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Wash Your Hands, Wear a Mask and Read Your Contract

In the midst of this pandemic, not to mention social upheaval, political chaos, and events of historic ramifications, everyone in the world right now is dealing with risk and uncertainty. Personal, family, professional, public, private, cultural, economic, it seems that if it is a noun, it is uncertain. We are coping, mitigating, avoiding, research...
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Construction Disruptions Settle After Initial Impacts

The ever-changing atmosphere of 2020 is nearing an end; however, only the calendar will be what is changing. As 2021 approaches, it is important to review the last several months as the economy plummeted and sharply rebounded to prepare for what the new year might bring. The construction industry, like many other sectors, saw its ups and downs with...
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Federal Prompt Pay Act Does Not Afford Subcontractors Right to Sue General Contractor

On October 15, 2020, in EMTA Insaat Taahhut ve Ticaret A.S. v. Cosmopolitan Incorporated, a federal district court held that the federal Prompt Pay Act (PPA) (31 U.S.C. §§ 3901, et al.) does not create a private right of action for a subcontractor against a general contractor. The dispute arose from a project for the installation of hardened traile...
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Termination of Construction Contracts

Rightful TerminationIf a construction contractor has been rightfully terminated, the contractor has no claim against the owner for damages. Under a properly drafted contract, the terminated contractor may be liable for the costs of completion after termination and other damages.[i]Wrongful TerminationBy terminating a contractor, the owner runs a co...
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Winter Slowdown-Pandemic Combo a New Hurdle for Construction

Winter is coming and that means the inevitable slowdown in construction is not far behind. Depending upon specialties, some construction companies fare better than others during the winter months, but slight declines in overall business are common during the industry's offseason. What remains uncharted territory for many in the sector is the combin...
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Don’t Forget to Send a Notice to Owner in Minnesota

 A delayed downtown Minneapolis construction project has seen its share of complications. As with many companies, construction projects and other business ventures, the COVID-19 pandemic has thrust its ugly head into the world, impacting billions of people. The Dayton's Project in downtown Minneapolis has a delayed opening due to COVID-19, and...
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Commercial Construction Struggles Reach Las Vegas

Many industries have languished in recent months due to the hardships of COVID-19, and the construction sector is no exception. Analyses have shown the impacts are ongoing, including a recent survey from the Associated General Contractors of America (AGC) that found 78% of respondents reporting project delays and disruptions in October. A new wave ...
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Litigation Privilege Saves the Day for Mechanic's Liens

In RGC Gaslamp v. Ehmcke Sheet Metal Co., the Fourth Appellate District held that a trial court properly granted an anti-SLAPP motion because the recording of a mechanic's lien is protected by the litigation privilege.In RGC Gaslamp, subcontractor Ehmcke Sheet Metal Company ("Ehmcke") recorded a mechanic's lien to recoup payment due for sheet metal...
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Nonpayment Protections for Material Suppliers Start with Data

Defensive driving is a tactic that protects motorists. It saves lives and reduces the possibility of accidents. Mastering the skill puts you in the driver's seat, so to speak, to avoid obstacles and stay in control. Acquiring this prowess and self-awareness in other areas of life can be just as important, and it can provide similar protections. In ...
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Construction Industry Plans for Ongoing Pandemic-Driven Changes to Operations

With 2021 on the horizon, the construction industry is moving forward with the pandemic in mind and, unfortunately, the same obstacles remain. A lack of in-person meetings is impeding some companies' ability to conduct business, and there are rising concerns over the coming year's cash flow. Yet, the show must go on, so construction professionals a...
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Eight Issues to Review when Negotiating Construction Contracts in the COVID-19 World

Over recent months, we have all been inundated with webinars, articles and non-stop updates on COVID-19 and how this unprecedented crisis is impacting the construction industry. The term "Force Majeure" has become a common refrain in the COVID-19 era. The issue is that many construction contracts may not even use this term and even more do not use ...
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Tennessee Enacts New Construction Legislation in 2020

The Tennessee Construction Industry Payment Protection Act was signed into law on June 22. The Act addresses or reallocates certain risks associated with non-payment on construction projects under Tennessee's Prompt Pay Act (PPA) and is intended to increase clarity and consistency in the PPA and in Tennessee's mechanics' lien law, Truth in Construc...
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New Georgia Law Changes Lien Waivers

Georgia Senate Bill 315 ["SB 315"] amends the lien waiver statute codified under OCGA §44-14-366. It has passed both houses and has been signed into law by the governor with an effective date of Jan. 1, 2021. The reason the law was amended was a recent decision by the Georgia Court of Appeals that held a lien waiver was not limited to lien/bond cla...
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The Risky Business of Material Suppliers

If there's one piece of advice credit professionals in commercial construction should follow, it's knowing who you're getting into business with from the start. Material suppliers must not only assess any and all potential risks of conducting business with a subcontractor (sub) but also understand the consequences of little to no due diligence. For...
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What If the Contractor, Rather Than the Owner, Signs a Notice of Commencement? Is the Notice Defective And, Therefore, Ineffective?

Under Florida lien law, a Notice of Commencement is a form document the property owner is generally required to sign and record in the public record before commencing any improvements to real property. One of the purposes of the Notice is to provide potential lienors with information they will need to file a lien if they are not timely paid. The st...
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Fraudulently Filing Lien Backfires on Contractor

Liens represent one of the primary mechanisms by which contractors, subcontractors, and other downstream parties secure payment rights under a construction contract. When utilized properly, filing a lien may induce an owner to release funds that are undisputedly owed to the lienor. However, when a party's lien filing is delinquent or defective, and...
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Two Paths for Security in California

Organization is key for credit departments whether there's a pandemic or not. Having a system in place can help with issues down the line especially when paperwork is now scattered at the office and at the home office—two locations for problems. Trying to find that one piece of paper with the name of the surety company at the last minute to keep bo...
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Seventh Circuit Court of Appeals Holds Literal Interpretation of 'Within 90 Days' Under the Miller Act

An appeals decision by the Seventh Circuit underscores the importance of strict adherence to the requirements of the Miller Act. A&C Construction & Installation, Co. WLL v. Zurich American Insurance Company and The Insurance Company of the State of Pennsylvania, No. 19-3325, decided June 30, 2020, concerns a Miller Act claim on a payment bo...
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Remembering the Notice of Non-Responsibility

 For so long, a hot economy and commercial leasing market meant that concerns over unpaid tenant improvement construction and related mechanic's liens were closeted like winter clothes in the heat of the summer. In the current "pandemiconomy," many commercial businesses are planning their return to the office. Some tenants need to complete bui...
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Joint Check Agreements: No Two Are Alike

Nothing is ever carved in stone, so business credit professionals should always sleep with one eye open when expecting payments on construction projects. Finding a way to become more secure is always in the best interest for creditors, even if it only slightly improves the odds of being paid and being paid on time. Each security mechanism works a l...
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