New York City’s Salary History Ban Takes Effect October 31

Effective October 31, 2017, New York City becomes another jurisdiction making it unlawful for contractors and other employers to ask most job applicants for information about their prior or current salary, compensation or benefits.  Adopted by the City Council earlier this year, the new law seeks to eliminate wage inequality experienced by women and minorities by making it unlawful to inquire about or rely on a job applicant’s salary history.  In anticipation of the October 31 effective date, the New York City Commission on Human Rights published two Fact Sheets – one for job applicants available here, and one for employers available here. Continue Reading

Tic Toc Tic Toc: The Clock Is Running on Construction and Design Claims by the State of Connecticut Beginning October 1, 2017

Our readers may recall that Public Act No. 15-28 was signed by the Governor back in 2015, subjecting the State of Connecticut and its political subdivisions to a statute of limitations for asserting actions and claims arising out of “construction-related work.” The law became effective as of October 1, 2017. “Construction-related work” is defined in the Act to include the design, construction, construction management, planning, construction administration, surveying, supervision, inspection or observation of construction of improvements to real property. Notably, it applies not only to the State, but also its subdivisions such as cities, towns, and other entities like school districts.

The limitations period set forth in the Act is 10 years from the date of substantial completion of a given improvement. The 10 year limitations period applies going forward to improvements to real property substantially completed on or after October 1, 2017. For improvements substantially completed before October 1, the limitations period runs to October 1, 2027. Prior to the Act, the State and its political subdivisions were generally not subject to any statutes of limitations for such claims due to the legal doctrine of nullum tempus occurrit regi, which provides that a state is not subject to statutes of limitations unless it specifically consents to be. Literally translated, it means that “no time runs against the king.” Continue Reading

Robinson+Cole Hosts Industry Leaders Roundtable Discussion

On August 30, 2017 Robinson+Cole’s Construction Practice Group held its annual Retreat at the newly completed Dunkin’ Donuts Park in Hartford. The Retreat featured an Industry Leaders Roundtable discussion session with representatives from many  of the major Connecticut construction industry organizations. The discussion was moderated by Construction Group Chair Greg Faulkner and led to a lively discussion on various issues affecting the construction industry. Here are some of the highlights:

The first topic of discussion focused on what attendees viewed as the most significant challenges facing design and construction service providers in the immediate future. All in attendance agreed that the shortage of young professionals and tradespeople embarking on careers in the construction and design industries was an issue of serious concern. It was pointed out that Connecticut is unique among many of our neighboring states in that it provides options to young people considering a career in the construction industry through trade schools, which feature an academic curriculum in addition to skills education, and the fact that public high schools are increasingly adding trade-skills-based education back into their regular curricula. This was viewed as good news by all. On a related note, those in attendance reported positively on the increased presence of women in the construction and design industries, particularly the trend of more women entering the industries as young professionals and advancing in seniority to managerial roles. Continue Reading

What’s Next for the Winthrop Square Development Project?

On July 28, 2017 Governor Baker approved a home rule petition proposed by Mayor Walsh which changed a Massachusetts law so that a skyscraper could be built over the Winthrop Square garage in Boston, Massachusetts. Obtaining the Governor’s approval of House Bill 3749 was a tremendous challenge that the developer, Millennium Partners has now overcome moving one step closer to the construction of the project.

The incumbent Secretary of State, William Galvin, who also serves as chair of the Massachusetts Historical Commission urged the Governor to veto the bill stating in a July 24, 2017 letter: “It is the conclusion of the Massachusetts Historical Commission that the construction of this building at its proposed height would do great damage to historic buildings included on the National and State Registers of Historic Places, including the State House, public parks, and private residences.” Continue Reading

A Shadow Cast Over Boston’s Building Boom

There has been a law on the books in Massachusetts since 1990 restricting the construction of tall buildings that would cast what some might view as unsightly shadows over the Boston Common and Public Garden.  With no open space remaining for ground up construction in downtown Boston, developers are looking build a 775 foot residential tower that undoubtedly would cast a shadow over the Common and Public Garden in violation of that law; and are thus seeking to change the law.  On June 27, 2017, Massachusetts legislators delayed a vote to waive the law. William Galvin, incumbent  Massachusetts Secretary of State, asked lawmakers to delay their vote by two weeks so that his office can study the legislation. Secretary Galvin also oversees the Massachusetts Historic Commission.

The proposed 775-foot tower was named by the developer Winthrop Square. According to the Friends of the Public Garden, a park nonprofit advocacy group,  the tower, if built would violate the existing shadow laws for 264 days of the year on the Boston Common and 120 days on the Public Garden. Continue Reading

The Drone Economy in the Construction Industry

Drone data is used in construction (3-D mapping, site surveying), agriculture (crop mapping), energy (solar and wind turbine monitoring), insurance (roof inspections), infrastructure (inspection), communications (damage assessments) and countless other industries. These industries, and more, have long sought data ‘from above,’ generally from satellites or airplanes, but drones are better sensors in the sky. Drones can gather higher-resolution images and more frequent data than satellites, and drones are cheaper, easier to use, and safer than airplanes. Drones can also provide ‘anytime, anywhere’ access to views with accuracy that rivals laser scanning –and the technology has not even reached its peak.

In the construction industry—which has the second largest industry in the world (second to agriculture) and is worth $8 trillion a year—drones can make a remarkable difference in the industry’s economics. A typical construction project runs 80 percent over budget and 20 months behind schedule. But drones can save big on costs and time. With drones, a whole site, for example, can be mapped, in high detail, for as little as $25 a day. Drones can help close the gap. Drones are tools for industries, not just toys you can buy off the shelf.

Overall, commercial drones are set to take off—in the next four years, somewhere from a quarter million to a million and a half drones will enter the skies. The cost of drones will decrease while the quality of the drone (and its software) increase.

 

This post was authored by Kathryn Rattigan and is also being shared on our Data Privacy + Security Insider blog. If you’re interested in getting updates on developments affecting data privacy and security, we invite you to subscribe to the blog.

Construction Group Projects

In recent months, Robinson+Cole’s construction lawyers have worked across the country on many significant and unique projects worth billions of dollars in construction value. Our clients are owners, designers, and contractors, and we advised them on all aspects of these projects, from the earliest stages of project delivery selection to the ribbon cutting. This work included preparing and negotiating the many design, construction, consulting, project management, and development agreements these projects entail as well as advising our clients throughout the course of the process. The projects include educational facilities, hotels, residences, high-end retail, health care expansions, energy facilities, food and beverage facilities, and commercial build-outs. Click here for more information.

The Enforceability of Mechanic’s Liens in Bankruptcy is Dependent on State Law

In a recent decision by the Third Circuit Court of Appeals, the Court held that a mechanic’s lien filed by an unpaid supplier against a construction project, after the contractor through whom the materials were furnished filed for bankruptcy, was voidable. In re Linear Electric Co., No. 16-1477 (3rd Cir. March 30, 2017).  Specifically, the Court held that once the contractor filed for bankruptcy, the automatic stay barred the filing of a mechanic’s lien. While the supplier argued that the lien only encumbered property of the owner of the construction project, rather than property of the contract, the Court rejected that argument. The Court held that because the lien permitted recovery of money owed by the owner to the contractor, the lien acted to seize a portion of the contractor’s accounts receivable, which was now an asset of the bankruptcy estate.

Interestingly, the Court noted that the result might have been different if another state’s law governed. The Court acknowledged that in another case, In re Yobe Electric, Inc., 728 F.2d 207 (3rd Cir. 1984), the filing of a mechanic’s lien by a subcontractor did not violate the automatic stay provision because, under Pennsylvania law, the date of filing the mechanic’s lien related back to “the date of visible commencement upon the ground of the work of erecting or constructing the improvement.” In In re Linear, the Court applied New Jersey law, which contained no such relate back provision and, therefore, the mechanic’s lien was effective only as of the date of filing.  Continue Reading

Rules of the Drone. The New FAA Drone Rules For Your Construction Site

About ten years ago, I visited a college friend in Simi Valley, California. He graduated Purdue with an Aeronautical Engineering degree and had left Indiana to work for a company developing unmanned aircraft for the military.  He offered me a tour of the facility. That was the first time I had ever seen drone. Now, unmanned aerial systems (UAS or drones) are more a part of our lives than ever. My fourteen year old cousin builds them in the garage, last fall a World Series pitcher sliced his pitching hand working on one, there is drone racing, drone wrangling, and drone delivery services. More and more, however, drones are not just a hobby but drones are being used for legitimate business purposes. In this regard, the use of drones on construction projects is soaring (pun intended). Contractors, owners, and architects have started using drones for all sorts of tasks on construction projects, including inspections, photographing, security, 3-D mapping, surveying, and surveillance.

As drones are becoming widely available and easier to use, rules are being implemented governing their commercial use. One cannot simply buy a drone off the shelf and launch it from the parking lot.  Last August, the  U.S. Federal Aviation Administration (FAA) issued the Small Unmanned Aircraft regulations (better known as Part 107 regulations) which regulate the commercial use of drones. These regulations clarify acceptable commercial uses of drones, which are in many instances making it easier for drones to be used for everyday commercial purposes. If you or your company intends to use drones for a commercial purpose on a construction project, you should be aware of the FAA’s Part 107 regulations which can be found here.

Some of the most applicable portions of Part 107 that you need to remember for commercial use of drones on construction projects are that drones must weigh less than 55 pounds, be flown at or below 400 feet in altitude and at no more than 100 miles per hour, and cannot be operated at night (operating hours are thirty minutes before sunrise until thirty minutes after sunset). Drone operators may apply for special waivers from the FAA if they want to fly drones at night, above 400 feet, or in other specific circumstances. Drone operators must be at least 16 years old and must also take an FAA aeronautical test and obtain a remote pilots certificate  before operating a drone.

A summary of SOME of applicable sections of Part 107 regulations are as follows: Continue Reading

What is Builders’ Risk and Why Do We Need It?

In negotiating construction contracts, the parties may ignore or give little attention to the project’s insurance requirements.  Insurance provisions are oftentimes left untouched on the standard industry forms.  One typically misunderstood type of project insurance is builders’ risk, also sometimes referred to as an “all risk” policy, or BRI.  Builders’ risk insurance is a property insurance that provides coverage during the construction phase of the project.  Coverage is dictated by the terms of the policy but typically extends to physical loss or damage to the insured’s property, including the “work” being performed.

An owner’s commercial property insurance policy often contains an exclusion for partially constructed or unfinished buildings or structures.  As such, BRI policies are tailored to provide coverage for active construction projects and coverage typically lapses upon substantial completion or occupancy by the owner; which is when coverage under the owner’s commercial property insurance would become effective.  Some insurers offer endorsements to an owner’s commercial property insurance providing coverage similar to a BRI policy, thereby avoiding the necessity of purchasing a separate policy.  However, these endorsements are usually only available for small renovation or maintenance projects.

Commercial property insurance and BRI policies are “first party” property insurance, meaning that they provide coverage to the insured who actually suffers the loss.  These policies are distinguishable from project liability insurance, such as a contractor’s commercial general liability policy or an architect’s professional liability policy, which provides third party coverage; coverage against liability for losses suffered by third parties.

Because BRI policies may include several different insureds (the contractor, subcontractors, owner, etc.) who are all participating in designing and building the project, these policies can indirectly provide coverage for third party claims.  For example, if the drywall subcontractor damages a fire sprinkler head while installing a ceiling and floods the building, short circuiting electrical or other equipment, the owner may have a claim against the contractor or subcontractor.  However, instead of pursuing that claim, the owner may be able to obtain coverage under the BRI policy for damage caused by the subcontractor.  Depending upon the terms of the policy and contract (and whether the policy contains an endorsement waiving subrogation rights), the BRI insurer may later assert a subrogation claim against the subcontractor; in which case the subcontractor’s commercial general liability policy may ultimately provide coverage for the loss.  But that’s another discussion for another day.

Builders risk coverage or other property insurance is a necessary part of every construction project’s risk management plan.  When negotiating a construction contract, the parties should meet with their risk management teams to vet several issues surrounding BRI. Which project participant is going to pay for and procure BRI?  Who will be insured under BRI? Who will be responsible for deductibles under the BRI policy?  In the context of these discussions the parties should also decide what coverages the BRI policy will actually provide – since there are many variations in policy forms and the scope of available coverages.  Project participants should take their contractual insurance requirements seriously and analyze and negotiate the requirements before signing their agreements and before starting work.

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