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Showing posts from March, 2009

Litigation-I Win, You Lose vs. Mediation-Win/Win

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  Litigation is a zero-sum game.  It destroys relationships and fosters enmity between the parties.  Parties rarely walk away happy.  Even if they win, the expense of litigation is enormous, and collecting on judgments is difficult. Disputes ultimately resolve, but the focus on winning at any cost can lead to prolonged legal battles.  Living with a lawsuit causes ongoing stress, which can distract you from your business and even have an effect on your health. In a courtroom, the final decision lies with a judge or jury who may not fully grasp the complexities of the case. Parties relinquish control over the outcome, potentially leaving them dissatisfied with the final judgment. Mediation has the opposite effect.   Rather than polarizing people, it enables the parties to attack the issues and not each other.     The process promotes open communication, collaboration and problem-solving, which enables parties to actively participate in crafting mutually beneficial solutions.   It res
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10 Things You Must Put in Your Next House

This is a reprint from the Builder magazine : website: http://www.builderonline.com/products/10-things-you-must-put-in-your-new-house.aspx?page=1 From: BUILDER 2008 Posted on: December 15, 2008 8:44:00 AM Add these features to boost the value of your homes with your buyers.Americans love getting a deal, which might begin to explain why so many consumers flock to shopping malls on Black Friday. Of course, they aren't always ending up with a real bargain, but sometimes this doesn't matter. As long as an item or service has a high perceived value to people, there’s a good chance they’ll choose to buy it.This concept can be applied to selling homes. Create high perceived value, and you stand a better chance of closing the deal with buyers. One way to do this is to offer high value at a low cost. If your cool-looking kitchen was inexpensive to build, but it looks like it cost tons of money to do, you’ve hit a home run for your business and your buyers.With that in mind, here are 10
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Thoughts on Green Building

Although the concept of Green Construction has been around for quite some time, there seems to have been more discussion recently about using the technology to reduce heating costs, benefit the environment and as a marketing angle. I belong to a builder's association, and there have been more courses offered in green construction and LEEDS certification. I am not going to pretend to be an expert in this area, but I am trying to learn more about the "green" movement and how I can offer advice to my clients in this arena. For example, I learned about LEEDS-AP certification which a limited number of lawyers in Massachusetts have obtained. The National Association of Home Builders offers a Certified Green Professional designation. The requirements for LEEDS is changing as of March 30, 2009, and for that reason, I am looking into getting my CGP. So, what does this mean for you? Educate yourself about options and take continuing education classes. Learn about the pros and cons
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Contractors-What to do in a Bad Economy

The construction industry is in a terrible state right now, and I know many contractors who are suffering the worst downturn in work in their careers. Now, more than ever, contractors need to protect themselves when they undertake projects and make sure they are operating their businesses correctly. In my practice I see many distraught owners who want to file claims against contractors. They are now willing to fight over less and less money and their general level of anxiety has risen. The best contractors recognize that maintaining good client relations is the best way to stay out of trouble, ensure future referrals, and stay in business. Particularly in this economy, this is not the time to ignore phone calls, disappear from the job, hit consumers with unexpected change orders and extra bills and cut corners. Many builders do not realize that their best source of future business is their current clients. So, keep the following in mind: 1. Keep the lines of communication open at all t
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When Contractors Fail to Pay Subcontractors

In most construction contracts, the contractor serves as the general contractor (GC) and hires the subcontractors to do various aspects of the job. It is understood that it is the owner's duty to pay the contractor, and the GC then pays the subs. At least, that is how it is supposed to work. One of the most upsetting experiences for an owner is when a subcontractor knocks at his door or walks off the job stating that he has not been paid. It is even worse when a sub files a lien on the property. The owners are caught off guard and frequently between a rock and a hard place. They face a difficult choice: Should they re-pay the subs in order to get the work done, or rigorously defend against subcontractors' claims? In Massachusetts, if the sub's contract is with the contractor, he cannot prevail legally against the for payment. However, this is no consolation for an owner who is defending against a lawsuit, or living in an unfinished house or building. The reality is that one
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Getting Rid of a Mechanic's Lien

Before I say anything, I want to remind builders that mechanic's lien law is state specific. I only know how they work in Massachusetts. It is not easy to follow the mechanic's lien process properly. For contractors, it can be complicated, and it is very easy to make a mistake. Many attorneys do not get it right. So, there are opportunities along the way for a lien to be subject to being dissolved. The problem is, they do not self-extinguish. A document has to be filed with the registry of deeds to put the public on notice that the lien is no longer valid. The simplest way to dissolve a lien is by agreement. The parties come up with a way to resolve their dispute, and a Notice of Dissolution is filed by the contractor. The next "easiest" is for the owner to post a bond. The reason I put "easiest" in quotes is because this can be quite expensive. So, although the process is easy, the price is not. The fee I have encountered is about 10% of the value of the li
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A Good Time to Start a Home Renovation

I imagine that some of you will say it's crazy to start a home renovation project in this economy. However, there are many reasons to consider doing one now, and here are a few: 1. Contractors are no longer busy. The days are gone when contractors could afford to disappear from your project because they were working on others. It is in their best interest to do a good job and keep the homeowner happy. Now, more than ever. 2. The bad contractors are closing shop. I know so many contractors who are going out of business. This is very sad, but it is also serving to retain the good ones who have treated their clients well and maintained a good reputation. It is more likely that someone who has stayed in business is a "good" contractor. In my mind, that means there is a greater likelihood of a successful renovation project. 3. You will get a fair price. See #1 above. 4. The homeowner might have more time to devote to the project. My work is not as busy, and most people I know
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Construction Associations Provide Great Support to Builders

There are a number of different construction organizations in Massachusetts, and it is certainly worth your while to investigate them and attend some meetings. I, for one, belong to BAGB (Builders Association of Greater Boston), and I have been surprised by the amount of value I have received by being a member so far. This is what I have found: 1. Members tend to be more sophisticated and committed to their profession. Most who I have spoken with say they have never been sued and have good relationships with their clients. 2. The Association is dedicated to providing educational opportunities to its members and makes every effort to stay current on law and developments in building (for example, there is a committee on green construction). 3. Aside from the obvious hope for members to get business from each other, the membership is extremely diverse and consists of tradespeople and associates in insurance, design, banking, accounting, you name it. 4. The group is incredibly welcomi
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Problem with Chinese Drywall

There is a problem with Chinese drywall in Florida. It is emitting fumes that smell like sulfur and causing headaches, as well as destroying appliances and copper wiring. Read more about it here: http://www.tampabay.com/news/business/realestate/article985827.ece You can learn more about this issue by going to the Wolfe Law Group blog by Scott Wolfe, Jr.: http://www.chinesedrywallblog.com/ For further developments: http://www.heraldtribune.com/article/20090218/ARTICLE/902180349
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Who Can File a Mechanic's Lien in Massachusetts?

Under Massachusett law, A mechanic's lien is a statutory lien on real property for the payment of a sum owed on a project by an owner of the liened real property to a contractor or subcontractor or material person for labor and/or materials furnished for improvements to the liened real property during the course of construction. See, Nat'l Lumber Co. v. Le Francois Constr. Corp ., No. 97WAD021, 1998 WL 787547, at *2 (Mass. App. Div. Oct. 28, 1998), aff'd, 430 Mass. 663, 723 N.E.2d 10 (2000). This means that contractors, subcontractors and suppliers, as well as landscapers, driveway installers, septic tank repair companies and subs of subcontractors can file liens. In addition, "a person or his assignee, agent, authorized representative or third party beneficiary, to whom amounts are due or for whose benefit amounts are computed and due for, or on the basis of, the personal labor of such person, may file a lien to secure the payment of such unpaid amounts including inte
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The Difference Between Mechanic's Liens and Real Estate Attachments

Someone recently searched the web about the difference between mechanic's liens and real estate attachments. The effect of both is the same. The lien or attachment gives the holder a secured interest in property that protects the party if a judgment is obtained. The difference, however, is the means used to obtain the lien. A mechanic's lien is an automatic right that a contractor has that is afforded by statute. As long as a contractor who has worked at a property complies with the procedure, the lien can be filed on the property for the amount owed. A real estate attachment is not automatic. In Massachusetts, a party must demonstrate a likelihood of success on the merits of his or her case, and show that the defendant does not have liability insurance to satisfy a potential judgment against him. If the attachment is obtained "ex parte," without notice to the other side, then he must show that there is a likelihood that the property is going to be conveyed or the pro
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Filing Mechanic's Liens in Massachusetts-How to Avoid Mistakes

Mechanic's liens are definitely "traps for the unwary," which is an expression used in law. It is very easy to make a mistake when filing and perfecting liens, and unfortunately, most mistakes cannot not be remedied. Although there are many steps that contractors can take in their businesses to protect themselves legally, I would not recommend that they file mechanic's liens themselves. The steps for filing a lien are as follows: 1. File a Notice of Contract at the Registry of Deeds. The Notice of Contract must be filed under the appropriate section of the Mechanic's Lien Statute, M.G.L. c. 254. Section 2 applies to general contractors: Such person may file or record the notice of contract at any time after execution of the written contract whether or not the date for performance stated in such written contract has passed and whether or not the work under such written contract has been performed, but not later than the earliest of: (i) sixty days after filing
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Biohazard Clean-up Company Can File Mechanic's Lien in Indiana

http://www.constructionlawnews.com/BlogEntry.aspx?_entry=9cf195f7-9d36-403f-9647-150677aabc3a&RSS=true
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Why Contractors Should Incorporate

A thoughtful post from my colleague, Christopher Hill, at his blog, Construction Law Musings: http://constructionlawva.com/2009/03/why-contractors-should-incorporate.html To learn about incorporation in Massachusetts, go to the Secretary of the Commonwealth, Corporations Division website: http://www.sec.state.ma.us/cor/coridx.htm
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Is the LEED program a fraud?

An interesting post that talks about whether LEED for commercial buildings actually delivers: http://finehomebuilding.taunton.com/item/5872/is-the-leed-program-a-fraud
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The Strength of a Mechanic's Lien

The first in a series of posts on mechanic's liens: One of my readers asked a very good question in response to a recent blog post. Is the mechanic's lien a stronger item in Massachusetts? The answer to that question is yes, a mechanic's lien is a very effective means for a contractor to put someone on notice of his claim. It will also put a "cloud" on the title of the property, meaning that most real estate conveyances cannot take place once a lien has been filed. Over the past few years, mechanic's liens I have filed have prevented progress payments for new constructions projects, prevented the sale of houses, and forced others to come to the table and try to settle the dispute. The only way for a property owner to dissolve a lien without going to court is to post a bond, and as some of my clients have found out, posting a bond can be quite expensive (usually 10% more than the amount of the lien). Even if the lien is not done properly, one still has to file
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My New Blog-Massachusetts Builders Blog

Welcome to the Massachusetts Builders Blog. I have had another blog, Homeowner vs. Home Contractor, that deals exclusively with the renovation process for two years. There have been many topics that I have wanted to cover concerning the construction industry, but they did not fall within the purview of a blog about remodeling. This blog will be much broader, and cover such topics as mechanic's liens, construction contracts, general contractor-subcontractor relations, green construction, etc. I hope to have guest bloggers speak about land use issues, zoning, OSHA, construction accidents and accident prevention, as well as insurance coverage and the bidding process. Please feel free to comment and ask questions. I would like to see this blog develop as an ongoing conversation about construction in Massachusetts.
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Moving Away from the Billable Hour in Construction Law

I am going to tell you a secret. Most lawyers hate the billable hour. It is hard for us to keep track of our time, even with all of the latest software and technology. Most clients do not understand why some activities take so much of our time. They don't understand the value we provide. That is why more and more lawyers are trying to change the way they charge and use flat fees and other means to bill their clients. The other day, I had an epiphany. As a lawyer who works mostly in the construction industry, I should bill like contractors. I could prepare a proposal and scope of the work, and notify the client in advance what I would charge. If things changed dramatically, we would execute a written change order that would be signed by the parties. Everyone would be on the same page, and there would be no surprises. This is easier to do in some areas than others. I pretty much know how much time it takes me to draft a contract, write a demand letter or file a mechanic'
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