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FL Construction Law Authority

Public Contracting: When Can I Be Heard?

Posted in Procurement, Public Construction

461991811Bidders may have an opportunity to be heard during evaluation committee meetings or in conjunction with other proceedings during a competitive solicitation process.  Members of the public also have the right to a reasonable opportunity to be heard in accordance with a recently enacted Florida Statute, Section 286.0114.

Section 286.0114 went into effect on October 1, 2013, and provides that members of the public have a right to be heard on a proposition before a Florida “board or commission” takes official action.  The opportunity to be heard does not need to occur at the same meeting that the official action takes place, so long as it occurs during the decision making process and is within reasonable proximity in time before the official action is taken.  The board or commission may, however, adopt rules or policies, including limitations on the amount of time that an individual may speak and the number of persons who may speak on behalf of the same group.

As bidders are also members of the public, if the need arises to speak for or against a contract award, the new law provides another avenue to voice your concerns before a final decision is made.  Prior to stepping up to the microphone, however, you should confirm with the agency’s clerk as to whether there are any rules or procedures that have been adopted.  For example, there may be a form that you will need to fill out prior to speaking.

The Anatomy of a Water Leak

Posted in Construction Defects, Insurance

For those of us who live or work in a condominium, it is easy to lose sight of all of the infrastructure that operates behind the scenes to make a condominium a home.  When that infrastructure fails, it can be inconvenient, or it can easily be disastrous in the case of a water leak.  While the damage from a water leak can be immense, there are ways to avoid or at least reduce the impact from them, if you are proactive before and after they occur, and know your rights and responsibilities.  

Taking steps like establishing inspection, maintenance and replacement schedules, and installing water leak detection systems, air conditioner pan alarms and remote sensors wired to master valve shut-offs can prevent problems from becoming a disaster.  In the event of a water leak, condominium associations should take advantage of their right to access units to protect common elements and other units, and prevent mold from forming.  Both the association and all affected unit owners should notify their respective insurance companies immediately, in writing, so their carriers’ adjusters can inspect the damage and advance cleanup, dry-out and repair costs.

While there might be a dispute over which insurance company should pay for what damage, as long as the required maintenance and replacements were performed and the damage was not the result of intentional conduct or negligence, some insurance coverage should apply to defray the financial impact of the leak.  Alternatively, taking the appropriate steps before and after a leak will enable the impacted parties to hold accountable those entities truly responsible for the leak, like contractors, suppliers and service providers.

The foregoing issues and others will be addressed during a continuing education course presented by Becker & Poliakoff, P.A. attorneys Lisa Magill and Ryan Carpenter on April 24, 2014 from 9:00am to 11:00am at 1 East Broward Boulevard in Fort Lauderdale, Florida (CAM credit available).  If you would like to attend, please register online by clicking here: http://callbp.com/event_registration.php?event_id=321.

Cutting-Edge Tools Can Save Owner Headaches…And Money

Posted in Articles, Construction Defects

179300577Construction lawyers throughout the country have long preached the importance of proper construction documentation to owners and developers alike. Comprehensive documentation of a project is essential to protect owners; especially in the quick-build environment we are experiencing now.

Fortunately, there are several companies providing powerful tools that are invaluable to the mitigation of claims and overall protection of the owner and/or developer. One example is Multivista, a leader in photographic construction documentation. Multivista offers state-of-the-art construction photography and video documentation. Their products include interactive visual as-built documentation, construction webcams, and inspection-grade photos of the project.

Other core competencies include “Facility Management Information,” which is the process of converting documentation manuals and warranty information into an indexed, integrated system that is accessible via computer. Put more simply, imagine if a building manager could scan building components such as doors and windows to immediately pull up installation and warranty information. The result is a fully integrated “virtual building” that allows workers to access a visual model of the facility and all available facility information.

This level of project documentation is supportive during construction disputes and assists the attorneys and experts reach a speedy resolution. The technologies, although costly, marry construction and information in a time when some owners are even mounting webcams on top of hard hats to tell if a worker is lying down or taking a nap. They present a more practical approach to necessary construction documentation and also include real-time components. Owners using these tools are able log into an online interface remotely and monitor actual job site conditions anytime, anywhere. This is priceless.

Green Construction Contract Concerns

Posted in Contracts, Green Building

Many contracts used in green building projects are not always ideal for green building projects.  Often, contractors, design professionals, or owners will use their old standard construction contracts.  But those forms might not take into account some of the nuances or issues that can arise on a sustainable project.

For example, green building contracts should strive to be more specific about what the green goal is.  Terms like “green building”, “sustainable building” or “high-performing building” lack the specificity of what the goal is.  Further, it is not enough for the owner to say it wants LEED platinum rating, or LEED certified, or Green Globe?  There is a difference.  Or, maybe the goal is to save money on electricity, or to reduce the amount of water consumed.  Those should be specifically identified, so if the goal is not achieved, there will not be confusion as to what the goal was.  Confusion often leads to a dispute, which often leads to litigation.

The contract should also reflect who is responsible for achieving the project’s green goals.  It can be the architect, an engineer, or contractors and sub-contractors or suppliers.  Each segment of the construction project should be aware of what responsibilities it is undertaking in the green building process.  And, they may want to get paid more for taking on the added risk.

 The aforementioned should also be aware of what guarantees they are making in terms of sustainable performance or certification.  If an architect undertakes the responsibility of achieving a certain level of certification, and that goal is not met, the contract should be clear about what the repercussions are.  Or, the contract can address what happens when a component such as an HVAC system does not achieve the level of performance a contractor represented.  If the contract is silent, the design professional, contractor, or whomever may find themselves facing a lawsuit for breach of contract.

 In some cases, an alternative to a guaranty is to allow for performance bonuses based on the certification or performance levels achieved.  In other words, a contract will describe a base fee for services on the project, and then allow for additional compensation depending on level of certification the building gets, or based on the level of performance of the building after occupancy.  This is helpful because it can be difficult to guaranty these levels on certain projects.

 There are some form contracts out there that are tailored for green construction projects.  But just about every project is unique and generally there is no one size that fits all.  So, before you sign that green building contract, whether you are an owner or part of the construction team, and whether its for new construction or even a renovation or retrofit, make sure you are contractually protected, and that everyone is on the same page as to the green goals.

FTC’s Green Guides Help Guide Owners, Contractors and Design Professionals

Posted in Building Codes, Green Building

Set of bio, eco, organic sticker elementsThis post originally appeared in “The Green Building Law Blog

Being green is not always straightforward.  There are many products on the market, related and non-related to building, that make claims about their environmental benefits and impacts.  There are many service providers that make similar claims.  But not all products and services live up to their billing.  Companies marketing themselves or their products as environmentally friendly will have
to better qualify those statements, in light of Federal Trade Commission’s Green Guides.

The Green Guides have been around since 1992.  The latest version was updated in 2012.  They “outline general principles that apply to all environmental marketing claims and provide guidance regarding many specific environmental benefit claims.”  The purpose is to cut down on deceptive practices regarding green marketing.  The Green Guides are not law and are not independently enforceable.  But, the FTC can take action if someone or some entity makes an environmental claim inconsistent with the guidelines.

When you come across a product with a green certification seal, for example, from an independent third party, that has to meet the endorsement requirements in the Green Guidelines.  When you come across materials from a provider of a product, make sure the product is certified.  For instance, if you get a manufacturer’s or vendor’s sales brochure for overhead lighting and it has a seal that says “EcoFriendly Building Association” find out what is being endorsed.  If the lighting manufacturer or vendor is just a member of that association, that does not mean that the association evaluated that product.  It may not have any environmental benefits.  Consumers should also make sure that if a product is endorsed by a independent third party, that the certification is legitimate.

The Green Guides has sections focusing on claims such as carbon offsets, non-toxic products, renewable energy, ozone-friendly, recyclable, and renewable materials.  You can see the latest Green Guides by clicking here.

Florida Public Bidders Must Understand the “Cone of Silence”

Posted in Procurement, Public Construction

186956838(1)In Florida, public agencies typically have restrictions on bidder communications with public officials and employees. For example, an agency may have a prohibition on communicating with anyone other than a designated representative during the competitive solicitation process. These restrictions are often referred to as a “Cone of Silence”. Violations of the Cone of Silence can result in disqualification of the bidder.

The purpose of a Cone of Silence is to prevent bidders or their representatives from lobbying decision makers while designated staff are afforded the opportunity to evaluate the bids or proposals in accordance with the terms of the solicitation. The restriction on communications may, for example, terminate when the agency’s board or commission meets to make a final decision. At that time the bidder may be able to address the board or commission directly before it makes a final award decision. While the restriction is in place, however, bidders must be extremely careful not to violate the Cone of Silence.

Determining whether a Cone of Silence applies to a particular competitive solicitation may be as easy as reviewing the solicitation document itself. If, however, the solicitation is silent on the issue, it may require some legal research into the applicable agency code, regulations or policies. Even if not stated as a Cone of Silence or restriction on communications, the solicitation document may provide instructions on which agency representative may be contacted for purposes of answering questions.

Considering the potential ramification of an unauthorized communication with a public agency, bidders should be determine whether and to what extent the particular public agency has a restriction, and strictly adhere to any instructions provided for purposes of contacting the agency. Failure to adhere to the restriction on communications could lead to an unnecessary loss of a contract.

Safety First: Public Safety vs. Due Process

Posted in Construction Defects

Does public safety take precedence over due process in a pending litigation? An on-going construction defects case in Las Vegas, Nevada recently addressed this concern.  Clark County District Judge Elizabeth Gonzalez recently approved a petition to demolish the Harmon Hotel—a never-opened 26-story structure fronting Las Vegas Boulevard between the Crystals shopping center and the Cosmopolitan resort—acknowledging the public safety risk if the building were to collapse during an earthquake.

The Harmon was originally was designed to be a 40-story boutique hotel but has sat unfinished, as a costly Cirque du Soleil billboard since construction was halted in 2010 after the discovery of defects involving missing or improperly installed reinforcing steel.  The owner, CityCenter, blames Tutor-Perini, the general contractor and its subcontractors saying demolition is the surest way to deal with the dangerous structure.  The general contractor was sure the Harmon could be repaired and claims CityCenter is just trying to get rid of a building it doesn’t need given the current state of Las Vegas economic situation.  Thus, we have litigation.

The outcome of this case is to an extent dependent on finding sufficient evidence of irreparable defects that can be extrapolated across the entire structure with a high confidence. This type of evidence is usually accomplished through destructive testing.  However, despite the general contractor’s request for additional destructive testing…to obtain a higher confidence, the Judge ruled in favor of public safety.  The court filing noted that “the Harmon tower will be severely damaged during a major earthquake and critical structural elements, such as transfer elements, are likely to fail and lead to a partial or complete collapse of the tower.”

The lengthy court document approving demolition predicted a 50% chance of such a quake within 30 years.  This type of reasoning illustrates the Court felt that there is a point where the safety of the public trumps any due process concerns the general contractor may have.

A Condominium Association Must Beware of Deadlines to Sue For Building Defects

Posted in Construction Defects

By Scott Kiernan

Halloween is a spooky time of year.  But Condominium Associations in Florida should always beware of looming deadlines if it believes it was saddled with construction defects before turnover from the developer.  Condominium owners in Florida are very fortunate to have various legal rights for construction defects against the parties responsible for the selling, design and construction of a Condominium unit.  If the construction defects are widespread throughout the Condominium property, the Condominium Association can bring onstruction defect claims on behalf of all owners.  However, nothing lasts forever, especially the right to sue for building defects. 

In Florida, the time frame (Statute of Limitations) within which a Condominium Association may file a lawsuit for construction defects on behalf of its owners is only 4 years from the time the Condominium Association knew or should have known of the defect(s).  But what if that 4 years has passed and new defects are just discovered?  There may still be time.  A Condominium Association may still pursue a claim for latent defects.  A latent defect is a one which is not discovered through the exercise of due diligence, for the period of 4 years from the time the defect was actually discovered.  But this too does not last forever, because of something called the Statute of Repose.  While the Condominium Association may still be able to file a lawsuit under the Statute of Limitations for 4 years from the time the defect was discovered, the Statute of Repose cuts off all construction claims after 10 years, preventing a construction defect lawsuit from being filed after 10 years from the date the building received its original Certificate of Occupancy.

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Top 10 Questions Regarding Condominium Construction Defects

Posted in Construction Defects, Contracts

The following are the 10 most frequently asked questions by Condominium Associations that are facing potential claims for construction defects:

1.    What is a construction defect?
Construction defects can be classified into three categories:  defective building material; faulty workmanship; and improper design.

2.    Who is responsible for the construction defect?
The developer, design professional, and contractor may all be responsible. Historically, the law has recognized that the various participants in the construction process are liable only for those defects that fall within their respective areas of expertise. For example, a contractor who builds a structure according to the design supplied by the owner generally is not responsible for the adequacy of the design.

3.    What warranties should the Association be aware of?
In addition to express written warranties received from the developer and contractors, the Association should be aware of warranties provided by the Condominium Act. The Condominium Act provides implied warranties in favor of individuals who purchase their units from the developer. The warranties as to the developer, run 3 years from completion of the building, (usually measured by the issuance of the Certificate of Occupancy) or 1 year from transition of control from the developer to non-developer unit owners but in no event more than 5 years from completion of the building. There is also a common law implied warranty under which the Association can make claims for a period up to 4 years from transition.

The warranties as to the developer are as follows:

-    As to the roof and structural components of a building or other improvements and as to mechanical, electrical, and plumbing elements serving improvements or a building, except mechanical elements serving only one unit, a warranty for a period beginning with the completion of construction of each building or improvement and continuing for 3 years thereafter or 1 year after owners other than the developer obtain control of the association, whichever occurs last, but in no event more than 5 years.

-    As to all other improvements for the use of unit owners, a 3 year warranty commencing with the date of completion of the improvements.
Contractors, subcontractors, and suppliers all grant warranties as to work or materials supplied as follows:

-    For a period of 3 years from the date of completion of construction of a building or improvement, a warranty as to the roof and structural components of the building or improvement and mechanical and plumbing elements serving a building or an improvement, except mechanical elements serving only one unit.

-    For a period of 1 year after completion of all construction, a warranty as to all other improvements and materials.

4.    How do we prove that a construction defect exists?
In most cases, the Association will need to hire the services of an independent expert. Experts are those who have the necessary training, education, and experience to give testimony in court as to the cause of a defect. For example, if your roof leaks, a roof expert who has designed roofs, evaluated other defective roof systems, and knows how roofs should be built would be in a good position to testify. A general or roofing contractor can repair a damaged roof, but he may not be the best person to act as the expert.

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New Public Records Requirements for Contracts with Public Agencies

Posted in Procurement

The Florida Legislature recently enacted Florida Statutes, Section 119.0701 (Chapter 2013-154) which requires that contracts for services with public agencies, where the contractor is acting on behalf of the agency, must provide a provision mandating compliance with the public records laws.  Specifically, Section 119.0701(2) mandates that the provision require the contractor to:

(a) Keep and maintain public records that ordinarily and necessarily would be required by the public agency in order to perform the service.

(b) Provide the public with access to public records on the same terms and conditions that the public agency would provide the records and at a cost that does not exceed the cost provided in this chapter [119] or as otherwise provided by law.

(c) Ensure that public records that are exempt or confidential and exempt from public records disclosure requirements are not disclosed except as authorized by law.

(d) Meet all requirements for retaining public records and transfer, at no cost, to the public agency all public records in possession of the contractor upon termination of the contract and destroy any duplicate public records that are exempt or confidential and exempt from public records disclosure requirements. All records stored electronically must be provided to the public agency in a format that is compatible with the information technology systems of the public agency.

Based upon the above, we would expect that public agencies will include the above requirements in contracts going forward, and contractors should adopt internal procedures to ensure compliance with the public records law. The above requirements essentially put the contractor in the shoes of the public agency with respect to public records requests, and contractors will need to be prepared to respond accordingly. Further, it will be very important for contractors to become familiar with the exemptions to the public records law, which are generally set forth at F.S. 119.071.

As referenced above, this requirement applies to those contractors who are “acting on behalf” of the public agency. The determination as to whether the contractor is acting on behalf of the public agency must be made on a case by case basis.