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Manhattan Construction Law Blog

Who Grants Access to Tenant Space in Neighboring Building?

In many instances a developer or owner doing work to its property may need to gain access to the neighboring property for the protection thereof during the construction. Such access may include installing physical protection measures but may also include access for a pre-condition survey, inspection or monitoring. In many cases access is into common areas, but there are occasions when access into individual units or living space is needed.

SPONSOR ACE IN THE HOLE: THE INDEMNIFICATION CLAIM

In the usual case, claims by a sponsor against a construction manager or contractor ("contractor") for construction defects in a condominium building are subject to the six (6) year statute of limitations for contract claims, which starts to run from the date the contractor completes work on the construction project. Claims by a sponsor against an architect or other professional ("architect") for design defects in a condominium building are subject to a three (3) year statute of limitations, which starts to run from the date the architect completes its services on the construction project.

When a Lien Waiver is Not Enough

One of the key protective documents for Owners during the course of construction is the lien waiver. A lien waiver is a signed document from a contractor, subcontractor, materialman, equipment lessor or other party to the construction project stating they have received payment and waive any future lien rights to the owner's property (of the owner). Owners typically expect that the lien waiver is iron-clad once signed by a contractor, and may be surprised to find out that despite a signed lien waiver, the contractor may be able to file and foreclose upon a valid lien against a project. This type of mistake can be costly to a Developer-Owner and can be avoided with the right representation. Our attorneys are experts on the drafting of lien waivers and are intimately familiar with the challenges of enforcing them. We are available to assist you on both a legal and practical level to facilitate the effective management and winding-up of your Project.

No Damages for Delay Clause Found to be Enforceable, Despite 22 Month Project Delay

Although it is settled law that a no-damages-for-delay clause which exculpates a contractor from liability for damages resulting from delays in the performance of the work is generally enforceable, various courts have applied the exceptions enunciated by the Court of Appeals in Corinno Civetta Constr. Corp. v. City of New York, 67 NY2d 297 (1986) in denying dismissal motions based upon the clause. Those exceptions are:

When Negotiating an Architect's Agreement, Ensuring that an Owner is Protected in the Event of an Early Termination is Imperative

On some projects, conflicts arise between an owner and its various design professionals, including its architect. Should an owner opt to terminate its architect, the parties' rights will be dictated by their agreement. Therefore, an owner should be mindful of the following when negotiating such an agreement.

UPDATE: LIABILITY OF INDIVIDUAL PRINCIPALS OF CONDOMINIUM SPONSORS TO UNIT OWNERS FOR BREACH OF CONTRACT CLAIMS BASED ON THE PRINCIPALS' CERTIFICATIONS IN THE OFFERING PLAN

As previously discussed in a prior blog, pursuant to the Martin Act regulations, both the Architect for the condominium and the individual principals of the Sponsor are required to provide specific certifications in the Offering Plan. The regulations provide the exact wording of the certifications for both the Architect and the principals of the Sponsor. The purchase agreements between the Sponsor (usually a sole purpose entity such as an LLC) and the Unit Owners customarily provide that the terms of the Offering Plan are incorporated by reference into the purchase agreements.

Insurance Concerns Under Precon Agreements

Posted by: Evan Wagowski

During the preconstruction phase of larger construction projects, a construction manager (CM) almost always is retained by an Owner to act "as agent" under a Preconstruction Services Agreement (Precon). In addition to off-site preconstruction phase services, the GTH Precon also contemplates the possibility of the CM's oversight of certain early phase construction trade work, such as demolition, excavation, and foundation work. This Precon form enables the Project to commence while a formal CM Agreement (with full fee, general conditions, insurance and bonding details) is negotiated and executed.

A REVIEW OF COMMON CONSTRUCTION CONTRACTING ARRANGEMENTS

Posted by: Aliza Ganz

We are frequently approached by clients seeking our expertise in the drafting and negotiation of construction contracts. One of our first threshold issues essential to our preparation of the contract is resolving how the general contractor or construction manager ("CM") will be compensated for its work. The following is a brief review of two of the most frequently utilized construction compensation structures known as: (1) lump sum (also known as fixed price or stipulated sum) and (2) cost-plus.

Project Owner Permitted to proceed Upon direct Claim against subcontractor despite lack of privity

Posted by: Kalvin Kamien

Although, as a general rule, a project owner is precluded from proceeding upon a direct claim against a subcontractor due to a lack of privity (See Owssom Builders, LLC v. J & F Refrigeration Air Conditioning and Heating, Inc., 28 Misc. 3d 1218(A), 957 N.Y.S.2d 637 (Sup.Ct., Kings Co. 2010)), the Supreme Court, New York County recently carved out exceptions to this rule.

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