Is Construction in Arizona Back to Normal?
September 10, 2014 —
William M. Kaufman – Construction Lawyers BlogThe Phoenix Metro area is finally pulling out of the Great Recession of 2008. Potential homebuyers are frantically looking to buy a home before interest rates rise and prices continue their ascent to normalcy. For the last several months, residential construction builders have continued to buy more land around the Valley of the Sun for new subdivisions, especially in North Phoenix and the East Valley. In fact, from January through May of 2013, in the Phoenix Metro area alone, 86 new communities have come to fruition—more than all of 2012. Nationally, single-family housing starts reached 667,000 in December 2013 according to the National Association of Home Builders tracking of single-family home starts, which is comparable to 1985 levels.
It has been well documented that since the conclusion of World War II, Arizona’s population growth fostered new home construction at a rapid, almost unmatched pace. At the 2006 construction peak, Arizona’s residential construction output climbed to 64,000, more than double the average 20,000 to 30,000 new homes that are typically constructed annually. Building rates have not come close to the 2006 numbers, but new home starts increased 70 percent since 2012.
So after six years after the real estate bubble popped, is the construction industry in Arizona finally back to normal? It depends on your definition of “normal.”
In 2009, foreclosures reached alarming proportions. However, in 2010, the engine of Arizona’s population growth, the Phoenix Metro area, began to grow again. Since 2010, Maricopa County had added 125,000 residents. There is strong demand for new housing, and appreciating housing prices has let the construction industry get back on its feet. In residential construction, supply is tight, and all cash offers are common. We all know that Wall Street played a huge role in creating the housing bubble, and eventual bust, by facilitating the use of risky, sub-prime mortgages and turning them into securities that were sold to investors, pension-funds, and the like.
Reprinted courtesy of
William M. Kaufman, Lockhart Park LP
Mr. Kaufman may be contacted at wkaufman@lockhartpark.com, and you may visit the firm's website at www.lockhartpark.com
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California Contractor License Bonds to Increase in 2016
December 02, 2015 —
Garret Murai – California Construction Law BlogThe post, which originally appeared on
The Surety Bond Insider, was written by Jon Gottschalk, a member of the SuretyBonds.com Educational Outreach team. on
SuretyBonds.com helps contractors fulfill their bonding requirements.
The Contractors State License Board (CSLB) is requiring all California contractors to purchase a $15,000 bond by January 1, 2016— a $2,500 increase from the $12,500 amount that was previously required. The additional $2,500 was previously accounted for by an additional requirement to obtain a contractor’s license. Those applying for the license had to post the $12,500 surety bond and proof of financial solvency in the amount of $2,500. Essentially, contractors were required to show that their current assets were greater than their liabilities by no less than $2,500. By increasing the bond amount to include that additional $2,500, the CSLB has removed the burden of proving financial solvency from those who wish to obtain their license.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
Fourth Circuit Holds that a Municipal Stormwater Management Assessment is a Fee and Not a Prohibited Railroad Tax
April 22, 2019 —
Anthony B. Cavender - Gravel2GavelOn February 15, the U.S. Court of Appeals for the Fourth Circuit decided Norfolk Southern Railway Co. v. City of Roanoke, et al.; the Chesapeake Bay Foundation was an Intervenor-Defendant. The Fourth Circuit held that a large stormwater management fee (stated to be $417,000.00 for the year 2017) levied by the City of Roanoke against the railroad to assist in the financing of the City’s permitted municipal stormwater management system was a permissible fee and not a discriminatory tax placed on the railroad.
The Railroad Revitalization and Regulatory Reform Act of 1976 specifically provides that states and localities may not impose any tax that discriminates against a rail carrier, 49 U.S.C. § 11501. Accordingly, the issue confronting the Fourth Circuit was whether the assessment was fee and not a tax.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
Appeals Court Affirms Civil Engineer Owes No Duty of Care to General Contractor
August 20, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to Shareholder Karen Holmes and Law Clerk Justin Reid of Balestreri Potocki & Holmes, in Atlas-Allied v. SD Community College District, the California Court of Appeal “confirmed that a civil engineer owes no duty of care to the General Contractor absent privity of contract.” The Appellate court considered Beacon Residential Community Association v. Skidmore, Owings & Merrill LLP to reach that conclusion.
Holmes and Reid commented that the Atlas-Allied decision “can assist in clarifying the extent liability is owed when no contract exists. Here, while unpublished, the 4th District clearly refused to extend a duty by the civil engineer to the general contractor on a public works project, giving counsel guidance on the application of Beacon and prior decisions on design professionals’ liability.”
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Reinsurer's Obligation to Provide Coverage Determined Under English Law
July 24, 2023 —
Tred R. Eyerly - Insurance Law HawaiiThe Second Circuit turned to English law to determine the obligations of the reinsurer. Ins. Co. of the State of Pa. v. Equitas Ins. Ltd., 2023 U.S. App. LEXIS 12461 (2nd Cir. May 22, 2023).
Insurance Company of the State of Pennsylvania (ICSOP) provided an umbrella policy to a predecessor of Dole Food Company for a policy period from October 1968 to October er 1971. Equitas then reinsured part of ICSOP's exposure for the same three-year period. English law governed the reinsurance policy.
In 2009, homeowners in Carson, California sued Dole for polluting their soil and groundwater. Dole and ICSOP settled these claims and allocated $20 million of the settlement liability to the ICSOP-Dole policy, even thought the homeowners' property damage and personal injuries continued to accrue after the ICSOP-Dole policy period ended. In doing so, the settlement followed The California law for allocation, known as the "all sums rule." This rule treated any insurer whose policy was in effect during any portion of the time during which the continuing harm occurred as jointly and severally liability for all property damages or personal injuries caused by a pollutant.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
High Court Could Alter Point-Source Discharge Definition in Taking Clean-Water Case
March 18, 2019 —
Mary B. Powers - Engineering News-RecordThe U.S. Supreme Court's decision to review lower court rulings on whether a permit is required under the federal Clean Water Act when pollutants originate from a point source but are carried to navigable waters by a non-point source such as groundwater could set some new parameters for compliance, observers say.
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Mary B. Powers, ENRENR may be contacted at
ENR.com@bnpmedia.com
Mitigating Mold Exposure in Manufacturing and Multifamily Buildings
July 31, 2024 —
Laura Champagne - Construction ExecutiveAs hurricanes season and summer storms approach, more apartment complexes, commercial and industrial properties, and public buildings are at risk of leaking and flooding. Water-saturated structures are prime breeding grounds for mold, but there are ways to prevent, detect and remove it before it becomes a serious and costly issue—for buildings and building residents alike. Being proactive limits an owner’s exposure to the liability of debilitating health effects and structural safety concerns.
Mold requires three things to grow: water, food and humidity. Water will stealthily penetrate small porous surfaces of any building material, such as drywall, plaster, wood, concrete or even fabrics. These materials serve as a food source to quickly produce more fungus. Common sources of undetected water flow include foundation problems, poorly installed windows, roof malfunctions, gutter clogs, storm damage, leaky pipes, improper drainage, HVAC issues, faulty appliances, bathroom vent issues and wet building materials. Mold loves humidity and thrives in dark, warm environments, such as attics, basements, lofts, building corners and bathrooms.
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Laura Champagne, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Giving Insurance Carrier Prompt Notice of Claim to Avoid “Untimely Notice” Defense
June 12, 2023 —
David Adelstein - Florida Construction Legal UpdatesWhen it comes to giving your insurance carrier notice of claim, I am an advocate of providing that notice as soon as possible, i.e., prompt notice. The reason is to take away the carrier’s argument to deny coverage because you, as the insured, failed to provide it with prompt notice—the “untimely notice” defense. It doesn’t matter whether it is a first party property insurance claim or third-party liability policy claim, provide notice as soon as reasonably possible to take away that “untimely notice” defense.
The “untimely notice” defense was the issue in Benson v. Privilege Underwriters Reciprocal Exchange, 48 Fla.L.Weekly D1085a (Fla. 6th DCA 2023) dealing with a first party property insurance policy. In this case, eighteen months after Hurricane Irma, the plaintiff noticed a smell and observed brown stains on walls and ceiling in his home. The plaintiff called roofing companies to inspect the damage and perform certain repairs. However, the plaintiff still noticed the smell so he called a company to test and remediate mold. The plaintiff, then, contacted his property insurer with numerous claims relative to the leaks and damage. Although there was an initial property insurance payment made, the carrier ultimately denied coverage for subsequent claims stating that “the late notice of the claim and the prior repairs to the roof substantially prejudiced its ability to complete an inspection of [plaintiff’s] property to evaluate the claim.” Benson, supra.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com