Christopher G. Hill, LEED AP

For this week’s Guest Post Friday here at Construction Law Musings, we welcome newcomer Lauren McLaughlin.  For over a decade, Lauren has devoted her law practice to representing professionals in the construction industry.  When she is not drafting contracts, negotiating change orders, litigating trials, or doing site visits as project counsel, she speaks at a myriad of construction industry events and writes for several trade associations.  She has been an invited speaker to the Construction Superconference, American Bar Association (ABA) Forum on the Construction Industry, DC Mechanical Contractors Association, American Subcontractors Association of Metro Washington, Structural Engineers Association of Texas, American Council of Engineers (ACEC), and the Virginia State Bar, Construction and Public Contracts Law Section. 

After several years practicing with larger law firms, Ms. McLaughlin co-founded BrigliaMcLaughlin, PLLC, a construction law firm representing owners, general contractors and subcontractors.  She is the co-author of “The Law” column in Civil Engineering magazine published monthly by the American Society of Civil Engineers (ASCE).

Recently, I had the opportunity to moderate and present a panel for the American Subcontractors Association of Metro Washington (ASA of MW).  Our topic was Building Information Modeling (BIM), the ever-present trend in the A/E/C industry.  While BIM is featured prominently now in trade magazines and legal conferences  (journals have sprouted dedicated exclusively to the topic) – just what is BIM? Why is the discussion relevant?  How is it different from the computer-assisted (CAD) drawings used previously? Finally, what concepts and terms of art do you need to be familiar with to raise your own BIM fluency?

First, the “Why” – The rationale for diving in: Why do you need to know about it?  It is becoming readily apparent that BIM is not just for large, complex projects anymore, but for mid-sized and even smaller sized projects.  In addition, many suggest it is no longer a trend or “wave of the future” but a technology staple of how business is now being done.  Is this circumstantial hype or is it backed up by some empirical measure?  McGraw Hill recently published its SmartMarket report after surveying participants from each sector (owners, AEs, GCs, subs) to track BIM usage:

Almost 50% of the respondents indicated they are using BIM or BIM-related tools today, which is a 75% increase from two years prior, when only 25% of participants reporting using BIM.  Of the non-users of BIM surveyed, 42% of them believe that BIM will be highly or very highly important to the industry in five years.

Client demand for BIM is increasing, contractors are winning work because of it, and subcontractors are having to adapt.  And because many construction lawyers adhere to thy first proverbial commandment – know your client’s business – those of us in related professions must come to appreciate BIM’s impact.  In other words, no matter what sector of the construction industry you hail from, if you are not already using BIM, or trying to expand your understanding of it, you had better start now.

Second, the “How is it different” – Leaving the old system behind and embracing the new:

“$15.8 Billion per year is wasted due to inadequate information sharing.” National Institute of Standards and Technology, 2004 Report

When you think about how technology has kept pace with other consumer industries, you begin to realize how the construction industry has truly moved at a snail’s pace in incorporating technology to the building process.  For instance, in the banking industry, consumers have for years come to know and expect real-time information.  When we make a deposit, we can do so from the comfort of our own computer, we can see that deposit on our accounts instantaneously online or on our ipads. We have immediate access to information as debits or credits are made to our credit card, we can see pending transactions.  Everything is transparent.

In the construction industry, without integrated project delivery (IPD) or BIM, owners, general contractors, and subcontractors have presumptively adverse roles.  If an owner considers making a change on a project, traditionally, the designers could take days or weeks to furnish new drawings.  The contractor needs time to process the time impact.  The subcontractors need time to assess the cost impact.  The fabricator needs time to order the materials.   Transparency is a foreign concept and each phase or proposed change is drawn out needlessly.  This is the pre-BIM status quo, despite that time is an even more important commodity in this industry than anywhere else.

But how does BIM change this?

First, design conflicts and owner changes are identified much earlier in the process because of BIM modeling.  The availability of three dimensional, four dimensional, and five dimensional models that contain design data help detect conflicts before work even progresses in an area, eliminating very costly field-generated changes.  “The owner and architect manipulate the model during the design phase to uncover the best solutions quicker and more effectively. The contractor can view the 3D model during construction, which reduces the number of clarifications and change orders.”  BIM also allows accurate quantity take-off which reduces waste.

Think of the number of projects that are still using a two-dimensional process: a set of specs and architectural drawings that depict just the geometry of a building (height and width) sent out to all trades. Then think of all the information generated from each trade during construction, which is then filtered back to the GC, then back to the Architect, then the Owner.  It seems pre-historic when you consider what BIM allows you to do.

BIM allows for real-time exchange of data and information in a single software to view not just the geometry of the building, but the spatial dimensions (3D), with time as the fourth dimension (4D), and cost as the fifth (5D).  BIM covers relationships, light analysis, geographic information, quantities and properties of building components (such as manufacturers’ details).

With the advent and staying power of the BIM process, clients have expressed that it is hard to conceive of going back to the old ways.  “Why would I ever go back?” one prominent BIM user at an international contracting firm recently explained to me. Indeed, why would you?

Third, the “What” – Product vs. Process:  In the discourse on BIM, you’ll find a vast and wide array of definitions for BIM.  The “market confusion” over BIM terminology stems from distinct concepts that are used interchangeably.  “A building information model is any compilation of reliable data, in single or multiple electronic data formats, however complete or incomplete, that supports a systems approach in any stage of the lifecycle of a building.”  In other words, the model is the repository or the tool that permits all users, at conceivably every tier, to store data on a project.

BIM “thought leaders” such as Dana K. Smith and Michael Tardif, however, argue that focusing on the model (i.e, the product) will prevent business owners from recognizing the true value of BIM.  Instead, they encourage widespread understanding and adoption of BIM as a process, whereby the “M” in BIM is not just the software tool, but a collaborative systems approach. Building Information Modeling is a “systems approach that requires everyone in the industry, every participant, to begin thinking of themselves, their products, and their services as part of a model.”

Fourth, “Say that Again?” – Speaking fluently with BIM users:

The BIM world is creating new acronyms at the speed of light.  Here are some selected terms used with frequency in the BIM world.

Fifth Dimension – Thoughts on BIM:

I can say that what I love most about the AEC industry are the people in it.  Despite my trade, (and all the unfortunate lawyer jokes that accompany the legal profession!), I am passionate about helping to create a more fair, more harmonious environment for my clients to achieve results, and to build something their proud of.  And that’s really the lynchpin of what the BIM process is all about – collaboration.

As always, Lauren and I welcome your comments below.  Please subscribe to keep up with this and other Guest Post Fridays at Construction Law Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

We’ve discussed the Lead Paint RRP requirements in the past here at Construction Law Musings.  Since its passage almost a year ago, there has been a lot of debate about its necessity and cost.  While this debate is interesting, I recommend a Google search on this topic for you to get all angles.  I’ll be discussing the potential legal ramifications of a possible change to the RRP in this post.

Recently, Senator James Inhofe introduced legislation (S. 2148) that would (among other items) reinstate a home owner’s right (removed by the EPA a year ago)  to opt-out of the RRP and its costs once that home owner is fully aware of the risks of lead based paint.   As stated in an article at For Residential Pros.com,

Specifically, S. 2148 would restore the opt-out provision, suspend the RRP if the EPA cannot approve commercially available test kits that meet the regulation’s requirements, and restrict the EPA from expanding RRP activities to commercial and public buildings until a study is conducted to prove necessity. S. 2148 would provide an exemption from penalty for contractors who submit documentation for the first time or with typographical errors and allows for a process to resubmit corrected documentation.

Residential construction professionals, and particularly those that remodel homes, should be aware of this legislation for several reasons.  One is of course that, should this bill pass, the RRP requirements will change and contractors will be able to give home owners the option of deciding whether in that owner’s particular case the cost of following the RRP outweighs the potential risks of having lead paint in their homes.  This could be a great boon for home owners and contractors alike particularly in this economy where every dollar counts.

However, any restoration of the opt-out does not come without the need to talk to a construction lawyer and modify your contracts accordingly.  As stated in another interesting article at For Residential Pros, the restoration of the opt out would only remove the onus of the EPA regulation.  This alone would not remove the risk of a civil suit by the home owner should the unlikely lead based disaster occur.  For this reason, if you, as a residential remodeling contractor, are to allow for a home owner to opt out of the RRP, you will need to include a corresponding waiver by the home owner of any civil claims that would stem from that decision.  In short, make sure that you are protected not only from EPA fines, but civil liability as well.

One other consideration is OSHA regulation that is outside of the RRP.  Be sure that you’re workers are protected and that you are aware of any other occupational safety issues that arise in the lead paint arena.  Again, the Inhofe legislation only applies to the EPA regulation, not to other issues that involve the remediation of lead based paint.

In short, while numerous trade groups, including the NAHB, applaud the legislation, be sure that you are protected with or without the opt-out.

As always, I welcome and encourage your comments below, please share your thoughts.  Also, please subscribe to keep up with the latest Construction Law Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

Originally posted 2011-12-23 09:00:51. Republished by Blog Post Promoter

For this week’s Guest Post Friday here at Musings, I welcome a friend. John Tarley is an attorney with the Williamsburg law firm of Tarley Robinson, PLC. John is the managing partner for the firm and leads the firm’s business and litigation practices. A large part of the firm’s practice involves homeowners’ associations, as the firm represents nearly 100 associations throughout southeastern Virginia. In his spare time, John teaches two classes a semester as an adjunct at the William & Mary Law School, serves as the 9^th Judicial Circuit’s representative on the Virginia State Bar Council where he serves as Vice-Chair of the Budget and Finance Committee, and is the editor of the Tarley Robinson blog and the @TarleyRobinson twitter account.

In our practice, we represent numerous common interest communities, more commonly referred to as homeowners associations. When the building industry flourished, we also represented a fair number of builders/developers of common interest communities. Obviously, the building market has taken a big hit, and at least in our area, few, if any townhouse or condominium communities are being built. In this blog, we will address the issues faced by developers of common interest communities facing the uncertainty of liability claims for damages for defective construction.

As if the residential construction business did not have enough obstacles to recovery, the litigation pertaining to the use of defective Chinese drywall threatens the viability of these remaining builders. These builders constructed our neighborhoods of single-family homes, townhouses, and condominiums, but many remain “on the hook” for defective construction claims, including claims regarding the use of Chinese drywall.

What could these builders have done differently? Unfortunately, the answer may be “Nothing,” leaving us to struggle to find lessons from this morass. Chris has written at length about Dragas Management Corporation’s efforts to remedy its Chinese drywall issues, but has found no relief from the courts.

Chinese drywall is just the latest problem faced by Virginia builders in the past twenty years from product failures for which they had little control such as Polybutylene Pipes; Defective fire-retardant plywood used for roofing; and EIFS. Builders struggle to learn what they can do differently to shield themselves from large liability claims, but the options are few.

In condominium construction, for example, a developer provides a warranty by statute, Va. Code Ann. § 55-79.79. Although the developer’s attorney drafted the Condominium Instruments for the condominium project, this warranty cannot be disclaimed. Furthermore, although the developer will maintain control of the condominium’s board of directors for up to five years, the members of the board have a fiduciary duty to exercise their duties in good faith and in the best interests of the association. Therefore, if a known problem arises while the developer controls the condominium board, the developer members are faced with an uncomfortable dilemna: file an action on behalf of the board against its builder entity, or breach fiduciary duties by taking no action.

In addition, as Chris has written, courts in Virginia have held that the builder’s and supplier’s liability insurance policies do not cover the damages caused by Chinese drywall. Of course these decisions forced suppliers and subcontractors out of business, making it less likely that a builder can seek indemnity from other parties.

The building industry will recover, as it has from other real estate crashes. In due time, builders will once again start constructing common interest communities, including condominiums. What good business practices can a builder/developer use to minimize risk? There are no easy answers, but these suggestions can help:

• At the outset, have an experienced HOA attorney draft your governing documents. The world of common interest community law has changed dramatically. Your real estate attorney may not keep current in the ever-changing laws relating to community associations. Understand the importance of the governing documents and how you can protect your project, your company, and the association from the traps for the unwary.
• Be selective in your use of subcontractors and material suppliers. Your written indemnity agreement is worthless if there is no entity left for you to claim indemnity against.
• Establish best practices in your construction projects, including quality control and inspections during construction. All the major problems discussed earlier related to products that promised more than they could deliver. Make sure your subcontractors are using quality products that have sufficient history with stable manufacturers. Finding problems after dozens of units are fully constructed dramatically increases your exposure.
• Address warranty and punchlist items promptly and completely. You may catch a serious problem early, helping you to minimize your potential liability exposure.

It bears repeating that when the “perfect storm” hits, there may be little that you can do. That is why it is important for you to take great care when setting up your common interest community project. Those steps may help you survive the next construction industry tsunami.

As always, John and I welcome your comments below.  Please subscribe to keep up with this and other Guest Post Fridays at Construction Law Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

Periodically, I look back through the various Guest Post Friday posts here at Construction Law Musings.  When I do this, I am amazed and thankful for the wide range of topics and the level of authorship.  In re-reading some of the posts, ranging from how photos can help out a construction project to technology to other construction law related topics, I am always thankful to each of you for the help you give in making this little corner of the internet a lot more interesting.  I hope you had as much fun writing the posts as I have had in reading them.

For those of you that are new to Musings, I highly recommend that you check out the Guest Post Friday page to get a flavor as to the great resource that these posts can be for construction lawyers and construction professionals alike.

I also have truly enjoyed the relationships with folks that I’d never have met if it weren’t for this blog and the interaction that Guest Post Friday has allowed me to have.

In short, thanks and I look forward to many more.

Image from stock.xchng

As always, I welcome and encourage your comments below, please share your thoughts.  Also, please subscribe to keep up with the latest Construction Law Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

During the recent General Assembly session, the Virginia legislature made a great change to the Virginia mechanic’s lien statute.  I blog about it at the Zlien Blog.

Here’s an excerpt of my post.

The recent changes to Va. Code §43-3 (effective July 1, 2012) clarify several points regarding the allocation of lien amounts to individual lots.  The main points of clarification are as follows:

• Common areas are explicitly excluded from the “denominator” of the lien allocation equation.  In other words, where there are 10 home sites and one common area, a site or utility contractor no longer needs to worry if it should allocate part of its lien amount to the common area and can safely allocate the amount owed to the ten home sites.
• Traffic signalization, and installation of electric, gas, cable, or other utilities are explicitly included in the definition of “site development improvements
• Any payments to the contractor for which the owner/developer does not designate a particular lot will apply to any previously sold lot and the remaining lots will continue to bear their share of the liability.

Check out the entire post and thanks to Scott Wolfe for giving me the opportunity, yet again, to post at his great mechanic’s lien resource.

As always, I welcome and encourage your comments below, please share your thoughts.  Also, please subscribe to keep up with the latest Construction Law Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

I have discussed the ConsensusDOCS here at Musings on a few occasions.  These relatively new form documents, endorsed by the AGC among other trade organizations, are a great counterpoint to the AIA documents that we all are more than familiar with and as construction attorneys and contractors have likely reviewed on numerous occasions.

Recently, these documents have joined the parade and have taken to the cloud.  The folks at ConsensusDOCS made this move to ease the type of collaboration that I have discussed must occur on construction projects among the players.  The use of the cloud based technology is one of the first uses of this technology to increase productivity.

Of course, like with any form documents, either use the ConsensusDOCS as written or not at all because they have been drafted to work together as written.  Changing the wording of any set of form contracts in places aside from the “fill in the blank” areas can only lead to inconsistencies and work for your lawyer should something go wrong.

I encourage you to review the ConsensusDOCS and poke around the new web based interface and then come back and let me know what you think.

As always, I welcome and encourage your comments below, please share your thoughts.  Also, please subscribe to keep up with the latest Construction Law Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

Originally posted 2009-10-12 09:00:00. Republished by Blog Post Promoter

Musings will be leaving the “green” reservation for a bit and discussing more mundane, though no less relevant, issues that arise in the construction world.

One interesting note is that the Virginia Storm Water Regulations were recently updated and are open to public comment. If you are affected by these regulations, be sure to make your voice heard.

On the construction law front, the Virginia courts are busy as always.  Two recent cases stand out to me.  The first is a Virginia Supreme Court case, Dunn Construction Company, Inc. et. al. v. Cloney.  In Dunn Construction, the home builder admittedly failed to meet the plans and specifications when constructing the home, in particular the foundation wall.  The contractor then “repaired” the wall and claimed openly that it had filled the repaired wall with rebar and reinforced the “cells” with concrete. After this representation (that turned out to be false), Mr. Cloney got a structural engineer to inspect the wall and determined that the contractor did not do what he said he’d done.  Of course, litigation ensued.  Along with the compensatory damages for breach of contract, the trial court granted Mr. Cloney punitive damages for the fraud of the contractor.  The Virginia Supreme Court reversed the punitive award, and restated its long standing position that where a duty comes from a contract, no common law tort action can go forward.

What makes this case interesting is it’s extension of the so called “economic loss rule” to a case of a representation that is seemingly outside of the contract itself. Dunn Construction represented, after the contract was supposedly complete, that it had performed certain remedial measures that were not readily apparent from a visual inspection.  Despite this fact, the Court found the duty to repair and honestly state the extent of the repairs arose from the contract, i. e. without the contract, the representation never would have occurred, and therefore a tort action for fraud could not go forward and punitive damages were unavailable.

The second case of note is Abacus Construction Company, Inc. v. Milestone Construction Services, Inc..  Without going into the major details of each and every claim and back charge involved in Abacus, suffice it to say that both sides had “change orders” that constituted a majority of the claims in the case.  The Court went through each claim, compared it to the contract language and the scope of work outlined in the contract before determining if the additional charges were allowable.  Much of Abacus’ claim was disallowed because “change orders” either were not in writing or described work that fell within the original scope of the contract.  Additionally, the terms of the contract at issue allowed Milestone to recover 10% overhead on their back charges and its attorney fees.

The takeaway from these two cases? The Dunn Construction and Abacus Construction cases show just how serious the Virginia courts are about contracts.  Your contracts are essentially the “law” for your project.  As a contractor or subcontractor, the contract is the road map for all of your remedies and risks, so they need to be taken seriously and drafted carefully.  Musings has discussed the importance of contracts on numerous occasions, and the Virginia courts consistently re-emphasize this importance.  To make sure that these contracts are drafted properly and used correctly, get the assistance of an experienced construction attorney.

As always, your comments are welcome and encouraged.  If you find this interesting, please subscribe to keep up with this and other Construction Law Musings.

Image from FreeFoto.com.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

For this week’s Guest Post Friday here at Musings, we welcome back Rob Mathewson (@geedrarob) of Geedra. Rob has spent twenty years in sales and marketing management roles with experience in industrial, consumer and construction markets. Rob believes the construction industry is ripe for innovation, based on its massive size, yet low productivity. Even with such inefficiencies, a building still rises from the ground. Rob’s goal with Geedra is to leverage technology to increase transparency and communication so that projects can be completed with less risk, effort and cost. Prior to founding Geedra, Rob was the Chief Marketing Officer for Construction Documentation Services, where he was responsible for sales, marketing and business development. He spent 15 years in the chemical distribution business, including eleven years as the Northwest Branch Manager of a $50 million distributor. Rob was the founder and CEO for On The Spot Games, a board game startup.

I LOVE construction operations directors (“Super O’s”). They live for creating systems that enable their organizations to deliver hundreds of millions of dollars in construction projects each year. If you are ever lucky enough to get one of them to look away from the daily hum of their operations and get him talking about the systems he’s built, you get the sense that there is nothing that can’t be broken down into a series of repeatable steps that deliver predictable results.  Well, almost nothing.

It’s my unenviable task to engage these gentlemen* in a discussion about their systems for collecting and organizing their construction photos. As Chris and I have discussed before, photos are a critical component of construction documentation. The Super O’s know this better than anyone. So, they craft meticulous file folder systems and procedures for the proper storage of project photos. A photo filed away using a Super O’s system should be as easy to find when it’s 12 months old as it is when it’s 12 minutes old. That is, assuming the individual who took the photo followed the system. Hmmm, did I say assume?

That assumption is the problem. Experience shows that, in the heat of the day-to-day construction battle, individuals don’t follow filing systems uniformly. Sometimes they’re distracted; sometimes they make what seem like obvious interpretations. But in the end many critical photos get misfiled and the best systems in the world can’t bring them back. Unlike a misfiled document, there is no such thing as a global keyword search for a missing photo. Once that photo is missing, finding it is akin to finding a needle in a haystack.

*My apologies if you are a lady in this position, because if so, I haven’t found one of you yet. But I keep looking!

Rob and I welcome your comments below. Please subscribe to keep up with this and other Guest Post Fridays at Construction Law Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

As readers of Construction Law Musings can attest, I am an enthusiastic (if at times skeptical) supporter of sustainable (or “green”) building.  I am solidly behind the environmental and other benefits of this type of construction.  However, I have likened myself to that loveable donkey Eeyore on more than one occasion when discussing the headlong charge to a sustainable future.  While I see the great benefits of a privately built and privately driven marketplace for sustainable (I prefer this term to “green” because I find it less ambiguous) building stock and retrofits of existing construction, I have felt for a while that the glory of the goal has blinded us somewhat to the risks and the need to consider these risks as we move forward.

Another example reared it’s ugly head recently and was pointed out by my pal Doug Reiser (@douglasreiser) at his Builders Counsel Blog (a great read by the way).  Doug describes a project that I mentioned previously here at Musings and that is well described in his blog and in a recent newsletter from Stuart Kaplow (@stuartkaplow), namely, the Chesapeake Bay Foundation’s Philip Merrill Environmental Center project.  I commend Doug’s post for a great description of the issues, but suffice it to say that the Chesapeake Bay Foundation sued Weyerhauser over some issues with a sustainable wood product that failed.  While the case was dismissed on statute of limitations grounds, the case illustrates issues that arise in the “new” sustainable building world.

While at bottom, the legal considerations for us construction attorneys are not all that different (breach of contract, construction defects, failure to meet plans and specifications), some of the risks inherent in the process are either new or old ones wrapped in new materials.  In short, we’re using old materials in new ways and using new materials that hadn’t been used before in these types of projects.  This means that we don’t have the years of engineering data to back up proper use of these materials and this can lead to issues over time.

My fear is not that energy efficiency and other benefits of sustainable building will not be met, but that failure to see and anticipate these risks will lead to setbacks in the process. On major problem with a “green” project (LEED or otherwise) will do more to slow the process than taking our time and doing things right the first time.  As my dad used to say:  its better to be 5 minutes late than speed to be there “on time” and get a speeding ticket that slows you down even more.

Thanks again to Doug and Stuart and please let me know your thoughts.  Am I off base?  What do you think?

As always, I welcome and encourage your comments below, please share your thoughts.  Also, please subscribe to keep up with the latest Construction Law Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.