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Real Estate & Construction News Roundup (11/8/23) – New Handling of Homelessness, Decline in Investments into ESG Funds, and Shrinking of a Homebuyer’s Dollar

December 11, 2023 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
Our latest roundup includes two large flood control projects in New Jersey, how residential REITs could benefit from higher interest rates, how the downfall of WeWork could cause expansive collateral damage, and more!

• The Federal Reserve said the possibility of large losses in the $24 trillion U.S. commercial real estate market poses a top risk to financial stability. (Jim Tyson, CFO Dive)
• According to proptech firm MRI Software, apartment leasing patterns are “reverting to pre-pandemic patterns and becoming more predictable.” (Leslie Shaver, Multifamily Dive)
• Los Angeles has developed a new way to handle homelessness—real estate agents for those without a home. (Jennifer Ludden, NPR)

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

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Monumental Museum Makeover Comes In For Landing

May 28, 2024 — Jim Parsons - Engineering News-Record
After more than 40 years of chronicling the nation’s storied exploration of the sky and heavens, the Smithsonian Institution’s National Air and Space Museum in Washington, D.C., was, in a word, tired. Reprinted courtesy of Jim Parsons, Engineering News-Record ENR may be contacted at enr@enr.com Read the full story... Read the court decision
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Unit Owners Have No Standing to Sue under Condominium Association’s Policy

February 10, 2012 — Tred R. Eyerly - Insurance Law Hawaii

If a condominium owner suffers damage caused by a leak from another unit, may it sue the insurer for the Association of Apartment Owner (AOAO) for coverage? The federal district court for Hawaii said "no" in a decision by Judge Mollway. See Peters v. Lexington Ins. Co., 2011 U.S. Dist. LEXIS 148734 (D. Haw. December 27, 2011).



Two cases were consolidated. In each case, Plaintiffs owned condominium units at the Watercrest Resort on Molokai. Water leaking from another unit damaged Plaintiffs’ units.



Watercrest Resort was insured by Lexington pursuant to a policy maintained by the AOAO. Plaintiffs filed claims with Lexington. Lexington hired an adjustor.



Unhappy with the adjustment of their claims, Plaintiffs sued Lexington and the adjustor.

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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com

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WARN Act Exceptions in Response to COVID-19

April 13, 2020 — Yvette Davis & Kyle R. DiNicola - Haight Brown & Bonesteel
California’s WARN Act requires employers of certain covered establishments to provide 60 days written notice of any mass layoff, relocation, or termination. This notice is required to be given to employees and the Employment Development Department. An employer’s failure to comply with this requirement can result in being held liable for back-pay and value of the cost of any benefits to which the affected employee(s) may have been entitled for up to a maximum of 60 days. Due to the COVID-19 crisis and emergency circumstances in which many employers now find themselves, the Governor of California has issued Executive Order N-31-20, which temporarily suspends the 60-days advance notice requirement and the provisions that impose liability and penalties on an employer for the duration of the COVID-19 emergency. Reprinted courtesy of Yvette Davis, Haight Brown & Bonesteel and Kyle R. DiNicola, Haight Brown & Bonesteel Ms. Davis may be contacted at ydavis@hbblaw.com Mr. DiNicola may be contacted at kdinicola@hbblaw.com Read the court decision
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Can Your Small Business Afford to Risk the Imminent Threat of a Cyber Incident?

November 28, 2018 — Jeffrey M. Dennis & Heather H. Whitehead – Newmeyer & Dillion LLP
Cybersecurity incidents are occurring on a daily basis and at an increasingly growing rate. Yet, many small businesses still have not obtained adequate (or any) cyber insurance to address these risks and the costly impacts to the business that will result. In a recent study completed by the Insurance Information Institute1, only about a third of all small businesses polled responded that they have cyber insurance in place, with 70% of respondents replying that they have no plans to purchase a cyber insurance policy in the next 12 months. Most of the businesses indicated that they do not believe they have any need for cyber insurance, yet almost half of those same companies stated they are unprepared to handle cyber threats. A main reason for not purchasing cyber insurance was a lack of understanding about this type of insurance and coverages available. The Risks for Small Businesses These statistics are alarming considering that the average cost of a cyber-related loss for a small business has increased 250% in the past two years, and now totals $188,400. In determining whether insurance coverage should be purchased, companies typically assess the perceived risks to the company, the likelihood of such risks occurring, as well as any costs or expenses that may result. For example, most companies regularly obtain a property policy to cover a fire or other casualty that may damage its business location even though such an event is unlikely or unexpected. Yet, cyber incidents are just as likely, if not more likely to occur, and the impacts to a company in the event of an incident are far worse. Many incidents result in a complete suspension of the daily operations of the company for several days or longer. In addition to financial loss, companies may face the following as a result of a cyber incident:

• Theft, breach or loss of information and data;
• Damage to the company's reputation, brand or image; and
• Regulatory, governance and legal issues.
• How Cyber Insurance can Help

Cyber insurance policies can be obtained to address the losses related to a data breach and may include costs for investigating a breach, notifying people affected by a breach of personally identifiable information, managing the potential damage to reputation and other crisis-management expenses, recovering lost or corrupted data, and related legal expenses. More importantly, well-drafted policies can afford coverage for business interruption losses; i.e. those expenses and lost revenue resulting from a breached system and a company's inability to continue its usual operations. Coverage may also be obtained for "cyber extortion", which covers costs resulting from an extortion event such as ransomware or fraudulent wire transfers. It is important to keep in mind that cyber insurance is only one component to consider when developing and implementing an overall risk management strategy to prevent cyber incidents. However, taking into account the exposure to a company if and when a cyber incident occurs, it is highly advisable to have this coverage in place. 1Insurance Information Institute, "Small business, big risk: Lack of cyber insurance is a serious threat," October 2018. Jeff Dennis is the head of the firm's Privacy & Data Security practice. Jeff works with the firm's clients on cyber-related issues, including contractual and insurance opportunities to lessen their risk. For more information on how Jeff can help, contact him at jeff.dennis@ndlf.com. Heather Whitehead is a Partner in the firm's Privacy & Data Security practice. Heather also practices insurance coverage matters for commercial, retail, industrial, mixed-use, multi-family and residential projects. For more information on how Heather can help, contact her at heather.whitehead@ndlf.com. Read the court decision
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Social Engineering Scams Are On the Rise – Do I Have Insurance Coverage for That?

June 01, 2020 — Jeffrey Dennis & Heather Whitehead - Newmeyer Dillion
Cyber attackers all know that the majority of organizations are currently working from home due to the ongoing COVID-19 (commonly referred to as the Coronavirus) pandemic. And, as would be expected, social engineering scams are on the rise. Nonetheless, there may be limitations in your cyber liability insurance policy for these types of claims. It is advisable to take the initiative to review such insurance policies in detail for coverage considerations prior to the occurrence of any cyber incident. And, of course, protect your business from attacks by engaging in precautious cyber safety efforts. What Is Social Engineering? Social engineering refers to various means to manipulate individuals in the online environment so that they divulge sensitive, personal information, such as banking information, which may include account numbers and passwords. This can also take the form of receiving a request to transfer funds to what the victim believes is another employee, trusted financial information or other party with whom the person has a business relationship with. Unfortunately, however, those funds ultimately are received by the engineer of the cyber attack. Reprinted courtesy of Jeffrey M. Dennis, Newmeyer Dillion and Heather Whitehead, Newmeyer Dillion Mr. Dennis may be contacted at jeff.dennis@ndlf.com Ms. Whitehead may be contacted at heather.whitehead@ndlf.com Read the court decision
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Subcontractors Essential to Home Building Industry

February 14, 2014 — Beverley BevenFlorez-CDJ STAFF
The National Association of Home Builders (NAHB), Eye on Housing reports that subcontractors are essential to the home building industry—a point that is often overlooked by those outside of the industry. According to the NAHB, “71 percent of those employed in the home building industry are subcontractors.” The average number of subcontractors used in single-family detached homes in 2012 was twenty-five, however larger builders used more subcontractors: “On average, builders who built more than 25 units used 32 subcontractors during 2012, compared to 23 for builders who built less than 25 units.” Read the court decision
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Is Privity of Contract with the Owner a Requirement of a Valid Mechanic’s Lien? Not for GC’s

January 04, 2021 — Christopher G. Hill - Construction Law Musings
As any reader of this construction law blog knows, mechanic’s liens make up much of the discussion here at Construction Law Musings. A recent case out of Fairfax County, Virginia examined the question of whether contractual privity between the general contractor and owner of the property at issue is necessary. As a reminder, in most situations, for a contract claim to be made, the claimant has to have a direct contract (privity) with the entity it sues. Further, for a subcontractor to have a valid mechanic’s lien it would have to have privity with the general contractor or with the Owner. The Fairfax case, The Barber of Seville, Inc. v. Bironco, Inc., examined the question of whether contractual privity is necessary between the general contractor and the Owner. In Bironco, the claimant, Bironco, performed certain improvements for a barbershop pursuant to a contract executed by the two owners of the Plaintiff. We wouldn’t have the case here at Musings if Bironco had been paid in full. Bironco then recorded a lien against the leasehold interest of The Barber of Seville, Inc., the entity holding the lease. The Plaintiff filed an action seeking to have the lien declared invalid because Brionco had privity of contract with the individuals that executed the contract, but not directly with the corporate entity. Read the court decision
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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

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