In December 2020, the United States Department of Transportation (DOT) amended the small business size limit under the Disadvantaged Business Enterprise (DBE) program (section 1101(b) of the Fixing America’s Surface Transportation (FAST) Act (Pub. L. 114-94, Dec. 4, 2015).  The rule, which goes into effect on January 13, 2021, increases the DBE gross receipts cap (averaged over the firm’s previous three fiscal years) to $26,290,000 for Federal Highway Administration (FHWA) and Federal Transit Administration (FTA) related work. This inflationary-based adjustment is an increase over the prior gross receipts cap of $23,980,000 enacted in 2015. The effect of this rule, which is “not considered a significant economic impact on a substantial number of size entities”, is to allow “some small businesses to continue to participate in the DBE programs by adjusting for inflation.” This adjustment should provide relief for some DBEs that were close to exceeding the limits from 2018-2020.
Continue Reading DBE Gross Receipts Cap Adjusted for Inflation

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?

In the wake of the tragic death of architect Erica Tishman, who was killed by falling debris from a brick tower in midtown Manhattan in December 2019 , the New York Department of Buildings (DOB) amended its rules governing exterior wall inspections and repairs. The new rules went into effect on February 20, 2020. Known as the Local Law 11 inspections, the Façade Inspection & Safety Program (FISP) has undergone extensive amendments in an effort to address the increasing number of dangerous façade conditions including corroded masonry and fractured terra cotta which in addition to causing structural problems, can loosen and fall to the ground causing bodily harm or property damage.

This issue is a growing concern. During the past six years, more than 4,790 Environmental Control Board violations related to facades were issued of which more than half remain active.[i] The DOB reported more than 22,000 violations related to facades since 2014.[ii]
Continue Reading NYC Amends Its Façade Inspection and Safety Program to Push Building Owners into Action