had to file claims against other potentially responsible third parties before the expiration of the statute of repose. Under the new law, defendants can bring third parties into the action after the expiration of the 10-year statute of repose period.
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William L. Doerler, White and Williams LLPMr. Doerler may be contacted at
doerlerw@whiteandwilliams.com
Persimmon Offers to Fix Risky Homes as Cladding Crisis Grows
February 22, 2021 —
Olivia Konotey-Ahulu - BloombergPersimmon Plc, the U.K.’s biggest homebuilder, has offered to pay for work on potentially unsafe buildings in the wake of the cladding scandal that arose from London’s Grenfell Tower fire.
The firm has made a provision of 75 million pounds ($104 million) in its 2020 results for any necessary repair work on 26 buildings it developed that may be affected by the issue, it said in a statement Wednesday. It no longer owns the properties and said it would provide support where owners failed to accept their legal responsibilities.
“The concern around now banned cladding is affecting many thousands of homeowners who live in high-rise buildings right across the country,” Chairman Roger Devlin said in the statement. “We believe we have a clear duty to act to address this issue.”
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Olivia Konotey-Ahulu, Bloomberg
The Problem with One Year Warranties
June 10, 2015 —
Craig Martin – Construction Contractor AdvisorContractors often ask if they should include a one year warranty in their subcontracts. I tell them that they can, but it may be more effective to include a one-year correction period. If a contractor does include a warranty in the contract, it may actually extend the time in which a contractor may be sued. I recommend instead a Correction Period.
Typical Construction Warranties
Form construction contracts, like the AIA forms, often times contain warranty language. The AIA A201, General Conditions, contains a warranty section that covers materials, but it does not address how long the work is warranted:
“3.5 WARRANTY
The Contractor warrants to the Owner and Architect that materials and equipment furnished under the Contract will be of good quality and new unless the Contract Documents require or permit otherwise. The Contractor further warrants that the Work will conform to the requirements of the Contract Documents and will be free from defects, except for those inherent in the quality of the Work the Contract Documents require or permit.”
Instead, the AIA A201, section 13.7, limits the time by which claims must be brought to 10 years or the applicable statute of limitations.
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Craig Martin, Lamson, Dugan and Murray, LLPMr. Martin may be contacted at
cmartin@ldmlaw.com
Fewer NYC Construction Deaths as Safety Law Awaits Governor's Signature
July 25, 2022 —
Richard Korman - Engineering News-RecordThe hoped-for progress in New York City construction safety is coming too late for laborer Jose Fortina Armenta Hernandez. At 8:37 a.m. on May 27, 2021, while jackhammering a roof section on a Brooklyn building, the section on which Armenta stood gave way and he fell 60 ft. When last year his family sent his body from New York City to Mexico to be buried, they used a GoFundMe page to raise money for the laborer's funeral.
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Richard Korman, Engineering News-Record
Mr. Korman may be contacted at kormanr@enr.com
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Thieves Stole Backhoe for Use in Bank Heist
July 31, 2013 —
CDJ STAFFYou can do a lot with a backhoe, but maybe not use it for bank robbery. The New York Daily News wasn’t clear on how many were involved, but described them as “a brazen crew of bandits.” They stole a backhoe from a construction site and used it to pry an ATM from a bank. When they couldn’t get the ATM open, they jumped into a black SUV and left the scene.
The bandits were engaging in a sort of ATM spree. They did manage to open two ATMs, each holding more than $7,000 in cash. They were less successful at their use of heavy machinery. In an earlier heist, they used a tow truck to try to remove an ATM, but the chain snapped and the bank’s alarm rang. The Daily News quotes one former tow truck driver who said that it was “stupid to use a tow truck.” In her experience, “those chains snap at any time.”
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Insureds Survive Motion to Dismiss Civil Authority Claim
September 29, 2021 —
Tred R. Eyerly - Insurance Law HawaiiAfter suffering business losses due to a hurricane, the insured's Civil Authority claim survived the insurer's motion to dismiss. Pathology Lab. v. Mt. Hawley Ins. Co., 2021 U.S. Dist. LEXIS 145129 (W.D. La. Aug. 3, 2021).
Hurricane Laura devastated Lake Charles, Louisiana causing severe damage to the insured property as well as other properties within a mile of the insured property. All seven electrical transmission line corridors feeding Lake Charles were catastrophically damaged causing an extensive power outage. Government shutdown Orders prohibited the insureds' access to the Lab. The Orders were issued by the respective civil authorities both in anticipation of and as a result of damage and dangerous physical conditions expected from and actually resulting from Hurricane Laura and the continuation thereof. When the hurricane arrived, all businesses that were not essential to the recovery were ordered closed until electricity, water and sewer services were restored. As a result, the Lab was closed from August 27, 2020 toSeptember 8, 2020.
The Lab sued for business income under the policy's Civil Authority provisions. Mt. Hawley moved to dismiss. Mt. Hawley argued that the Orders did not by their explicit terms close the Lab's business because closure was entirely dependent on the conditions of the described premises itself and whether it was safe to occupy. Mt. Hawley further argued that the mandatory Evacuation Order was issued in anticipation of property damage and therefore did not trigger coverage under the Civil Authority provision.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Building Permits Hit Five-Year High
October 01, 2013 —
CDJ STAFFThe New York Times reports that building permits in August were at their highest since May 2008, even despite a recent rise in mortgage rates. Construction starts on single-family homes were at their highest in six months as well. On the other hand, construction starts for condominiums and apartments fell slightly more than 11 percent.
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