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08Dec 2014

If you need to hire a contractor to build a new office building, condo or other structure, it is important to ensure you have the right contracts in place.  It can be difficult to get everything done properly because most people don’t work with these types of contracts very often.  This gives the contractors, who frequently deal with these matters, an upper hand. In order to level the playing field, take some time to review the following five important points:

Start with the Basics

The first thing you need to do is make sure the contract covers all the basics of what work is going to be performed.  Items such as the scope of work, the date and time by which the work must begin, the date and time by which the work must be completed, the price, and details about who is responsible for the closeout. Cover these items, and any others that are specific to your job, with enough detail to ensure there is no ambiguity.

Don’t be Pressured into a “One Size Fits All” Contract

Most contractors will have a general contract that they customize for each new job they take on.  While these are often well written, they can have problems.  Make sure you closely read through the contract that they present and only agree to use it if it meets your needs to.  Some contractors will try to pressure you into using their contract because it is easier for them, but the most important thing should always be to use a contract that represents your interests.

Identify Pre-Construction Responsibilities

Clearly identify who is responsible for what, and which groups will be working together prior to the actual construction taking place.  In most cases, the construction company will have to work with an architect, have supplies delivered, and perform a number of other tasks before ‘breaking ground.’  Make sure these activities are covered in the contract to avoid problems.

Include Details on the Construction Process

Like the pre-construction responsibilities, it is a good idea to clearly outline what types of things the construction company will have to do during the actual construction. Things like working with other contractors (plumbers, electricians, etc).  You can also include where you want the construction company to purchase the materials for the job if you have a preference.

Clearly Identify the End of the Job

The end of the job, or job closeout, is often somewhat unclear.  Make sure you put in what exactly will signal that the contract has been fulfilled.  For example, you may indicate that the job is only completed when the local inspectors have completed their inspection and given their final approval.

If you have any questions about a construction contract, or you would like to review one before you sign it, please give us a call today!

07Nov 2014

If you are having problems with a contractor, sub contractor, homeowner or supplier and considering hiring a Florida construction law attorney you should not participate in the process alone.

Florida construction law and procedures are quite complicated. For example, if you place the wrong or incorrect information on a Notice to Owner or Claim of Lien it could have serious consequences. An experienced Florida construction law attorney is necessary to navigate the procedural waters.

Be watchful of so called Florida construction law attorneys who claim to specialize in this complicated area of the law. Because construction disputes in Florida have dramatically increased over the last years and many lawyers are jumping on the band wagon and claiming to be what they are not. We strongly recommend that you hire someone who concentrates in this area of the law. Consider the following factors when hiring a Florida Construction Law Attorney.

1. How long has the attorney practiced Construction Law?

2. You want an attorney that actually handles the case themselves and does not simply refer the case out to another lawyer. The reason for this is that the initial consultation is vital and immediately determining whether you have a claim or defenses is crucial.

3. Ideally, you want your lawyer to be able to handle both litigation and transactions in the area of construction law. This is important because this allows the lawyer to advise you as to how to handle the current litigation and how to prepare the proper documents int he future to avoid litigation. Good lawyers keep their clients out of court. If a lawyer does not handle both construction litigation and the transaction portion, he may not be able to determine what is right for you.

4. You want to inquire of your lawyer if he is Board certified in Real Estate or construction law because this means that he has completed a series of examination that allow him to consider himself an expert in his field.

5. Finally, you want to ask you lawyer how many Florida Construction law matters he has handled as this will allow you to gage his experience.

Positive answers to the above questions will help you in hiring the right lawyer for you.

Ray Garcia, Esq.
Board Certified in Real Estate Law
by the Florida Bar
www.floridaconstructionlawgroup.com

02Nov 2014

Section 713.13, F.S., provides that the recording of a Notice of Commencement (NOC) gives constructive notice that claims of lien may be recorded and will have priority over any conveyance, encumbrance or demand not recorded against the real property prior to the time the notice is recorded. However, any conveyance, encumbrance or demand recorded prior to the time the notice is recorded and any proceeds thereof, regardless of when disbursed, shall have priority over liens. The NOC must be recorded with the clerk of the court where the property is located by the owner or the owner’s agent before a contractor actually begins an improvement to real property or recommences completion of any improvement after default or abandonment. A certified copy of the recorded notice or a notarized statement of filing and a copy must be posted at the jobsite. The NOC must include the legal description of the property, the street address and the tax folio number, if available. It must also include a general description of the improvement, the name and address of the owner, the name and address of the contractor, the name and address of any person designated to receive notices, and the anticipated expiration date if different from one year. The form for the NOC is provided in s. 713.13(1)(d), F.S.

For contracts greater than $2,500, the applicant for the building permit must file a certified copy of the recorded notice or a notarized statement of filing and a copy with the building permit authority. The notice must be filed before the first inspection or the property will not be inspected.7

A NOC is specifically not required prior to issuing a building permit.

The building permit must include a 14-point capitalized notice regarding the filing of a NOC. All liens from persons who do work to improve a property relate back to the filing of the NOC.

The NOC is valid for 1 year, unless otherwise stated in the notice. Any payments made by the owner after the expiration of the NOC are considered to be improper payments.

If the improvement described in the NOC is not commenced within 90 days of the recording of the notice, then the notice is “void and of no further effect” which results in any payments after that time also being improper.

Ray Garcia, Esq.
Board Certified in Real Estate Law
by the Florida Bar
www.floridaconstructionlawgroup.com

02Nov 2014

Section 713.20, F.S., provides for the waiver or release of a lien by any lienor giving a Notice to Owner and may be requested by the owner before making a payment to the contractor. The provision does not allow the lienor to waive the right to payment in advance of doing the work, but nothing prohibits the waiver prior to receiving payment. These waivers must be obtained by the owner prior to each payment to the contractor if the owner has received a Notice to Owner from a subcontractor. If the owner fails to request a Waiver or Release of Lien prior to each payment, the payments become improper. If the owner’s payments become improper, he or she may become liable to any lienor who has properly served notice and recorded a lien and therefore may end up paying twice for services or materials. Requiring and obtaining a Release of Lien at each payment for every Notice to Owner filed by a subcontractor “closes the loop” and releases the owner from liability for those payments.

Ray Garcia, Esq.
Board Certified in Reale Estate Law
by the Florida Bar
www.floridaconstructionlawgroup.com

02Nov 2014

Section 713.06(2)(a), F.S., provides that, prior to filing a lien, a lienor who does not have a direct contract with the homeowner must serve the homeowner with a Notice to Owner that sets forth the lienor’s name and address, a description sufficient for identification of the real property, and the nature of services or materials furnished or to be furnished. The Notice to Owner must be served before commencing, or within 45 days of commencing, to furnish the service or materials by the potential lienor. The notice must be served before the owner’s final payment to the contractor, after the filing of the contractor’s affidavit.

If a Notice to Owner is not served, then a lien cannot be enforced. Section 713.06(2)(c), F.S., provides the form which should be used for the Notice to Owner. The Notice to Owner includes a warning to the owner that subcontractors may file a lien against the owner’s property even if the homeowner has made payment in full. Under s. 713.06(2)(d), F.S., a Notice to Owner may be served on a lender if designated in the Notice of Commencement as a person to receive the Notice to Owner. After receiving a Notice to Owner, the lender is required to make proper payments under s. 713.06(3)(c), F.S. If the lender fails to do so, it is liable to the owner for “all damages sustained by the owner as a result of that failure.”

Ray Garcia, Esq.
Board Certified in Reale Estate Law
by the Florida Bar
www.floridaconstructionlawgroup.com

27Oct 2014

Now that the Florida construction industry is recovering from years of downturn, the Associated General Contractors of America said in a new report that Florida Contractors are having a hard time locating skilled workers such as carpenters and electricians, . In the AGC’s survey of about 1,000 contractors nationwide of which only 11 contractors in Florida were represented.

According to the Associated General Contractors of America, Carpenters are in most demand in Florida,then drywall installers, electricians, equipment operators and painters, according to the survey by the Associated General Contractors of AmericaFlorida. In addition, Florida contractors also reported having trouble finding some professional workers, especially project managers.

According to the survey, South Florida contractors also have said they are having trouble filling some specialty jobs, citing the loss of workers to the oil industry and others who left the business during the recession and housing crisis to find employment in other indurties. The fact that the Florida construction industry is a good sign for real estate and market growth.

Ray Garcia, Esq.
Board Certified in Reale Estate Law
by the Florida Bar
www.floridaconstructionlawgroup.com

20Aug 2014

Florida’s Second District Court of Appeal in the case of Snell v. Mott’s Contracting Services, Inc. addressed an issue pertaining to lien rights and the difference between filing a lawsuit and resolving a dispute through arbitration. A big concern that this case resolves is that attempting to resolve your dispute through arbitration instead of litigation may cost you some of your Florida’s lien law rights.

The Snell case involved a construction contract between the homeowner and the contractor that had a provision which provided for disputes to be resolved through arbitration rather than litigation. In Snell,  the contractor properly recorded its lien, and the homeowners filed a lawsuit in which they asked the court to determine that the lien was invalid.  The contractor moved the case to arbitration based on the arbitration provision. The court agreed and the parties were to arbitrate the matter. The contractor prevailed in the arbitration and was entitled to recover its attorney’s fees in accordance with Section 713.29 of the Florida Statutes. The appellate court found that the contractor, by asking to have its dispute resolved through arbitration, did not bring an action “in a court of competent jurisdiction.” In doing so, the court held that the contractor’s rights under Florida Lien law had expired, and that the contractor had no basis for recovering its attorney fees. As a result of the hodling in Snell, a contractor may lose a substantial portion of its recovery merely because he followed the language of his contract by resolving his dispute through arbitration.

Ray Garcia, Esq.

Board Certified in Real Estate Law

by the Florida Bar

www.floridaconstructionlawgroup.com

11Aug 2014

As far as zoning is concerned, the tenants need to do their due diligence and independently ascertain that the location that they have selected to lease allows for the business that the tenant is carrying out. Tenants should try to negotiate into the lease agreement representations and warranties on the part of the landlord that the leased premises are zoned for the tenant’s intended business use. Landlords on the other hand, should include a provision that they make no warranties as to the zoning of the leased premises for the tenants intended use only when the landlord believe that the zoning for the lease premises may not permit the tenants intended use.

As far code violations, they should generally be handled in a similar manner as zoning issues referenced above with each party attempting to shift the burden of liability away from each other. However, with code violations, the tenant must thoroughly inspect the premises with a contractor to determine if there are any code violations. Real estate attorneys recommend to their tenant clients that they perform a lien search with a lien search company that includes, code violations and open permits before signing a lease agreement for the premises. The landlord also needs to take an extra precaution especially when a tenant is making improvements to the leased premises and require the tenant to indemnify the landlord from any costs and fees imposed by code violations caused by the tenant’s work on attempting to improve the premises. Again, the landlord should also incorporate into the lease agreement, the right to cure the code violations himself and assess the costs and fees associated with resolving the code violation on the tenant.

Ray Garcia, Esq.

Board Certified in Real Estate Law

by the Florida Bar

www.floridaconstructionlawgroup.com