Blog, Construction Law
Mechanic’s Lien Basics
As a contractor, subcontractor, worker or suppler in Indiana who has not been paid (or concerned about payment) for your labor, materials or equipment to improve a private owner’s real estate, you have a powerful tool to secure payment for your work, and possibly recover your attorney’s fees and costs incurred to collect the money you are owed – a statutory mechanic’s lien. A mechanic’s lien is a statutory means to secure payment for your labor, materials or equipment by filing a sworn statement in the office of the county Recorder where the work is performed, setting forth the amount of the claim, your name and address, the owner’s name and address, the legal description of the land as set forth in the latest entry transfer books of the county auditor, and the street and number address, if any, of the owner’s land, as required by Indiana law. Indiana law also specifically permits your attorney to file the lien on your behalf. Because a mechanic’s lien right is purely a statutory creation, the requirements for acquiring a mechanic’s lien must be strictly adhered to before your lien can attach to the owner’s property. A right to a mechanic’s lien on an owner’s property improved by your labor, material or equipment does not require that you contract directly with the owner. However, the owner must have authorized or “actively consented” to your improvements to his property. If you contract or otherwise deal directly with the property owner, there is likely no issue as to the owner’s “active…
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What is the biggest cause of construction disputes in 2019?
In past posts, we’ve stressed poor contracts. In HKA’s latest annual report, changes to project scope led to the most disputes, across the spectrum of project types. As contractors take the lead in design/build projects, and subcontract the design function to the professionals, design disputes as to project scope in this process have nearly outpaced contract disputes in HKA’s 2019 summary. HKA is an international consultancy whose report: “CRUX Insight: A Global Sector Market Analysis” can be found at https://www.hka.com/crux-insight/
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Blog, Construction Law
Indiana is No. 1!
For the best infrastructure in the nation. Wait, what? CNBC’s America’s Top States for Business ranked Indiana’s infrastructure as No. 1 in the country. The rankings were put together using data from the Census Bureau, the Environmental Protection Agency and the U.S. Department of Transportation. The condition of each state’s roads, bridges, railways, waterways and ports, airports and other utilities were considered, along with how much of the country’s population is within a day’s drive of the state. Four major interstates criss-cross the Crossroads of America. Kentucky was ranked No. 2, just ahead of No. 3 Kansas and No. 4 Ohio. Tennessee and Georgia tied for No. 5. The data indicated that Indiana’s bridges are in good condition (just 6.2% in poor condition). That combined with Ohio River and Lake Michigan ports earned big point in the rankings. And in news that may surprise some Indianapolis drivers, just 9.4% of roads were listed as in unacceptable condition. Our first thought is if Indiana’s infrastructure is the best in the country, we’d like to see the worst. They are, in order: Rhode Island, Hawaii, Massachusetts, Maine and Alaska. CNBC rankings of overall business climate ranked Indiana No. 11 nationwide, with good rankings across the board but room for improvement in quality of life.
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Blog, Construction Law, News
New Protections for Architects, Engineers and Other Design Professionals Senate Bill 230 Becomes Law
On July 1, 2019 Senate Bill 230 becomes law giving important new protections for architects, engineers and other design professionals (DPs). The DPs “duty to defend” their clients becomes null and void for contracts entered into after July 1st. This duty was uninsurable and exposed DPs to significant costs during litigation, prior to any finding of negligence. Also on July 1st, indemnification between parties to construction contracts is reconfirmed, reversing a prior Court ruling. Greg Cafouros, Chair of KGR’s construction law practice group, assisted the American Council of Engineering Companies in shepherding this new law through the Indiana Legislature. Greg is standing third from left at the bill signing ceremony with Governor Holcomb, with Rep. Jerry Torr and Sen. Mark Messmer.
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Construction Law, News
NEW LAW PRODUCES SIGNIFICANT CHANGES IN THE FIELD OF DESIGN PROFESSIONAL LIABILITY – SENATE BILL 230
A significant change has occurred in the field of design professional liability during this session of the Indiana Legislature. Senate Bill 230 was passed and it has been signed by Governor Holcomb. This new law fixes a troubling decision from the Court of Appeals and eliminates a design professional’s duty to defend its client if the client is sued. A discussion of both aspects of the bill follows. The Anti-Indemnification Statute One of the hallmarks of a standard construction or design contract is the inclusion of an indemnity provision, which can be found in all AIA and most other construction contract documents. Essentially, indemnification is when one party to a contract (known as the “indemnitor” or “promisor”) agrees to pay any amounts which the other party to the contract (known as the “indemnitee” or “promisee”) is required to pay in a lawsuit (including defense costs). The typical scenario involving indemnity agreements occurs when a general contractor subcontracts out different portions of a construction project, and the employee of a subcontractor is injured on the job site. If the subcontractor’s employee receives workers compensation benefits, the subcontractor’s employee will be prohibited from suing his employer. However, a typical plaintiffs’ attorney will file a lawsuit on behalf of the injured subcontractor’s employee against the property owner, the general contractor, and in some cases the architectural/engineer/design firm that prepared the plans for the project. Normally, the plaintiffs’ attorney for the injured subcontractor’s employee will sue the property owner, general contractor, and/or architectural/design firm under a vicarious liability theory. As…
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Construction Law, Uncategorized
Timber!
Timber is coming to tall building construction. The International Building Code is set to include all-wood high rise construction, up to 18 stories, in its 2021 edition. Depending on fire resistance, allowable heights from 85 feet to 270 feet would be available to architects and engineers. Indiana incorporates many parts of the IBC into the building code and can accept or reject these new construction regulations once issued. Wood is a carbon-neutral building material and can perform as well or better than concrete or steel. Testing by the Federal ATF and Department of Agriculture indicated that mass timber structures provided more fire protection than currently required by the IBC for conventional tall building construction. We can expect vigorous lobbying by the American Wood Council as the states debate the new code provisions. As expected, the Portland Cement Association thinks this is a bad idea.
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Blog, Construction Law
Contract disputes remain most common problem in construction
According to the 2018 Global Construction Disputes Report, which found that contractual errors and omissions, poor contract administration and contractual misunderstandings are the leading causes of conflict. The report further found that such disputes take, on average, 18 months to resolve — an increase over 2016. Read the full article here
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Blog, Construction Law
No. 1 Cause of Construction Disputes
No. 1 Cause of Construction Disputes? The survey says: Errors and Omissions in contract documentation, due in part to poor design management Poor contract administration Owner/Contractor/Subcontractor failure to understand their contract E&O in contract documentation was the most common cause of disputes in North America for the fourth year running. The annual survey by Arcadis, the multi-billion global dollar consulting firm, documented their findings in a recent report: “Global Construction Disputes Report 2018”. The most common methods to resolve disputes were: Party to Party Negotiation Mediation Arbitration The average time to resolve a dispute took nearly18 months, an increase over 2016. The good news is that early resolution techniques, including mediation, resulted in an 82% success rate before trial. The lesson is that early communication with the project team, including your claim professionals and attorneys, can successfully resolve disputes without the need for trial. Arcadis’ complete report can be found here
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Blog, Construction Law
LOOK, UP IN THE SKY!
Nope, not Superman or Supergirl, just a drone. And there are more at work with architect and engineering firms, according to a recent study by Blue Research http://go.skyward.io/rs/902-SIU-382/images/2018%20State%20of%20Drones.pdf Bottom line: 35% of large construction and engineering firms now use drones. They save time, money and capture more information. One big obstacle is getting employees to embrace the new technology. The other is the red tape and “overly stringent” regulations of the FAA. Compliance with ever-changing laws and regulations, both local and Federal, can be a challenge. Your attorney can be a good resource to control the risk of violating these regulations and help you keep your drones flying. Saving time and money, and being your own Superhero.
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Blog, Construction Law
BIM (Building Information Management) in Dispute Resolution
According to Arcadis, the average construction dispute that ends up in mediation or arbitration takes 14 months to resolve at an average value of $21 million. The source of these disputes most commonly involves errors and omissions and unsubstantiated claims. Building Information Management (BIM) models are transforming how buildings are designed and constructed. This recent report indicated that BIM (Building Information Management) had been used more and more to avoid the time and costs of resolving these disputes. BIM can forensically verify whether the completed work matches the contract’s scope of work and when things went off the rails. BIM then permits owners to accurately assess potential claims arising from alleged construction defects or design errors and omissions, using real data. Because BIM keeps a record the progress of a project’s construction over time, change orders, etc., BIM can run models to verify delay claims, for instance, or the impact of design changes, as well as their true cost in time or money. Of course, this only works if the model is kept up to date during construction with detailed, accurate information, which is often a criticism. For design professionals, BIM can also be used to during design to rectify design conflicts or design errors before final plans are approved or a notice to proceed is ever issued. This reduces the chances of disputes with owners and contractors during construction, along with the attendant costs and headaches of dispute resolution. BIM is still a work in progress for most design professionals and contractors. But it can…
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