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At Long Last, the Colorado Legislature Gets Serious About Construction Defect Reform – In a Constructive Way

February 12, 2024 — David McLain - Higgins, Hopkins, McLain & Roswell, LLC
On February 5th, Senators Zenzinger and Coleman, along with Representative Bird, introduced Senate Bill 24-106 into the Colorado Legislature. The bill has been assigned to the Senate Committee on Local Government and Housing. What follows are the various portions of the bill I believe to be the most impactful, as described in the bill summary, along with my commentary thereon: Sections 3 and 6 – A True Right to Repair Sections 3 and 6 create a right for a construction professional to remedy a claim made against the construction professional by doing remedial work or hiring another construction professional to perform the work. The following applies to the remedy:

The construction professional must notify the claimant and diligently make sure the remedial work is performed; and
Upon completion, the claimant is deemed to have settled and released the claim, and the claimant is limited to claims regarding improper performance of the remedial work.

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Reprinted courtesy of David McLain, Higgins, Hopkins, McLain & Roswell, LLC
Mr. McLain may be contacted at mclain@hhmrlaw.com

Former NYC Condo Empire Executive Arrested for Larceny, Tax Fraud

March 11, 2024 — Ava Benny-Morrison - Bloomberg
A former New York executive facing lawsuits over the collapse of real estate empire HFZ Capital Group has been arrested in Miami, charged with grand larceny and tax fraud. Nir Meir, 48, was arrested Monday, a spokesperson for the Miami-Dade Police Department confirmed. Meir was detained on an out-of-state warrant, suggesting his arrest may be the result of an investigation by law enforcement in New York. A spokesperson for the Manhattan District Attorney’s Office didn’t immediately respond to a request for comment. Meir’s attorney also didn’t immediately respond to an email. Meir, the former managing principal of HFZ Capital Group, has been battling multiple lawsuits in New York over his involvement in the once-prominent real estate firm. He’s denied wrongdoing. Read the full story...
Reprinted courtesy of Ava Benny-Morrison, Bloomberg

AAA Revises its Construction Industry Arbitration Rules and Mediation Procedures

April 02, 2024 — Garret Murai - California Construction Law Blog
This one is for the lawyers. Or for those of you who are claims-minded . . . Effective March 1, 2024, the American Arbitration Association (“AAA”) revised its Construction Industry Arbitration Rules and Mediation Procedures. For those involved in construction, this is important since the AAA Rules are the default arbitration rules contained in AIA form contracts and are often the arbitration rules referenced in other construction contracts as well. So, what are the changes?

General: Fax numbers have gone the way of the Dodo bird and replaced by email addresses for all parties. Also, while already done in practice, preliminary hearings may now be held via videoconference in addition to telephone and in-person (Rule R-23).

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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

Real Estate & Construction News Roundup (09/12/23) – Airbnb’s Future in New York City, MGM Resorts Suffer Cybersecurity Incident, and Insurance Costs Hitting Commercial Real Estate

October 30, 2023 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
In our latest roundup, the FDIC handles the portfolio from Signature Bank, the U.S. Army Corps of Engineers funds a new center at Illinois, the Athletics take their next steps in their move to Las Vegas, and more!

For those looking to rent an Airbnb for future travel to New York City, it just became much harder with new rules taking effect on September 5th. (Natalie Lung, The Washington Post)
This past weekend MGM Resorts suffered a cybersecurity incident that affected some of the company’s systems with the extent of the incident still unknown. (ABC)
Among issues such as rent increases and general inflation, commercial real estate is also having to contend with rising insurance costs due to climate change. (Justin Worland, Time)

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

Real Estate & Construction News Roundup (1/30/24) – Life Science Construction to Increase, Overall Homeownership Is Majority Female, and Senators Urge Fed Chair to Lower Interest Rates

February 26, 2024 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
In our latest roundup, hospitality and real estate companies create living options, SEC questions some financial institutions on exposure to risks from CRE, renting shows signs of overtaking buying in the housing market, and more!

For generations, buying has almost always been favored over renting when it comes to housing, but with a tough real estate market, that might be changing. (Geoff Bennett and Dorothy Hastings, PBS)
Single women own more homes than single men, and overall homeownership is now majority female. (Brianna Crane and Alice Feng, Axios)
The SEC is asking smaller financial institutions, including community and regional banks, about their exposure to risks from commercial real estate in their loan portfolios. (S.J. Steinhardt, The New York State Society of CPAs)

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

Critical Updates in Builders Risk Claim Recovery: Staying Ahead of the "Satisfactory State" Argument and Getting the Most Out of LEG 3

December 11, 2023 — Gregory D. Podolak & Cheryl L. Kozdrey - Saxe Doernberger & Vita, P.C.
Builders risk claims routinely involve complicated and aggressive debate about the interplay between covered physical loss and uncovered faulty work. However, denials on this front have recently experienced a noticeable uptick in frequency, creativity, and aggressiveness. The insurer arguments concentrate in two key areas with a common theme – that any damage associated with a construction defect is not covered:

Defective construction does not qualify as a “physical” loss to trigger the insuring agreement; and
Any natural results of defective construction are excluded as faulty workmanship, even with favorable LEG 3 or similar language.

Neither of these arguments should impede access to coverage in the majority of scenarios. To ensure as much, it is incumbent on the savvy policyholder to understand the insurer tactics, be prepared to spot them early, and have thoughtful counter positions at the ready to address them decisively. Reprinted courtesy of Gregory D. Podolak, Saxe Doernberger & Vita, P.C. and Cheryl L. Kozdrey, Saxe Doernberger & Vita, P.C. Mr. Podolak may be contacted at GPodolak@sdvlaw.com Ms. Kozdrey may be contacted at CKozdrey@sdvlaw.com Read the full story...

John Paulson’s $1 Billion Caribbean Empire Faces Betrayal

November 27, 2023 — Jim Wyss & Tom Maloney - Bloomberg
In the decade since hedge fund billionaire John Paulson took a grand gamble on Puerto Rico, he’s faced the wrath of the markets and mother nature. He’s navigated hurricanes, earthquakes, the pandemic and the largest municipal bankruptcy in US history to amass a portfolio of luxury hotels and resorts, high-end office blocks, and auto dealerships catering to the island’s rich. Now, just a few months after breaking ground on one of San Juan’s tallest and most exclusive residential towers, Paulson is facing a new wave of threats: lawsuits that strike at the heart of his Caribbean empire. Reprinted courtesy of Jim Wyss, Bloomberg and Tom Maloney, Bloomberg Read the full story...

More In-Depth Details on the Davis-Bacon Act Overhaul

November 06, 2023 — Seth C. Wiseman & Angela M. Richie - Construction Executive
The U.S. Department of Labor’s finalization of a rule updating the Davis-Bacon Act, the federal law that governs how prevailing wages for federal construction projects can be determined, will have a significant impact on contractors and workers alike in the construction industry. The new rule, in effect, adopts the 30% rule, meaning that the prevailing wages must be equal to the wage paid to at least 30% of workers of a particular classification in a particular area. The new rule also implements a new anti-retaliation provision, specifically protecting construction workers who raise concerns about payment practices from adverse employment actions. The timing of this new rule is particularly significant for contractors, as it will likely raise the cost of labor for contractors at a time when the Infrastructure Investment and Jobs Act and the CHIPS Act are providing additional funding for federal projects across the country. Thus, it is important for all parties in the construction industry to understand the updated rule in order to evaluate the short-term impacts on their respective projects and long-term impact on their respective businesses. Reprinted courtesy of Seth C. Wiseman & Angela M. Richie, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Mr. Wiseman may be contacted at swiseman@grsm.com Ms. Richie may be contacted at arichie@grsm.com Read the full story...

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