Can Architects be held liable for delay damages?

Yes... If a contractor is delayed by the fault of others under contract with the owner (i.e. by the architect's failure to: 1) provide approriate design docs; 2) properly administer the project; 3) timely approve shop drawings), the contractor may be entitled to delay damages from the liable party. Hewett-Kier Construction, Inc. vs. Lemuel Ramos & Associates, Inc. 775 So. 2d 373 (Fla. 4th DCA 2001)

Mechanics of the Surety Relationship

A surety contract is a three (3) party agreement in which the Surety guarantees to the Obligee (usually the Owner) that the Principal (usually the General Contractor) will perform in accordance with the terms and condistions of the contract. Meaning, if the Principal fails to perform, the Surety promises the Obligee that it will answer the default of the Principal. In normal language, the Surety promises the Owner that if the Contractor fails to perform its job, the Surety will step in and finish. Unlike an insurer, Surety's have the right to seek indemnification from the Principal if the Surety ends up stepping in and finishing the job. There are many types of surety bonds (i.e. statutory and common law). For more information please shoot me an email.

Does Miami-Dade County's Crane Ordinance violate OSHA Rules?

Great article in today's Daily Business Review. Local Builders and Contractors' Associations have filed suit claiming Miami-Dade County's crane ordinance steps on OSHA Rules therefore are requesting that it be blocked from becoming law. The Miami-Dade County Crane ordinance requires crane operators to undergo certification and requires that cranes be designed as "permanent" structures. Plaintiff's argue cranes should be designed as "temporary" structures. This distinction is important because it determines the wind speed the cranes must be designed for. In addition, Plaintiff's also claim that the Ordinance requires additional "jumps" (extension of crane height) which is the most dangerous part of crane operating. Currently, most crane manufacturers design cranes to meet European guidelines (i.e. 92 mph winds). On the other hand, the County Ordinance requires that they be designed to Hurricane Category 3 winds (111-130 mph). Judge Ursula Ungaro of the U.S. District Court Southern District of Florida should rule on this by next week. I'll keep you posted...

Liabilities of Homeowners' Association Developer-Appointed Directors...

Developer appointed board members have the same fiduciary duties and responsibilities as non-developer appointed board members. Furthermore, developer appointed board members are expressly excluded from certain statutory liability limitations. Meaning, they can be sued in their personal capacity. If a developer has established a shell corporation, or has no assets, the developer appointed board members may be an associations only source of redress in the situation where a developer has acted negligently or fraudulently.

Can a local building official reject/deny a statewide product approval?

A building official may deny the local application of a product approval which has received statewide approval, based upon a written report signed by the official that concludes the product application is inconsistent with the statewide approval and that states the reasons the application is inconsistent. Therefore, unless a local building official is willing to provide the above "written" report, he has no authority to reject your statewide product approval. The decisions of local building officials shall be appealable to the local board of appeals, if such board exists, and then to the commission, which shall conduct a hearing under chapter 120 and the uniform rules of procedure. Decisions of the commission regarding statewide product approvals and appeals of local product approval shall be subject to judicial review pursuant to Florida Statute 120.68.

New AIA Form A201 -- The General Conditions of the Contract for Construction:

FYI... The American Institute of Architects (AIA) has completed a total remodification of its core contracts and issued a new form A201 -- The General Conditions of the Contract for Construction (2007 Edition). The A201 is the most often used document of all construction contracts, and virtually all AIA contracts refer to it. For more information on these revisions, there is a great book out there: "The 2007 A201 Deskbook".

Are construction contract "pay when paid" clauses enforceable?

Yes, they are... Although somewhat unfair, Florida Courts have enforced these clauses provided the language clearly and unambiguously states that the contractor does not have to pay the subcontractor/supplier until the contractor receives payment from the owner or lender. The key to enforcing these "pay when paid" clauses is that they be clear and unambiguous. Subcontractors and material suppliers should definitely stay away from these types of clauses.

Florida's Transfer Bond Statute Isn't Working

In a nutshell, Florida's Transfer Bond Statute is not working. Florida Statute §713.24, permits an owner whose property is encumbered by a claim of lien to transfer that lien off the property to other security, such as a cash deposit or surety bond. However, problems with Florida’s transfer bond statute have emerged. Meaning, lienors who have provided labor or materials are finding themselves unprotected and exposed. This article explains the purpose of Florida Statute 713.24, the advantages and disadvantages of this statute, the problems and complications that arise when the statute is applied to real/everday actual situations, and the various possible amendments to the current statutory framework that should improve the statute and further its purpose of protecting the lienors, while still benefiting owners.

Bad News = Good News

South Florida number 1 in home prices slide. South Florida home prices lost 17.5 percent in the final quarter of 2007, the worst performance in the nation, Standard & Poor's said Tuesday. Although this may sound like bad news, this is exactly what the economy needs. A CORRECTION! The sooner home prices correct, the quicker we exit the recession we are in.

RISKY BUSINESS: Construction Risks vs. Business Entity Selection

Construction is risky. However, risks can be mitigated depending on the type of corporate entity you select for your business. (i.e. Corporation, Partnership, LLC) Corporations and LLC's limit an owners liability to the capital invested in their business. Meaning, owners will not be held personally liable for the liabilities of their business. This is also known as "piercing the corporate veil". On the otherhand, partners of a General Partnership are jointly and severally liable for the liabilities of the Partnership itself. This is not a good thing in the world of construction. In addition to risk, there are several "tax" issues you may want to consider when selecting a type of business entity. Please consult with an attorney or accountant for more advice on possible tax consequences.

Troubled homeowners: Can't pay? Just walk away...

Let's use are imagination and assume the following facts were actually "reality": 1) Property values are droping at the fastest rate in modern history. 2) As more and more ARMS (adjustable rate mortgages) begin to reset, monthly mortgage payments are spiraling out of control. 3) The end is no where in sight. Assuming these facts, what should a troubled homeowner who can't pay her mortgage payments do? According to CNN Money, Just walk away... Great article in yesterday's CNN Money. I highly recommend you read it. In a nutshell, even though a foreclosure will destroy a person's credit record, trying to pay off a loan they can't afford could be worse for a borrower if it leads to bankruptcy.

What's the worse that can happen if you violate a federal accessibility law?

You may be ordered to tear down the entire building! This exact question was answered by a federal judge in Oregon. (Indep. Living Res vs. Or. Arena Corp., 1 F. Supp. 2d 1159) In this case, the federal judge stated that the ADA allowed him to order the demolition and reconstruction of the entire stadium. Although the judge was merely quoting the ADA, and did not actually order the demolition of the stadium, this case goes to show the severity of ADA and FHAA violations. Federal accessibility laws are controlled by two Federal Acts: 1) American with Disabilities Act (ADA); and 2) Fair Housing Amendments Act (FHAA). FHAA applies to residential construction. ADA applies to commercial and all other types of construction. Compliance with these acts is critical...

Vote yes on Amendment 1!

Although a testy issue, I highly recommend that you vote "yes" on Amendment 1. Soaring real property taxes are a major burden on this states' construction/real estate industry. Although Amendment 1 may not be what we all want, it's certainly better than nothing. There was a great Q & A in last Monday's Miami Herald that explains the fundamentals behind Amendment 1. In a nutshell, Amendment 1 will: 1) double your homestead exemption (except for school asssessments); 2) allow you to carry over your "save our homes" tax savings to new homestead property (up to $500,000); 3) "save our homes" protection remains on current or newly acquired properties; 4) 10% cap on real property tax increases for businesses; etc...

Can you foreclose on a construction lien attached to homestead protected property?

The short answer to this question is, yes. Article X, Section 4(a) of the Florida Constitution states that an individual's homestead "shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty . . . ." Therefore, an action to foreclose on a construction lien for "contracted for" improvements is allowed, and is not prevented by homestead protection.

Foreclosure Help!

Great article in today's Miami Herald. Local nonprofits and government agencies are organizing efforts to deal with a wave of foreclosures sweeping over South Florida, in an effort to keep borrowers in their homes. If you know of anyone that needs help regarding the foreclosure of their home, please have them call the following organizations: Nationally: Neighbor Works America 888-995-HOPE; Broward: Broward County Housing Authority: 954-739-1114; Miami-Dade: Neighborhood Housing Services: 305-751-5511

Phony contractor accused of more rip-offs

In yesterday's Miami Herald, there was an article about an unlicensed contractor who would enter into contracts with homeowners, begin some of the work, and become hard to reach after pocketing their deposits. Scams such as this are happening more and more. Before you hire a contractor, make sure you check the status of his contractor's license. This can easily be done at www.myfloridalicense.com.

Can illegal immigrants recover worker's compensation benefits?

That's the issue in an article written by James F. Kidd and Rick Blystone. This area of the law is somewhat shady at best. The above article concludes that regardless of how Florida's Worker's Compensation Statute (F.S. 440) is interpreted, emphasis should be placed squarely on the shoulders of the knowing employee, who has "unclean hands" and not the unwitting employer. At the very least, courts should place some burden on unauthorized workers to show that their employer knew or should have known when they hired the worker that he or she was not authorized to work, before it determines that accidents such as these are compensable.

I personally disagree with the above article's conclusion. If employers are benefiting from cheap labor, they should at least treat all their employees equally (i.e. provide equal access to recover worker's comp benefits). Great article, I highly recommend that you read it...

Beware Unlicensed Contractors.....

Beware unlicensed contractors..... The failure to have a proper license as a contractor may have severe consequences to the individual or entity providing the work. Performing unlicensed work may result in the following losses: 1) loss of lien rights (F.S. 713.02); 2) loss of contract rights (F.S. 489.128); 3) treble damages (F.S. 768.0425); 4) damages for violating the Florida Building Code (F.S. 553.84); 5) administrative sanctions (F.S. 455.228); 6) prosecution for a crime (F.S. 489.127); 7) unfair trade and practice (F.S. 501.204) Read the attached article for more info....
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