Demands for Direct Payment on Public Construction Projects
Many subcontractors, after substantially completing their work, find themselves eagerly awaiting payment from their project general contractor – beyond the contractual deadline for payment. In such a situation, the general contractor also might be awaiting payment from the awarding authority for various reasons, even if the associated subcontractor’s work is fully completed. For example, the…
Know Your Collateral: Unique Risks in Lending to Condominium Projects
When a real estate developer seeks financing from a lender in connection with a construction project, it is common for the lender to receive a mortgage from the developer on the property to be developed. This mortgage, along with the associated loan agreement and promissory note, constitutes security for the money loaned to the developer….
Payment Bond Claims on Public Construction Projects
Those of us in the construction business, whether as a project owner, general contractor or subcontractor/supplier, know all too well that payment claims or set-off claims are to be expected throughout a project’s life cycle. Despite the best efforts of a general contractor that timely submits requisitions, or a subcontractor that timely and properly completes…
Quick Tips for Project Owners Negotiating Construction Agreements
Prior to breaking ground, the project general contractor typically presents the project owner with a construction agreement using form language published by one or more of the (i) American Institute of Architects (AIA), (ii) Design- Build Institute of America (DBIA), and (iii) ConsensusDocs. Owners should pay particular attention to, among the many provisions in these…
Drafting Trusts to Protect Your Children Against Divorce/Creditors
The Massachusetts Supreme Judicial Court recently issued its decision in the highly anticipated case of Pfannenstiehl v. Pfannenstiehl providing clarity to the lower courts on whether a spouse’s interest in a discretionary, spendthrift trust is subject to division as a marital asset in a divorce proceeding. The Supreme Judicial Court concluded that the husband’s interest in an…
Tips to Avoid Claims Under the Massachusetts Home Improvement Contractor Law
It is fairly common for contractors to perform residential construction work without ever executing a contract with the homeowner. Sometimes, the parties “shake on it;” other times, the contractor simply provides the homeowner with a basic invoice identifying the scope of work and a total cost. Whether you are a residential contractor or a homeowner…
What You Need to Know About Massachusetts Mechanic’s Liens
Many of us in the construction industry generally understand what it means to “lien a project”. But do we really know all of the requirements that must be satisfied to properly record a mechanic’s lien against a project property? Understanding these rules could help a general contractor get fully paid on a job; or could…
Overcoming the Strong Disfavor of Variances Under Massachusetts Law
Real estate owners planning to construct a new addition or make any other improvement to their property might have to petition for a “variance” to allow for the contemplated construction. When a variance is required and justified, the variance petitioner should do some homework prior to the variance proceedings to ensure that he or she,…
Seller’s Remorse – The Fixed Price Option to Purchase Real Estate
It is fairly common for lessors and lessees of real property to include in long-term lease agreements an option to purchase the property. Often, such options to purchase establish a fixed price. Establishing a fixed price option gives rise to substantial risk of which owners/lessors in particular should be wary. Whether you are a commercial…