This article offers several useful points to consider when drafting a contract to build a LEED project. So far there have been 13 lawsuits in the U.S. about LEED buildings. The developer, in a recent one, is seeking $1.3 million in damages from the architect because the building failed LEED certification. Read the article here:
Mayor Michael Nutter is using stimulus money to fund the $27 million program. The program offers gap financing for shovel-ready projects, loans for energy-efficient improvements, and rebates for Greenworks. Information sessions will be held on February 5th and applications are available through the City’s website.
Sharmil McKee | Business Lawyer | blog@mckeeoffice.com
A property owner was entitled to the minimum variances necessary to accommodate her proposed structure to replace a dilapidated camper on her lot. The owner had a pre-existing nonconforming use for the property for use as a weekend/vacation camp. Given the size and configuration of her lot, the property owner could not locate the structure necessary to the continuation of her pre-existing use in compliance with the setbacks or the lot area requirements of the zoning ordinance. Robertson v. Henry Clay Tp. Zoning Hearing Bd., (Pa.Cmwlth.) November 28, 2006.
What does this mean to business owners? The Zoning Board has some boundaries to its power to regulate the zoning ordinance. So, if you have recently applied for a zoning variance, and the board denied it, you have additional option.
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In June, the Governor Rendell signed a new law that becomes in effect on January 1st. The new law empowers sub-contractors and suppliers with the right to place a lien against a property if the owner or general contractor does not pay the sub-subcontractor for his/her work. The old law limited this right to the prime contractor and the sub-contractor.
The purpose of the law is to protect sub-subcontractors, title insurance companies, and mortgage lenders who finance development projects. Owners are now motivated to pay a lien regardless of whether they dispute the claim because liens cloud the property title and interfere with the owner’s ability to sell the property after the lien is attached.
While sub-subcontractors celebrate the new law, owner-developers are not so happy. The law now broadens the class of people who can file a mechanics lien. In addition the law limits a developer’s ability to protect her property from a mechanic’s lien. In the past, a developer and a sub-contractor could sign a waiver relieving the parties of their right to file a mechanic’s lien. The new law enforces a waiver only if the developer purchases a bond equal to 1% of the project.
How will this law work?
An owner-developer purchases a residential lot. The developer sub-contracts with Company Builder to builder the homes. Company Builder in turn contracts with Dry Wall Company to put up the walls for the new homes. Dry Wall Company orders 300,000 nails from Nail Supplier in China. After the nails arrive, Dry Wall Company refuses to pay Nail Supplier because the Company Builder did not pay Dry Wall Company for its work. Who can file a mechanic’s lien against the property? The Nail Supplier and Dry Wall Company can file. The owner-developer will be forced to pay Nail Supplier and Dry Wall Company directly to protect the property’s title, even though the developer only has a contract with Company Builder.
How can I protect my property from a mechanic’s lien?
To prevent this from occurring, a developer will have to purchase a bond worth at least 1% of the project and get signed waivers from all the sub-subcontractors and suppliers working on the project.
If you need help determining whether this law applies to your company, please call or email me. We offer free consultations regarding this and others legal issues. Call today or chat online, privately, with an attorney every Monday through Friday from 8 a.m. to 8 p.m. at www.mckeeoffice.com
If you are a subcontractor working on a property, you can lodge a mechanic’s lien against the property. First you must send a written, signed letter demanding payment with a deadline for the contractor to comply. If he/she doesn’t pay, then file a lien. A lien is just a mark on the property’s title. It doesn’t guarantee payment. However, it does place pressure on the property owner to settle your dispute to keep the title clear.
You can on the other hand, sue the contractor. If you are in Philly and your claim is under $10,000, you can sue in small claims court. The result will be a judgment in your favor. A judgment doesn’t guarantee payment, either. It’s just a document declaring that the contractor legally owes you money. However, with a judgment you can garnish money from the contractor’s bank account, if he/she has a bank account.
If you suspect that your contractor has run out of money, then the new bankruptcy laws allow you force a business into bankruptcy. It’s very complicated process, but a serious option if your contractor owes you a large sum of money.
If you are fortunate enough to be working on a government contract, the contractor was required to post a bond to qualify for the contract. A bond is like an insurance policy. File a claim for payment with the contractor’s bonding company.
My business advice to you would be to speak with an attorney about the details of your situation and map out a cost-effective, yet realistic plan to get your money.
Sharmil McKee | Business Lawyer | blog@mckeeoffice.com
