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Construction Law Authority / Posts tagged "contractors"

Inside The Nation’s Varying Contractor Licensing Rules — And How They Impact Business

This article originally appeared in Construction Dive Magazine, May, 2017, Reprinted with Permission. In an effort to safeguard their residents against fraud and the chaos that can result from unprofessional behavior or lack of experience and knowledge, most states have some kind licensing procedure in place for professions like lawyers, physicians and real estate agents. However, when it comes to construction contractors — who practice in an industry that is full of life and death scenarios — there is little state-to-state licensing uniformity. How do these regulations vary across the U.S., and is there any indication that a strict regulatory scheme results in a higher level of professionalism and quality among contractors? How licensing rules vary "We see both extremes where it's extremely difficult to get a license, and then on the opposite side where anyone with a hammer and pickup truck can be a contractor," said Chuck Taylor, director of operations for Chicago- area...

What Developers and Contractors Need to Know About Destructive Testing

  Chapter 558 Fla. Stats. is Florida’s pre-suit notice and right to cure procedure, which applies before property owners may assert a claim against a developer, contractor, subcontractor or design professional for construction and design defects. It expressly provides for “destructive testing” of the defective areas of the property via written request and mutual agreement.  Destructive testing may be performed to refute the existence of defects. Examples of destructive testing may include such things as removing drywall, stucco, or other components to view the hidden conditions beneath it. At a minimum, a developer or contractor’s request for destructive testing should describe: (i) who is performing the testing, (ii) the anticipated testing methods and locations, (iii) the estimated anticipated damage and repairs to or restoration of the property resulting from the testing, (iv) the estimated amount of time necessary for the testing and to complete any repairs or restoration, and (v) who will bear...

Construction Contracting for the Owner – Scope of Work

It is an easy enough question, what is the scope of your project? For example it may be simply to reroof the building. However, what materials should be used, what will be done with damaged plywood decking, does the existing roof need to be pulled off or can it be roofed over? These are all basic questions that need to be addressed from what appeared to be a simple question. As the owner, the scope is very important for purposes of knowing what your expectations are and that the contractor understands those expectations.  The scope will also impact the price. In our reroof example, what is the contractor doing with the air conditioner stands on the flat roof? Are they being removed and put back, or the being removed and new ones put in? Can the work be done with the air conditioning units in place?  Whether a reroof or any construction work...

Construction Contracting for the Owner – Parties to a Construction Project

  This is part 1 of our series on Construction Contracting for the owner.  Once you have decided to begin a construction project, whether this project is a reroof, concrete restoration, painting, repaving or anything else, there are generally 3 main groups involved. The first of these groups is the owner. The owner is the person or entity on whose behalf the work is being done. The types of owners range from an individual, development entity, hotel, condominium association, homeowner's association or a governmental agency.  Although the owner may be using a bank to finance the construction, the owner is the party generally responsible for ensuring payment to the other 2 groups. The second group is generally the design professionals. This group consists of the engineer or architect hired by the owner to prepare any drawings or specifications for the work to be done.  In larger projects, the owner may contract with an Architect who then hires various subconsultants (geotechnical engineer, structural...

Lender Liability to Contractors Extended by Court

A recent Florida appellate court decision extended a lender’s liability to contractors for failure to fully fund a construction loan on a project. §713.3471 of the Florida Statutes makes construction lenders liable to contractors and lienors who served a notice to owner if the lender ceases funding a construction loan without first notifying the contractor and lienors. In that situation, the lender could be liable for the actual construction costs incurred plus 15% for overhead and profit from the date on which the notice should have been provided until the date it actually is provided, if at all.

In an opinion not yet reported, Whitehead v. Tyndall Federal Credit Union, the court liberally interpreted this statute to make a lender liable to the original contractor when the lender failed to pay that contractor, but instead paid a replacement contractor. The lender denied liability, saying it fully funded the construction loan as required by the statute, even though the funding went to a subsequent contractor. The court held that, since the construction loan funds didn’t all go to the original contractor, the lender was required to provide statutory notice to the contractor that loan proceeds would no longer be funded to that contractor, even though they would later be paid to the subsequent contractor. The court reversed summary judgment in the lender’s favor, paving the way to the lender’s potential liability to the contractor for actual costs plus 15% overhead and profit.

Therefore, in this environment where non-payment of contractors has proliferated, consideration should be given to whether claims against the construction lender are available