Monthly Archives: December 2011

Construction Law in NC is two years old today!

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Construction Law in North Carolina is two years old today!  Hard to believe that another year has gone by.  When I first started this blog, I worried that I might run out of things to say.  Not only has that not proven true, but it seems the more I write, the more topics present themselves.  Part of this has to do with my loyal readers, many of whom have taken time to drop me a note with a question or comment, suggest a topic, or participate in my surveys & contests. 

If I haven’t gotten to your suggestions yet, rest assured they are in my “blog pile” and I’ll be broaching them in the next few months.  In the meantime, thanks for reading!

Photo: (c) Leo Reynolds via Creative Commons license.

How Twitter Can Benefit Your A/E/C Business (guest post)

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Today’s guest post is by Katie Frasier, a social media specialist and writer for Work Boot News, a niche site specializing in work boots and dedicated to providing relevant, entertaining content for tradesmen. She can be found tweeting the latest construction news and interacting with industry members at @workbootscom.

Many A/E/C professionals understand the importance of using social media and have been advised to join Twitter—but putting yourself in the Twitterverse can seem intimidating at first. If you find yourself wondering what the heck Tweets are and how you’re supposed to implement them into your marketing plan, here are a few tips to help you get started and make the best return on time spent tweeting.

 Getting started

  • When signing up for your twitter account, choose a username that best reflects your business name to make your brand easy to find. Encourage followers by linking to your Twitter feed on your website, blog, Facebook, LinkedIn and any other platform you use.
  • Decide on your desired audience and Twitter goals. Are you reaching out to other industry professionals? Do you want to share and discuss industry news or gain leads for new business? These decisions will impact how you tweet, how formal or informal you want to come across, and the kind of content you will share with followers. To be successful, make sure you clearly define your method and stick with it consistently.winking twitter bird

 Create a core group to interact with

  • Find competitors or users who tweet to your desired audience, and spend time observing their approach. Search who they are following—chances are you’ll find users there who you’ll want to follow, too.
  • Utilize some of the many Twitter directories such as Twellow.com to search for people by keyword, such as construction” or “contractor” to follow, and add yourself to the directory while you’re at it.
  • Depending on your goals, you may want to investigate if any of your vendors use Twitter. Create a list and add them to it; this allows you to easily follow their tweets and stay informed.

 Listen and engage

  • Spend time listening to the conversations going on before adding to it. You should strive for a balance between conversing with others, asking questions and promoting yourself. If you’re constantly trying to drive traffic to your website or begging for business, no one will listen. But if you actively participate in your specialized Twitter community, people may be more apt to follow links you tweet or offer you their business.
  • Ask questions to get people talking. Answer questions to build relationships and assert yourself as an authority in your field.
  • Retweet content from others that may be relevant to your audience. They’ll appreciate the information, and the original tweeter will appreciate the gesture. Social media is all about building relationships. Making these connections, whether you’re portraying yourself as the expert in a subject or finding camaraderie among other A/E/C professionals, opens new opportunities for your business.

Questions for Katie about the benefits of using Twitter to promote your architectural or engineering practice?  Leave a comment, below.  And, remember to “follow” me on Twitter as well, at @melissabrumback.  I look forward to “talking” to you!

Photo ©Morpurgo.nl via Creative Commons license.

Drop the Dead Weight: Fire your Worst Clients! (Tue Tip)

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Today’s Tip:  Listen to your gut.  Ever get that feeling that a potential client may be high maintenance or want everything done yesterday?   Listen to your instincts and turn them away as fast as you can.  Send them to a directory.  Send them to a rival.  Send them away from you.  Bonus if you can refer them to your worst enemy (kidding!).

The Pareto Principal is true in more ways than one:  not only do 80% of your profits come from 20% of your customers, but 80% of your complaints come from 20% of your customers.  If you can weed out that complaining/crazy/high-maintenance 20% up front, think of the aggravation you will save.

Architects (and engineers) sometimes tell me that they knew they might have issues with a particular client based on how the initial meetings & negotiations proceeded; needing the work, they took the job anyhow, only to find themselves facing the prospect of a long-drawn out lawsuit.  Don’t let this be you.

What to do if you already have the crazy client on board?  Document everything, including verbal agreements.  And cut them loose when you can safely do so.  This can be tricky-if not impossible-to do during an active project.  So in the interim, prepare as if you will be sued, because there is a good chance of it.  Remember that in a lawsuit, everything will be evidence, so your documentation during the project will be vital.

And next time- listen to your gut!

Do you have an experience working with a “crazy” client?  Did you ever not listen to your gut, only to rue the day you didn’t later on?  Share below, or send me an email.  Remember to remove identifying details, to avoid being stalked by your crazy ex-client!

 Photo: (c) jimwhimpey via Creative Commons.

Developers Rejoice Over Impact Fees Decision (news note)

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Today I’m unveiling a new column here at Construction Law in North Carolina called “News Notes”.  News notes will be postings of current news items relating to the design (and construction) community.  [This means that sometimes I must be a tad drier than my usual festive self.  Consider yourself warned.]  If you have an idea for a News Note, drop me a line.

Much to the delight of developers and realtors across the state, the North Carolina Supreme Court recently affirmed a decision which struck down local school impact fees. The fees had been assessed to fund construction of new schools in the Cary portion of the Wake County schools to help with the Town ofCary’s  rapid growth.

Impact fees are usually enacted by local boards and town councils as Adequate Public Facilities Ordinances (APFO).  In 1999, the Town of Cary began assessing school impact fees on developers in certain portions of the town which faced overcrowding.  The revenue brought in by the fees was earmarked to pay for expansion of existing school facilities.  Notably, the Town of Cary has no separate school system from the rest of Wake County, and did not have the legal authority to control the provision of school facilities within the district. 

Last month, the state Supreme Court, in a tight 3-3 tie decision (with one abstention) left the Court of Appeals decision in place, rejecting the Town’s attempt to collect school facilities fees and declaring the fees illegal.  [As an aside, my firm represented another developer who intervened in the lawsuit; however, the facts were somewhat different and we were not involved in this appeal.]

The Cary case is not the first time the issue has arisen in the state.  Currituck County once proposed a similar APFO to fund school construction during the real estate boom as out-of-state residents from Virginia crossed into North Carolina in an attempt to flee the taxes and dismal school system in Chesapeake,Virginia.

The Currituck proposal was widely criticized by both local and state homebuilder’s associations. Across North Carolina, homebuilders and realtor groups worked together to stop attempts at passing such impact fees. These organizations have run into problems as cash-strapped local governments see impact fees as one method of paying for increasingly expensive public school construction.

The theory is that developers of new homes pass the impact fees along to new home buyers by raising the price of homes or lots. Existing residents are spared the tax increases caused by a rapid influx of new residents with school-aged children. Thus, the people responsible for the increased strain on the school system – the new residents – bear the burden of the tax increase.

school

Over the past decade, Durham, Union County, and Cabarrus County have instituted similar impact fees. All three such attempts were disallowed by various courts. Thus far, virtually all attempts at imposing such fees have been struck down, although there appears to be wiggle room in the case law. For example, impact fees collected for improvements that directly run to the property (such as water or sewer lines) are typically allowed. Additionally, other municipal governments impose fees related to schools that have not (yet) been decided in the state court system, and those may be broad enough to pass judicial scrutiny.

In this case, Cary’s ordinance assessed residential developments a mitigation fee if they did not first obtain a certificate from Wake County certifying classroom availability. Over $4 million was ultimately collected since the ordinance was first passed in 1999. Cary is now faced with the prospect of returning these fees, plus over $300,000 in attorney fees awarded to the developers who filed suit.  Ouch!!!

Comments or questions?  Post in the comment section, below.

Photo (c) Ivy Dawned via Creative Commons license.

Will Green Performance Bonds Be a Surety Requirement in 2012? (law note; guest post)

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Today’s Law Note is by Guest Blogger Alex Levin for JW Surety, the largest surety bond agency in the country.  When he’s not explaining the functionalities of surety bonds, he covers a variety of topics from construction-related news to eco-friendly building tips.

Green building design and construction is an attempt to conserve natural resources, reduce energy consumption, and protect the environment through reduction of pollutants. Green buildings are constructed with renewable, managed materials and are typically designed to take full advantage of natural light and passive heating and cooling environments.

In 2006, the District of Columbia enacted a local ordinance specifically designed to promote green buildings. The Green Building Act of 2006 becomes effective in 2012 and requires all new construction projects within the District to meet Leadership in Energy and Environmental Design, or LEED, certification standards.

Developed by the U.S. Green Building Council, LEED certification promotes the design, construction and operation of green buildings. There are four levels of certification, from LEED Certified to Silver LEED certification to Gold LEED certification and, at the highest level, Platinum LEED certification.

The District of Columbia was the first city in the US to require that privately constructed buildings meet LEED standards and already contains 24 buildings that are certified as Silver LEED or higher. An additional 150 projects are LEED registered.

The Green Building Act of 2006 did several desirable things for the District of Columbia. It established high-performance building standards for all new construction in the District. It created a green building incentives program to rewarded green construction projects with an expedited documents review process. It requires that properties with green building standards be given priority when the District leases buildings. Unfortunately, the Act also had an unintended consequence. As it is currently written, no structures can be constructed in compliance with the Act.

In routine construction contracts, performance bonds limit the risk that owners incur by using a particular contractor. The contractor buys the performance bond from a surety company, and the bond is issued to the project owner. If the contractor fails to perform, the owner can draw on the bond to hire another contractor to complete the project according to the design specifications. When the contractor does complete the project according to the design specifications, the bond is released and money is returned to the contractor. Performance verification is a simple matter of construction observation and comparison with the project specifications.

With a Green Performance Bond, however, there are multiple problems. Performance certification must come from a third party, such as the US Green Building Council, who would not be a participant in the surety bond. A delay on the part of the government agency could result in missed construction deadlines. To add to this, green standards are constantly changing. A project designed to meet Silver LEED certification requirements at the time construction starts may fall short of the certification requirements that are actually in effect by the time construction is completed.

The greatest hurdle to the Act is that Green Performance Bonds simply do not exist today. Surety companies will not issue such bonds when there are no clear standards for performance verification. [Editor’s Note: For more on the “unicorn” that is the green surety bond, check out Chris Cheatham’s discussion on the illusory bond way back in 2009].

The legal ramifications of this dilemma remain unclear. Will contractors who have been awarded construction contracts scheduled for 2012 be subject to liquidated damages if they are unable to bond and fail to start construction? If surety companies do issue Green Performance Bonds, will the bond be forfeit if LEED certification standards change during construction and the project is not Silver LEED certified? Will delays in certification be held against the contractor when projects are otherwise completed? There are no definitive answers to any of these questions.

The language of the Act is being re-examined, and a public hearing is scheduled for mid December. There is no alternative plan in place should the language of the Act remain unchanged and surety companies decline to issue these specialized performance bonds.

Thoughts, comments, or questions?  Post in the comment section, below.

Photo: (c) coolshots blog via Creative Commons license.