Florida House Bill 501 seeks to reduce the statute of repose from 10 years to 7 years for construction claims. HB 501 was introduced to the house in January 2015. If approved, HB 501 will take effect on July 1, 2015. This can vastly change construction law in Florida as a statute of repose bars a claim after the passage of the period of repose expires, unlike a statute of limitation which bars the filing of a claim after the accrual of time from the initial cause of action. Under Fla Stat 95.11(3)(c), the statute of limitations for construction defects claim is four years after the date the defect is first discovered or should have been discovered under due diligence. The current statute of repose expires after 10 years after the later of: (1) the date of actual possession by the owner; (2) the date of the issuance of a certificate of occupancy; (3) the date of abandonment of construction if not completed; or (4) the date of completion or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer.

Although, the proposed 7 year statute of repose will not apply retroactively and will affect claim made on or after July 1, 2015, there is an exception to claims that would not have been barred under the current statute of repose but will be barred under the proposed FB 501, those claims will not be immediately disallowed and may be commenced until July 1, 2016.

Ray Garcia, Esq.

Board Certified in Real Estate Law

by the Florida Bar

www.floridaconstructionlawgroup.com

Building your dream home is supposed to be one of life’s most exciting moments, and with careful planning and attention to detail, it can be. But if you start the project without knowing in advance what will and won’t work for you, or cut corners where you shouldn’t, the result could turn the dream into a nightmare.

This blog entry highlights five mistakes that people commonly make when building their new home, and how to avoid them.

Mistake #1: Not including a buffer in your budget

Once you’ve gotten all the necessary quotes from architects, contractors, and other building professionals, you will have a general idea of how much it is going to cost to build the home you want. But don’t assume that this is all you will end up paying before it’s over, because it could be more. And if your budget has been exhausted, the house could remain half-finished until you get more funds together.

Your budget should generally include a buffer of around 10% of the quoted cost. This will prevent the project from being derailed by unexpected costs such as wage increases, changes in material costs, etc.

Mistake #2: Short-term planning

Many people build homes with only short-term plans in mind. A small bungalow is fine for a young couple, but what if you have children? Will there be rooms available for them or will expensive renovations have to be done? Do you plan to eventually bring your parents in to live with you? If so, think about putting bedrooms on the ground floor. Your house should be built to accommodate important lifestyle changes.

Mistake #3: Failing to consider resale value

If you don’t plan on living out the rest of your years in the house, you’ll want to sell it eventually. A lot of people forget this, and either build the place in appealing but inconvenient locations, or design it to reflect their personal quirks and tastes. When the time comes to sell, buyers shy away.

To help ensure that your house brings a good return on investment, keep the layout and fixtures tasteful and timeless. Buy your build plot in a desirable location. All of these factors will contribute to a good resale value.

Mistake #4: Trying to bypass the permit process

Getting the go-ahead to build your home involves obtaining certain permits. The process can involve a series of time-consuming and expensive inspections, which is why people occasionally try to start construction first and worry about the permits later. Don’t do it: your project could be stopped and you may even be fined.

Mistake #5: Not vetting your builders or contractors

With so much at stake, you need to confirm that the builder and contractors you hire are competent and reliable. Don’t be blindsided by low prices: the work could end up being just as cheap.

Ask prospective builders for photos of past work and testimonials from previous clients. If possible, go view a house they built. If it looks good, you’re probably in good hands.

Building your dream home is a major life milestone: don’t ruin it by making mistakes that can be avoided with a little diligence.

You’re ready to build your dream home – or you think you are. You probably know exactly how many rooms you want to have and what their purpose will be, but have you thought through all of the key details?

Poor planning and badly managed budgets can cause far-reaching problems, so you need to approach the project from many angles. These tips will help you create a better design plan and budget for your dream home, so that the final result is everything you hoped for – and more.

1. Carry out space planning carefully. Unless you’re building a mansion, proper attention to space planning and design is paramount. Don’t go overboard on the storage space: do you really need a closet in the foyer, especially if you live in South Florida where coats aren’t regularly worn? Does the master bedroom closet have to be a walk-in one? If not, allocate the extra space to the bedroom or adjoining bathroom.
2. Hire an experienced builder. Any construction project is a major undertaking, but when you are building your dream home, you can’t afford mistakes. It can be tempting to save money by simply hiring the cheapest builder around, but is it really worth risking everything to save a few bucks? In construction you often get what you pay for… so don’t cut corners on your dream home!
3. Consider HVAC needs. It’s hot in South Florida – so make sure your new home can stay cool! HVAC systems should be in accordance with the size of your home. Large units in small houses will cause energy bills to skyrocket, while small ones in bigger homes will do a poor job of cooling and heating. Whatever size system you end up installing, don’t forget to arrange for regular maintenance: moisture and mold growth are common concerns that can negatively impact your family’s health.

Take your time and make all important decisions in advance, not as you go along. Poor design choices will make your home uncomfortable and possibly unhealthy. Work closely with your architect or builder: they will help you decide what makes sense given your family’s needs, and show you where you can save some money as well as where you absolutely should not cut any corners.

Questions or comments? Need assistance with the legal side of building your home? Please contact us today to learn more!

The litigation process can be contentious, stressful, and expensive. The time needed to get to trial and obtain a resolution often exceeds the time spent completing a construction project, and litigation drains the energy and attention of all participants from the project or job at hand. Similarly, professional reputations are damaged or lost in an industry where reputation is a valuable business asset.

Often, these negative dispute repercussions can be avoided entirely by opting for mediation or arbitration to reach an agreement.

Construction Mediation

One alternative to litigation is mediation, a private and informal method of dispute resolution that involves a mediator. The process is entirely voluntary, with no one being compelled to accept a settlement. Mediators are neutral and independent parties who assist disputants in reaching an agreement and a resolution to the problem at hand. Settlement terms are decided by the parties, not the mediator.

At the hearing, the disputants have the option of presenting evidence and/or documentation to support their position. The mediator facilitates the negotiation process but cannot issue a binding decision. Once a settlement is reached, the mediator will help draft the agreement terms, which can then be taken to an attorney and written into a legal contract.

Construction Arbitration

The purpose of arbitration is to privately settle a dispute by using a neutral third party as a decision maker. It is essentially a forum that permits the disputing parties to present their cases to a single arbitrator (or sometimes a panel) for a final decision.

Unlike trial judges, who often have no expertise in construction, engineering, and architecture, arbitrators can be experts selected for their technical knowledge. Their award decisions are also more likely to be final, which reduces the risk of costly appeals.

Arbitration is preferable to litigation in that it is a speedier and less expensive method of resolving disputes. It is also a more informal proceeding, and closed to the public. Both sides are allowed to present evidence and call witnesses to support their position, and each party can question the other’s witnesses and evidence. After everything has been presented, the arbitrator withdraws to review the case and make a decision.

In binding arbitration, any award made may be enforced in court. Judges will carefully review each case and its specific arguments to determine if anything in the proceedings invalidate the award, such as fraud or misconduct.

If you have questions about this process or about construction law in general, we can help. Please get in touch with us today!

It’s often said that with large construction projects, delay-related disputes are inevitable. Situations that are beyond the control of the contractor(s) do arise and cause delays, but the tips below will minimize the risk of a project dragging on past its originally projected completion date.

1. Complete the submittal process on time. Paperwork can and will hold up a project. The submittal process is the stage at which materials are proposed, approved, and ordered. If the entire project team is not behind the process from the beginning, the materials won’t arrive on time and delays will result.
2. Discuss any project changes/additions up front. There are inevitably changes to any construction project. Have a discussion with your contractors to determine how changes or additions will impact the project’s overall timeline and then communicate with your client. This will ensure that a three-month project will not develop into a six-month project.

3. Develop realistic milestones and contingencies: Schedule disputes often arise because of unrealistic milestones. To make them realistic, each one needs to have sufficient contingency in keeping with the degree of uncertainty. This contingency can be established by asking the contractor to provide an early completion schedule or carrying out a comprehensive risk assessment and documenting the findings.

4. Take a collaborative approach to information management.  When all parties involved in a project know what’s going on at each phase, frequent or late changes can be prevented. By establishing a central and collaborative information management system, everyone has access to important documents and correspondence, reducing the likelihood of errors and misunderstandings.

5. Correct and document any logic-based schedule flaws. If you find and correct any schedule flaws, document and explain these changes when you make them. If a dispute makes it into a courtroom, arbitrators and judges will question changes made after construction is complete.

Keeping construction projects on schedule is always a challenge. Delays are expensive financially and in terms of eroded customer trust, so they need to be avoided as much as possible. Although timely performance can be impacted by unpredictable factors such as abnormal weather, other potential issues (poor scheduling, labor or material shortages, and regulatory changes) can be anticipated with proper planning, limiting their ability to take projects off-track.

Questions about construction law? Facing a legal dispute? We can help – give us a call today at (305) 227-4030!

Building your dream home on a budget is possible. It takes discipline and a willingness to make the right choices, but in the end you’ll have a house you love and can afford.

This article explores five tips for building your dream home on a budget. They’re simple, don’t call for a lot of sacrifice, and won’t leave you in the red after the project is complete.

Tip No. 1: Think small

We’re always encouraged to think big, but when it comes to building your home, small can actually be better.

It can be difficult to see it this way, given the fact that most new subdivisions contain huge homes that could have been estates in an earlier era. But do you really need all that space? Instead of building a larger home, why not throw out or give away things you no longer need, such as old furniture and books that haven’t been read in years? The majority of American families can do just fine with a 2,300 square foot home, and it’s a lot less expensive to heat and light too.

Tip No. 2: Keep it simple

Look at any of today’s builder houses and you’ll see a lot of unnecessary add-ons, such as an army of gables and a zigzag floor plan with multiple corners. Many stock house designs also have illogical structural organization, and compensate with extra elements to hold it all in place. These added supports don’t come cheap, either.

Stick to box-style designs. They are simple, affordable, and have a clarity in their layouts that makes them easy to build and maintain.

Tip No. 3: Eliminate extra walls

Open floor plans have a lot going for them. The fewer walls there are in a home, the less material is used, which translates into lower build cost. They also make inside spaces look and feel larger, making a house with less square footage more appealing.

Tip No. 4: Make smart materials choices

A lot of people blow their budgets by insisting on stained wood baseboards, hard coat plaster walls, and granite counter tops. Resist the urge to compete. An attractive floor can be built using materials from a warehouse wholesaler, and what’s wrong with laminate counter tops? Bold colors can add an inexpensive touch of glamor, and durable materials save additional money by being low-maintenance.

Tip No. 5: Buy at discount warehouses or online

Expensive showrooms are a budget hazard, as the products have huge markups without any appreciable extra benefits. You can purchase hardware, furniture, lights, and accessories from online retailers. A lot of people visit showrooms to decide what they want, and then buy the same units online at a fraction of the price. Plumbing fixtures can be trickier to buy over the Internet because the retailers don’t always sell the right internal housing for the shower heads and faucets, but a local plumbers’ supply warehouse can help you coordinate these particular needs.

Focus more on what you need than what you want or think you should have. Sticking to a budget will require you to compromise, but you won’t spend years afterward paying off the build costs.

Questions about construction law? Building your own home and need legal support? We can help – give us a call today at (305) 227-4030!

Getting a construction loan can be difficult, but the good news is that it doesn’t have to be. The right approach and advance preparation can result in the approval you’re looking for.

New home sales are on the rise, putting construction loans in great demand as homebuilders try to cash in on the limited supply of available properties. Here are four tips that will improve your knowledge of project financing and maximize your chances of approval.

1. Confirm that you can afford to pay back the amount you want to borrow. Before going out to buy land, make sure you can prove to the lender that you are able to afford the monthly payments. They will also want to know your FICO score, how much (if any) money you have for a down payment, the extent of your construction experience, and how you plan to accomplish the proposed project.
2. Investigate your financing options beforehand. There are different types of construction loans out there. One of the more popular options is the “one-time close,” which provides you with one fee schedule and one closing. You can also get a 12-to-18 month construction loan that will have to be refinanced into a conventional mortgage once the project is completed. This involves two sets of closing costs and two loans, but once construction is finished you can look around for mortgages that suit your circumstances and budget.
3. Investigate interest rate options. Interest rates can be locked until construction ends, but they tend to be higher under this type of arrangement. If the rate remains the same after the project is finished and the loan is converted into a mortgage, you need to ensure that a floating interest rate won’t impact your ability to afford the monthly payments when rates go up.
4. Take interest reserve into account. This reserve, which is added onto your loan total, is an estimated interest payment covering the construction period. It eliminates the need to make monthly payments while the project is being built, but because this reserve is added to the loan amount, you will pay interest on it. Decide whether you want the interest rate to be added, or if you want to make monthly interest payments instead.

If you don’t have perfect credit or a strong relationship with an existing lender, obtaining an affordable construction loan will be challenging, but if you only apply for what you can truly afford, approval is more likely to happen, especially in today’s booming housing market.

If you’ve got questions about construction law, we can help. Contact us today!

As a contractor, the last thing that you want to deal with is a legal dispute or a lawsuit. In this blog entry, we identify four ways you can take action to protect yourself and your business:

1. Only take a construction job that you thoroughly understand and know you can handle. This is of key importance. If the job requirements include duties that are outside your area of expertise, politely decline and, if possible, recommend an alternate contractor. You also need to pay attention to your gut instincts. If talking to the customer leaves you doubting that they will be easy to work with or you feel that their expectations are unrealistic given your resources, do not take the job. Don’t set yourself up for failure. Foresight is always better than hindsight in these scenarios.
2. Spend some time talking to the customer and going over all the job details. When you undertake a job, you need to have a clear understanding of the scope and nature of the work involved, and know what the customer’s expectations are. Both contractor and customer need to be in agreement on the material types used, timeline to completion, permit application procedures, parties involved in the actual work, etc. Do not assume anything.
3. Take precautions before doing jobs for family and friends. The family and friends of contractors often want more for less, although they may not explicitly state such. To prevent this type of dispute from arising, get everything in writing. Have the customer sign all drawings and specs, and put any change orders in writing, no matter how small. If you verbally agree to make a change, document everything afterward and have the customer sign your summary before proceeding.
4. Keep everything honest and Code-compliant from start to finish. If the customer asks you to build without obtaining the proper permits beforehand or to use materials that do not meet code specifications, decline the job. Following their directions will not protect you from claims or lawsuits that can result from unapproved actions and choices. You could end up covering the cost of rebuilding the structure to code along with any assessed penalties.

Questions about construction law? Facing a legal dispute? We can help – give us a call today at (305) 227-4030!

In the construction industry, contracting parties have the freedom to agree to whatever method to determine the amount of compensation for the amount of work performed on a contract. This article will discuss the general types of methods of compensation for contractors, which are: lump sum contracts, measurable or re-measurable contracts, and cost plus contracts. Although parties are free to combine or create new methods of compensation, as long as mutually agreed upon.

A lump sum contract is where a contractor agrees to perform the labor in the contract for a fixed amount or lump sum. The contractor carries the burden of being liable for unforeseen contingencies, if the expenses to complete the labor are greater than the contracted fixed amount of payment, in a lump sum contract. However, one exception is where the contractor has performed additional work outside the terms of the contract, which may be compensable. Finally, under common law, the contractor is not entitled to payment until the contractor has completed all the work under the contract.

Under a measurable or re-measurable contract, a contractor’s right to payment is determined under a contractual mechanism which considers: (1) the final amount of labor performed, which is measured; and (2) payment at the previously agreed upon rate, which is based upon the final amount of labor performed, which is valued. A contract administer must measure and value the work performed using the rates and amounts stated in the contract. The contract administrator has the power to increase or decrease the rates and amounts that are found to be unreasonable, where the actual amount of labor performed is greater than or less than what was billed. Additionally, where the work performed was drastically different than to what the contractor could have anticipated, such as worse conditions, a revision of contract rates may be appropriate.

A cost plus contract is where a contractor is compensated for both the financing of the construction project and for a fee as profit. A contractor’s right to payment arises through indemnity and is entitled to costs, such as: wages, site establishment costs, subcontractors, suppliers, and off-site overheads.  Typically, cost plus contracts require evidence of the costs incurred, in which an invoice will suffice. However, invoiced costs must be deemed reasonable, or at least not challenged by the owner or contract administrator to be reimbursable. Finally, a contractor is not entitled to reimbursement for interest accrued on money borrowed to fund the construction operation.

Ray Garcia, Esq.

Board Certified in Real Estate Law

by the Florida Bar

www.floridaconstructionlawgroup.com

Your next real estate investment needs to be thought out carefully. Taking the plunge into an unknown opportunity is far too risky, particularly here in South Florida, as many investors have learned the hard way over the last decade. To improve your chances of success and maximize your working capital, it’s important to do your homework.

If you’re looking to invest in a condo project, avoiding these five common mistakes will help you avoid prevalent market traps and spot a genuine – and profitable – opportunity.

1. Buying at inflated prices: Don’t buy condos in a heated market, as the prices will be inflated. As the saying goes, you make money in real estate by how much you pay for it, not how much you ultimately sell it for.
2. Falling for developer hype: Heated markets inevitably attract amateurs out to make quick money. Developers will spend thousands of dollars making the project sound amazing, but a lot of their products lack design and quality. If you’re looking at a particular neighborhood, buy from a local developer with a successful product portfolio.
3. Not having a game plan: Before investing in a condo project, you need to formulate a specific plan. Ask yourself: will you manage the property yourself? Are you familiar with capital gains taxes? Is residential real estate the best project for you? If you don’t answer these pertinent questions in a way that makes sound business sense, you run the risk of losing your capital or worse.
4. Buying in an uncertain neighborhood and location: All condo investments hinge on their location and the surrounding neighborhood. This doesn’t mean that you should confine your buying to gentrified neighborhoods, but the project needs to have good resale and rental potential in order to be profitable.
5. Intending to sell before the project registers: Avoid new construction projects if you are not in a position to obtain a mortgage when they register. Condo assignments are flooding the market and a lot of them are selling below their original purchase price.

To be a savvy and successful investor in the condo market, you need to look at several deals before deploying your capital on those with the most potential. Over time, you will start thinking creatively and acting on instinct when you craft deals – two abilities that mark the successful investor. If you’re thinking about investing in a real estate project, we’d be happy to help. Please contact us today to learn more!

A construction defect is a condition that lowers the value of a home, condominium, or similar property. This defect can be in workmanship or design, or be connected to land movement. There are two principal defect categories that allow homeowners or homeowners’ associations to recover damages:

Defects in materials, workmanship, and design: This category includes stucco and siding deficiencies; water entry via sliding glass doors, roofs, and windows; faulty electrical wiring; insufficient insulation; defective mechanical and plumbing; termite infestation; and more.

Land movement: Examples include underground water sources, inadequate drainage, expansive soils, landslides, earth movement, improper compaction, and similar conditions.

Both categories of defect can be catastrophic and result in personal injury as well as substantial property damage.

Every builder’s warranty differs in terms of what is and isn’t covered, length of the coverage period, and what the builder will do to correct construction issues. Most warranties will not address the majority of typical construction defects, and they will often require you to arbitrate and refrain from suing in court. Be sure to read the fine print, because the warranty may also state that you could pay the developer’s costs if you lose your case. Whatever you do, do not blindly assume that the developer will correct any defects to your satisfaction. Warranties are marketing tools more than anything else.

To prove that a defect exists, you will need to hire an independent expert with the education, experience, and training to testify about defect causes in court. If your roof has a defect that causes it to leak, you will want to engage an expert who has designed sound roof systems and has experience in evaluating defective roof systems. Although an expert may help win your case, they can be expensive (up to $300 or more per hour), so consult an attorney before hiring the expert to control the expenses and protect the information.

In terms of recoverable damages, courts will award condominium owners’ associations the cost of repairing the defects. You can also claim any reasonable amounts paid to experts to determine the cause of the defects and supervise the repairs. Any amounts paid for temporary repairs (i.e. to prevent further damage) can also be recovered. If you had to leave your home because the defect(s) made it uninhabitable, relocation costs may be reimbursed. If the developer has defrauded the buyer, courts may award punitive damages.

If you’d like to learn more about any element of construction law, we are here to assist. Please contact us today!

Whether you are the contractor or the owner in a construction project, having a good contract in place before any work is started is absolutely essential.  It will help to make sure everyone is on the same page so there is no confusion or miscommunication.  It can also help to minimize the risk of litigation after the job has begun.

Unfortunately, even when a contract is signed, there are often mistakes which undermine the integrity of the document.  Below are four specific mistakes to watch out for:

Oversimplifying the Contract – Many people try to keep the contract extremely simple.  While there is generally no need for a 200 page document, the contract MUST include everything that each party has agreed to orally.  Make sure all contracts answer the main questions about the job, which can be summed up as “who, what, when, where, how and how much.”  If your contract does not answer one or more of those questions, it should be revised.

Improperly Identifying Individuals & Companies – Remember, the contract is a legal document so you should be using the legal identifiers of everyone involved.  If hiring a contractor or sub-contractor, for example, make sure to use their full business name throughout the contract.  In addition, make sure the person signing the document has the legal authority to sign on behalf of the company.

Using Standard Contracts without Necessary Revisions – Many contractors use generic legal contracts to help simplify the process.  While this can be a very useful option, it is also important to make edits to it as needed.  Make sure the final version of the contract properly reflects the actual work that is being done as well as any other details that are being agreed upon.

Failing to Read the Entire Contract – This is perhaps the biggest mistake people make when it comes to any legal document.  Even if you trust the people involved, it is best to have everyone read through the contract completely to ensure there are no mistakes or misunderstandings.  We highly recommend that you have a construction attorney read it as well.

By avoiding these four common mistakes you can help ensure that the job will go much more smoothly.  In addition, everyone will have the written document that they can refer to in the event that there are any disputes during or after the job.

If you have any questions about construction contracts, please don’t hesitate to contact us – we look forward to assisting you!

Most contractors know that one of the biggest complications for their business isn’t related to finding or completing work, but rather litigation.  Whether the customer wasn’t clear on what they wanted, or they are just looking to take advantage of a situation, the costs of litigation can cause major problems for any contractor or construction company.

To help you reduce the risks of being sued in your next job, here are ten tips:

1. Review the Plans – Take the time to go over all of the plans and any specs related to the job with your client before you place your final bid.  Making sure you are on the same page with the client can help to prevent many problems.
2. Always have a Written Contract – No matter how nice the client seems or how small the job is, a written contract should be required for every job you perform.
3. Get Extras in Writing – If the client wants any extras, include that in the contract.  If they add them on after the contract is signed, write up an addendum to the contract and have both parties sign it.
4. Document All Delays – All contractors know that there is always the potential for delays due to unforeseen circumstances.  When this occurs, make sure to document it clearly.
5. Document all Disputes – If you run into any sort of dispute or disagreement with the client, make sure to keep a detailed record of what the dispute was, and how it was resolved.
6. Speak with a Construction Attorney – Ideally, you should have an attorney who specializes in construction law review all contracts.
7. Keep Records – Keep detailed records of the exact work you performed, the supplies you purchased, and everything else that happens on each job.
8. Give Specific Due Dates – Every job should have a set date by which you are committed to have each step done.  This will help avoid miscommunications and other problems that can end in litigation.
9. Document Payment Schedules – If you are allowing the client to make payments on a job, make sure it is clear when each payment is due, and what happens if the payment is late.
10. Educate Employees – If you have employees or sub-contractors working on a job, make sure they know to document their work and any disputes they may have while on the job.

These ten tips will help reduce the chances of facing a lawsuit – but there is no substitute for having an experienced construction law attorney on your team. Please contact us today if you’d like to learn more!

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!

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

Florida Construction lien law contains many notice and deadline requirements and failure to comply with the requirements of Florida Statute Sect. 713. Unfortunately, a common occurrence among contractors is the attempt to inflate a claim of lien amount due to various reasons, either an attempt to offset potential costs and fees that will be incurred in enforcing the lien or simply to intimidate the property owner to resolve the matter. Many times it is done as a result of the contractor anger in providing work and payment to subcontractors and then having the homeowner fail to make payments to the contractor.

The filing a fraudulent lien in Florida means that a contractor intentionally misstated certain information on the Claim of Lien that is untrue. This action on the part of the contractor can result in severe penalties. The contractor would likely be subject to the loss of his lien and the imposition of attorneys fees against the non-prevailing part. It is strongly recommend to be as accurate as possible when determining the amount of the lien and be certain to have the necessary documents to support the amount detailed in the claim of lien.

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

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

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

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

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

Florida contractors have developed a reputation for have suspect business practices such not completing jobs properly, using inferior quality products and overcharging for works or sub contracting work off to less reputable individuals. Here are some tips that may help you in avoiding being taken advantage of by a contractor.

1. Obtain Multiple Estimates. Contractors will often provide you a low estimate to get the job. Then, as the work progresses they will upsell you on products and services such change orders. Always get a very detailed estimate that includes the cost for materials, labor, fees and the contractor’s profit margin.

2. Create a progress payment schedule. A progress payment schedule incentivizes the contractor in continuing to working on the project. Avoid paying large upfront deposits that incorporates immediate profits. Schedule the payment whereby the contractor receive payment after completing portions of the work.

3. Ask the contractor for references. Find out from others or the contractor himself individuals who have used the contractor in the past. Then, ask those individuals how they heard about the contractor. Ask if you can visit the job to inspect the quality of the work and products used on the job.

4. License Status.  Contact the department of Business and Professional Regulation to see if the contractor’s license is in good standing or the contractor has received complaints from other consumers. Additionally, ask for a copy of the contractor’s insurance policy.

Ray Garcia, Esq.

Board Certified in Real Estate Law

by the Florida Bar

www.Floridaconstructionlawgroup.com

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

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

As tenant’s counsel you want to secure provisions in the lease agreement that the landlord’s build-out work as stated in the plans and specifications consists of items that a landlord may be required to complete by law such as local building code compliance work, structural work, roofing work and ADA compliance. In order to avoid the confusion as to what work would be considered the obligation of the landlord and what build-out work would be considered the obligation of the tenant, you would want the obligations spelled out in the lease agreement. Also, as an additional measure of precaution a tenant may want the landlord to complete his portion of the work at his expense and prior to the landlord turning over possession. This will avoid confusion and disagreements going forward.

Ray Garcia, Esq.

Board Certified in Real Estate Law

by the Florida Bar

www.floridaconstructionlawgroup.com

A lien is a method detailed by statute for a contractor or materialman who has provided labor, materials or services to obtain payment under Florida Statute Section 713. In order to obtain a lien, the contractor or materialman must prepare an affidavit stating that they have not been paid for either the labor, materials or services and that the real property was improved by the labor, materials or services. Florida Statute Section 713 states what types of items are lienable and who is entitled to a lien. Generally, improvements to real property, such as removing, repairing, demolishing excavating and landscaping to name a few are permissable improvements. Also, contractors, architects, interior designers, surveyors, mappers, engineers, materialman, contractors and subcontractors are the types of persons entitled to place a lien on real property.

Ray Garcia, Esq.

Board Certified in Real Estate Law

by the Florida Bar

www.floridaconstructionlawgroup.com

Florida Construction Law Group concentrates in both the prosecution and defense of construction loan foreclosures. In Florida, construction loan foreclosures can become very complex and entirely different from a typical residential loan foreclosures. Typically, construction loans are funded through draw requests, which are based on the progress of the project. Continue reading

A lien is a charge on real property used to secure payment for those who have furnished labor, materials or services to a project. Under Chapter 713, Florida Statutes, liens are affidavits prepared under oath by the lienor stating that the lienor has provided labor, material, supplies or services to improve real property and has not been paid.

There are several requirements for a Claim of Lien: Continue reading