Robinson+Cole’s Construction Group hosted its fourth— but first ever virtual — Construction Industry Roundtable on July 14, 2020. Representatives of major design and construction industry organizations and stakeholders in the Northeast were in attendance to discuss the state of the regional market and to look ahead for trends to watch for 2021.
Continue Reading Robinson+Cole Hosts Fourth Construction Industry Roundtable

Property development companies regularly create single-purpose entities (SPE) to acquire new real estate for development, construction or renovations. SPEs are often comprised of only a few members, and no assets beyond the property itself, and are considered “closely-held” companies.

There has been a growing trend in New York construction defect lawsuits in which boards of managers of newly-constructed condominiums that have sued the sponsor-developer-SPEs also name the SPE’s individual members as defendants. The plaintiffs rely on New York’s Debtor & Creditor statute Article 10, referred to as the “Uniform Fraudulent Conveyances Act” (UFCA). The UFCA authorizes “claw-backs” of money and other asset transfers as a remedy for some creditors.

Effective April 2020 in New York, after 95 years, the Uniform Voidable Transactions Act (UVTA) will replace the UFCA. The new statute will contain modified definitions and clearer criteria for which transactions may be unraveled. The question is whether this will reshape the courts’ understanding of sponsor-developer-SPEs’ equity financing arrangements, which by their nature have created a conflict with the UFCA.
Continue Reading Will Claims Against Closely-Held Condominium Developers Be Thwarted by New York’s Newly-Adopted Uniform Voidable Transactions Act?

A subcontractor has liened the property even though the owner has paid in full for its work. The general contractor has disappeared. What should an owner do next? And will its attorneys’ fees be recoverable?

In New York, a mechanic’s lien, although filed in the county clerk’s office on the project owner’s land record, secures only to funds:

  • owed to the party directly above the lienor: each tier of subcontractors, materialmen, and laborers has its own “lien fund,” and pursuit of that is its only recourse; and
  • that have been approved for payment: if the owner did not by contract or change order consent to the payment sought, that dollar amount is not included in the “lien fund.”

Thus, if at the time the subcontractor filed the notice of mechanic’s lien, the owner did not owe the general contractor money for work performed, there is no fund to which the subcontractor’s lien can attach, and the lien is void. In such a case, the owner has several options under the Lien Law.  It should determine whether the lien is “facially valid,” i.e., without knowing any facts, the lien, on its face, complies with the statutory requirements. If so, the owner may serve the lienor with a “Demand for Verified Statement,” which seeks detailed information about the items of labor and materials furnished and the terms of the subcontract under which they were furnished. If the lienor fails to provide a responsive statement within five days, the statute sets up a path by which the owner can seek cancellation of the lien in a summary proceeding. If the lienor does timely respond, then with the information provided by the subcontractor, an owner can verify the lienor’s claim.
Continue Reading An Unfounded Lien: What’s an Owner to Do? And Can it Recover its Attorneys’ Fees?

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

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 Robinson+Cole Hosts Industry Leaders Roundtable Discussion