1. Disclaimer

    Disclaimer: Nothing in this blog should be interpreted as a substitute for professional advice from an attorney practicing in your community. Only local counsel can appreciate the business and legal environment under which a construction contract is drafted, negotiated and executed. Gary W. Moselle represents Craftsman Book Company, publisher of Construction Contract Writer.
  2. Wage Theft in New York

    New York construction contractors get a new headache on January 4, 2022. New code sections make prime contractors liable if subs don’t pay their employees or independent contractors. Hold your breath and think about that for a second. Suppose you’ve paid your subs on a project and have a full book of lien releases. Then, surprise! A sub’s employees, tradespeople you’ve never met, sue your company for back wages on the job. That’s an entirely new risk category. Effective January 4, New York General Business Law § 198-E makes contractors liable for wages owed and not paid by subcontractors at any level. The “Wage Theft” law is very broad – covers both commercial and public works jobs. “Wages” includes both pay and benefits. Only home improvement and residential construction of ten units or less are excluded. Any employee owed wages by a sub can file suit against the prime contractor and collect both back wages and the cost of bringing suit. And consider this: the right to sue for back wages doesn’t expire for three years. That’s long after the project has been closed out. Contractors don’t set pay dates or pay policies for subcontractors. They don’t get advance notice when a sub’s running short of cash. Yet, somehow, the new law makes prime contractors responsible if a sub’s employees don’t get paid. How does this make sense? Here’s how. Effective January 4, 2022, New York contractors have a new responsibility – checking to be sure everyone on the job is getting paid. That’s New York General Business Law § 756-f. Section 756-f gives contractors the right to demand certified employee payroll records from their subs – covering both employees and those working as independent contractors. Failure to provide these records is a defense to any claim of non-payment. Problems With the New Law Continue reading →
  3. Awarding Damages in Florida

    Mike Judet's South Florida home was severely damaged by lightning in 2016. He accepted an offer from Cano, Inc. of West Palm Beach to make the repairs. The contract price was $300,000, payable in $30,000 installments. Cano started work. Judet made the first three payments, $90,000. Then Judet discovered a problem. Cano hadn’t bothered to take out a permit on either the plumbing or electrical work. Cano and Judet couldn’t agree on what had to happen next. So Judet stopped paying and terminated the agreement. Cano slapped a $40,000 lien on the project and sued for breach of contract. Judet’s counterclaim alleged breach of contract, asked for discharge of the lien and restitution of the amount paid in excess of the value of work completed. Now What? Continue reading →
  4. Mistakes in the Plans

    I’m old enough to remember when plans were drawn by hand. A designer who wanted a particular detail had to physically draw that detail line by line, considering each line as it was drawn. That’s not what happens today. A designer who wants a specific detail simply finds that detail in some old plan set. The designer clicks to copy...
  5. Home Improvement California Style

    Anna-Becky Redlich needed some work done on the bedroom, sitting room, closet and bathroom of her Hillsborough, California home. Nothing structural. The only changes would be cosmetic. Reliance Management Group offered to do the work on a cost-plus basis. The estimated initial contract price was $250,000. The down payment would be $1,000 plus a "retainer" of 10%. If you’ve done...
  6. Three-day Notice in Virginia

    The HVAC system in Elise Theyer’s historic Norfolk, Virginia home needed an update. Elise saw an ad for ductless mini split systems and called Norfolk Air Heating and Cooling to get a bid. Norfolk Air made a sales call. They quoted a ducted system on the first floor and six mini-splits on the second floor. Elise signed their agreement on...
  7. Indiana Insurance Contract

    A severe spring storm damaged the home of Jason Jenkins in Boone County, Indiana. On June 11, 2017, Jenkins agreed to have Mcgraw Property Solutions make repairs. Mcgraw promised to complete all storm remediation work for the price approved by Jenkins' insurer. The contract provided that "f the insurance company does not approve your claim, this agreement automatically terminates." The contract...
  8. Bailing Out of a Bad Contract

    Most of what you read here is about drafting good contracts, not about bailing out of bad deals. But bad deals happen – such as to a Florida contractor I advised last week. “How do I get out of this contract?” I’ll count the ways. First, understand the measure of damages, what you stand to lose by simply walking off...
  9. Subs or Gig Workers?

    Every contractor understands the advantage of using independent contractors rather than hiring employees: No FICA or FUTA, no workers’ comp, no sick leave, no overtime. Using gig workers cuts at least 30% off labor costs. Great choice! But you probably detect problems lurking here. I’ll explain by offering a little history. Statutory Employees A hundred years ago, employees injured on...
  10. Checklist for Construction Contracts

    Nearly all states require specific notices and disclosures in construction contracts. In some states and for some types of work, the list of required notices goes on and on. Worst case: California requires 35 separate notices in home improvement contracts. But anything your state requires is just the minimum. Your contracts also have to cover the price, the site, the...

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