Seattle Washington Building Consultant Directory

Surety Trends to Keep an Eye on in the Construction Industry

March 25, 2024 — Oliver Craig - Construction Executive
Reflecting on the dynamics of the 2023 construction and surety industries, it is evident that opportunities and challenges have emerged for contractors that will shape the landscape for the year ahead. Contractors can not only capitalize on these trends but protect the successful companies they have already built. PROJECT OPPORTUNITIES There has been a notable increase in public works opportunities, driven by increased government spending and the aging infrastructure in the United States. This trend is expected to continue in 2024 and beyond, with a notable portion of work coming in transportation- and public-utility-related infrastructure. Due to increased spending, many contractors are reporting historically high backlogs—and that often includes the largest project their company has contracted in their history. While increased spending presents more opportunity, it’s critical contractors be even more diligent about new opportunities, giving additional consideration to the following: Job Selection: New geographies, scope, project owners and/or subcontractor relationships commonly come with a learning curve. With the current state of the market, it’s not the ideal time to be learning costly lessons. Contractors should focus on having a proactive go/no-go strategy when reviewing potential projects to identify risks early and plan accordingly. Reprinted courtesy of Oliver Craig, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the full story...

A Termination for Convenience Is Not a Termination for Default

April 22, 2024 — David Adelstein - Florida Construction Legal Updates
A termination for convenience is NOT a termination for default. They are NOT the same. They should NOT be treated as the same. I am a huge proponent of termination for convenience provisions because sometimes a party needs to be able to exercise a termination for convenience, but the termination is not one that rises to a basis for default. However, exercising a termination for convenience does not mean you get to go back in time and convert the termination for convenience into a termination for default. It does not work like that. Nor should it. An opinion out of the Civilian Board of Contract Appeals – Williams Building Company, Inc. v. Department of State, CBCA 7147, 2024 WL 1099788 (CBCA 2024 – demonstrates a fundamental distinction between a termination for convenience and a termination for default, i.e., that you don’t get to conjure up defaults when you exercise a termination for convenience:

Because a termination for convenience essentially turns a fixed-price construction contract into a cost-reimbursement contract, allowing the contractor to recover its incurred performance costs, the resolution of this appeal will involve identifying the total costs that [Contractor] incurred in performing this contract before [Government] terminated it for convenience. Since [Government] terminated the contract for convenience rather than for default, it no longer matters whether, in the past,[Contractor] acted intentionally in overstating the amount of its incurred costs or committed a contract breach. Ultimately, as permitted in response to a termination for convenience, [Contractor] will recover those allowable costs that [Contractor]establishes it incurred in performing the contract.

Williams Building Company, supra.

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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

Evaluating Construction Trends From 2023 and Forecasting For 2024

February 12, 2024 — Jason Feld & Dominic Donato - Kahana Feld
As we begin 2024, it is informative to evaluate what transpired in 2023 in the construction industry, and especially the use of construction technology. 2023 ushered in a variety of newly implemented construction technologies including 3D printed entire houses, improved wearables that detect all aspects of the construction worker from location to temperature to heart rate, increased use of modular construction for entire apartments, hotels, and condominium projects, and eco-friendly and conservation minded technologies to minimize carbon footprint, water preservation and sustainable construction methods, to name a few. 2023 also identified some significant issues in the construction industry. First and foremost, the labor shortages and hiring of skilled and qualified workers continued to be an issue resulting in increased delays, construction accidents, and project mismanagement. The skyrocketing interest rates, decline in commercial/office projects, supply chain issues, material price fluctuation and increase changes in scope of projects all negatively impacted the construction industry in 2023. There is also the demand for renewable and infrastructure projects put strain on construction resources as the projects became “mega” with larger and more complex construction leading to multi-party, high dollar, and more complex claims. Finally, there is a growing trend of construction claims and litigation being financed by third party litigation funding sources for personal/bodily injury claims and construction defect claims. Reprinted courtesy of Jason Feld, Kahana Feld and Dominic Donato, Kahana Feld Mr. Feld may be contacted at jfeld@kahanafeld.com Mr. Donato may be contacted at ddonato@kahanafeld.com Read the full story...

US Homes Face Costly Retrofits for Induction Stoves, EV Chargers

May 20, 2024 — Kendra Pierre-Louis - Bloomberg
Buyers of new homes in the US may find themselves saddled with electrical systems better suited to the 20th century than the 21st. The International Code Council, which sets model construction standards for new homes, was expected to include building electrification measures in its 2024 energy code on March 20. But following appeals lodged by industry groups, the ICC board moved the measures to the code’s appendices, effectively making them optional, as first reported by the Huffington Post. If new homes aren’t wired for increasing power needs from electric appliances and car chargers, it will bump the effort and cost of making such upgrades onto homeowners — a deterrent to going electric. Energy efficiency advocates say this could slow the pace of the energy transition, costing both jobs and the planet. Read the full story...
Reprinted courtesy of Kendra Pierre-Louis, Bloomberg

No Coverage for Construction Defect Claim Only Impacting Insured's Work

January 08, 2024 — Tred R. Eyerly - Insurance Law Hawaii
In a coverage dispute between two insurers over a claim for damages caused by faulty workmanship, the court found there was no right to equitable contribution or indemnity. Travelers Prop. Cas. Co. of Am. v. Mallcraft, Inc., 2023 Cal. Super. LEXIS 67568 (Cal. Super. Ct. Sept. 15, 2023). Mallcraft was the general contractor for a building project and was sued for construction defects. Travelers was an additional insured under a policy issued to a subcontractor, KitCor. Travelers defended Mallcraft in an arbitration. Travelers sought equitable contribution and equitable indemnity from Hartford, Mallcraft's insurer. Mallcraft and Travelers stiulated to a judgment agianst Mallcraft for all costs Travelers incurred in the arbitration. Travelers' insured, KitCor, was not implicated in the construction defect claims against Mallcraft. The judgment set forth findings, including the fact that the underlying plaintiff never made any claim that KitCor perfomred work on the project or casued property damage. Read the full story...
Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Largest Dam Removal Program in US History Reaches Milestone

December 11, 2023 — Mary K. Miller - Engineering News-Record
All work associated with removal of the first of four hydroelectric dams slated for demolition on the Klamath River completed in early November, according to the dam owner, Klamath River Renewal Corp. Demolition of the four dams on the Klamath River that flows through parts of Oregon and California is the largest dam removal project in U.S. history. Reprinted courtesy of Mary K. Miller, Engineering News-Record ENR may be contacted at enr@enr.com Read the full story...

Real Estate & Construction News Roundup (1/24/24) – Long-Term Housing Issues in Hawaii, Underperforming REITs, and Growth in a Subset of the Hotel Sector

February 19, 2024 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
In our latest roundup, commercial real estate’s relationship with technology, towns and cities across the country prevent dollar stores from opening, empty offices and other commercial buildings are reused for housing, and more!

Between 1988 and September 2023, the hotel room supply in the select service and extended stay hotel sector has increased by 60% greater than full-service hotel room supply growth. (Michele Laufik, Hotel Dive)
With high mortgage rates and home prices, would-be buyers are understandably looking for deals — even if they need to move to a different city, state or region to find them. (Ana Teresa Solá, CNBC)
Roughly 60 towns and cities have made changes to their zoning laws since 2018 to prevent dollar stores from opening within their limits. (Alex Bitter, Business Insider)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

Recent Florida Legislative Changes Shorten Both Statute of Limitation ("SOL") and Statute of Repose ("SOR") for Construction Defect Claims

March 19, 2024 — Holly A. Rice - Saxe Doernberger & Vita, P.C.
The Florida Legislature and Governor DeSantis passed Senate Bill 360, effective April 13, 2023, which imposes significant changes to Florida’s statute of limitation (“SOL”) and statute of repose (“SOR”) periods prescribed in Florida Statute § 95.11. In short, the SOL and SOR periods will commence earlier and run earlier, which in effect shortens the time to bring a construction defect claim on both ends of the timeline.1 These changes will have positive impacts for general contractors who may save on insurance premiums with shorter completed operations tails. In other words, the timeframe within which contractors are at risk of being sued for construction-related errors is significantly reduced under the new version of the statute. Owners and developers, on the other hand, may feel that the increased pressure of uncovered construction defects necessitates the filing of lawsuits sooner than they might have otherwise filed. Collectively, all parties involved will certainly have to consider when and how to place their carriers on notice of claims or potential claims and, coupled with Florida’s sweeping changes to fee shifting statutes, insured parties may see more coverage denials which, in turn, could lead to more coverage actions.2 Read the full story...
Reprinted courtesy of Holly A. Rice, Saxe Doernberger & Vita, P.C.
Ms. Rice may be contacted at HRice@sdvlaw.com

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