Tag Archives: construction

Learn about State Construction issues at upcoming conference (Tue Tip)

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Registration is now open for the 30th annual State Construction Conference.  For those who are unfamiliar with the conference, the conference brings together state agencies and institutions with architects, landscape architects, engineers, contractors, and subcontractors to discuss issues relating to the planning, design, and construction of state projects.

Topics for the 30th conference will include:

  • Double payment of contractors
  • NC Board of Examiners for Engineers and Surveyors – case studies and policies
  • HUB overview
  • Pre-qualification of single prime contractors
  • Geothermal (pros and cons)
  • Special inspections
  • Life cycle cost analysis

NCSUimageOPD

 

 Conference Details:

When:  March 24, 2011

Where:  McKimmon Conference & Training Center, NC State University, Raleigh, NC

Credits:  Architects, engineers, and attorneys will earn 7 credit hours (pending approval by Boards).

Reception:  There will be also be a networking reception and expo sponsored by the Office for Historically Underutilized Businesses following the conference sessions.

To register:  click here  (Pre-registration is required, and cut-off is March 11th).

 Planning on attending?  Let me know and we may be able to meet up for coffee.

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Photo: (c) Office for Professional Development, NCSU

 

 

Why should a Designer worry about the Contractor’s insurance issues?

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Insurance: not just for Geckos anymore

You may wonder why you, as the designer of record, should care about the insurance coverage of the contractor on your construction projects.  After all, that is an issue between the contractor and the owner, right?  Not so fast.  Recent court cases addressing whether or not commercial general liability (CGL) policies provide insurance coverage for a contractor’s poor workmanship can create problems for architects and engineers.

Since architects and engineers usually have errors & omissions policies (and you do have E&O coverage, right?), they may be the only ones with “deep pockets” should litigation arise over construction defects.   The take-away?  It *is* your business to make sure that the contractors on your projects have sufficient resources to pay for construction defects.  It is also in your best financial interest to ensure that you are only working with top-notch, quality contractors. 

The insurance folks at Victor O. Schinnerer & Company recommend:

More than ever, design professionals should use sound risk management practices when selecting new projects—especially condo projects. Design professionals should insist upon providing full construction phase services and should urge developers to retain contractors using qualifications-based selection procedures. 

I wholeheartedly concur.

Questions?  comments on how Builder CGL policy issues are relevant to your design risks?  Drop me a line.

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Photo: “Geico Gecko”  by Scott Kinmartin via Flickr/Creative Commons License.

Green Home Show & Tell (Tue Tip)

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"Green Triangles" This Saturday, February 5th,   the Triangle USGBC will be having a green home “show and tell”.  Come by the Austin home (2825 Barmettler Street, Raleigh) from 12:00 to 1:00 PM.  The home is still under construction, so you can see the wall cavity and all the green systems prior to drywall, including: ICF foundation, advanced framing techniques, high efficiency windows, efficient plumbing design, and spray foam insulation.

The event is free and open to the public.

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Photo: “duo pine trees”  (c) Christmas Stock Images via Creative Commons License.

Root canals & Lawsuits: two things to avoid (Law Note)

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man flossing

 No one (with the exception of sadistic dentists)  likes root canals, and no one (except lawyers) likes lawsuits.  In the same way you can prevent (or limit) the need for root canals through proper flossing habits, you can limit the number of lawsuits you need to be involved in if you include everyone you should the first time around.  For those involved in filing construction liens, this means that when you perfect a lien by filing the lawsuit, be sure you include everyone you need to include.  A recent North Carolina Court of Appeals case demonstrates this principle in full living color.

In Lawyers Title Insurance Corp. v. Zogreo, LLC, __ N.C. App. __ (November 16, 2010), two contractors filed and perfected valid liens on a piece of property.  They did not include, in the lawsuits to perfect the liens, the banks which had given funds to the property owner after they first began work on the property.  The Court held that it was entirely proper not to include the banks (who held deeds of trust on the property to secure their loans); however, by the contractors’ failure to include them, they were forced to later litigate priority issues with the banks.  This is because “if a subsequent encumbrancer is not joined [in the underlying lien perfection lawsuit], he is not bound by the judgment in the action between the contractor and the owner.” 

In other words, even though they filed proper liens, filed the lawsuits timely, and even won final judgment in those lawsuits, because they did not include the banks, the banks were free to start a new action, which they did in this case.  The banks also obtained an injunction to stop any judicial sale of the property until priorities could be established.

Moral of the story? It is better to include all subsequent encumbrancers (i.e., the banks) when perfecting a lien.  It’s not required, but it is better practice.  (And flossing your teeth isn’t required, either).   After all, who wants a root canal, or, in this case, to re-litigate your right to be paid money in yet another expensive lawsuit?  When it comes to root canals and lawsuits, fewer is better.

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Photo: Day One Hundred Fifty-One by Eric Mesa via Flickr/Creative Commons License

Tues Tip: Check out the new AIA Bond forms

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Have you seen the 2010 AIA 312 Payment Bond Form?  If you regularly deal with AIA bonds, be Payment Officer looking at demolitionsure to check out this blog post, entitled “What changes you need to know about in the new AIA A 312 Payment Bond” from the New York Construction Law Update Blog.

  Of particular note:

There is a new section (7.3) that expressly states the surety’s failure to respond within sixty (60) days does not constitute a waiver of any potential defenses.  However, the new AIA A312 also states that if the surety fails to respond and if the claimant has to bring an action to recover under the bond, and is successful, then the surety will be responsible for attorneys’ fees incurred by the claimant. 

The new Section 16.1 provides certain minimum requirements that must be in the notice of claim to constitute a valid claim under the bond.  Previous versions of the AIA A312 did not contain such minimum requirements and a claimant in a rush could potentially submit a simple letter identifying the project and setting forth the amount of its claim to try and squeeze in before the deadline to submit a claim. 

While it is tempting and easy to skip reading standard form contract documents, that is not a good practice.  The new requirements involved in making a bond claim, for example, are something that would be easy to overlook if you have previous experience making bond claims– and it could be a very expensive lesson.  Moral of the story, as always, is to read your contracts, preferably with your attorney and insurance carrier at hand.

Do you use the AIA 312 Payment Bond form?  Thoughts about the new Form versus the old Form? Bonding questions in general?  Drop me a line or comment below.

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Photo copyright of U.S. Air Force and made available via Creative Commons license.