Posted on Thu, Feb 23, 2012
Governor Andrew M. Cuomo this week launched the first statewide surety bond assistance program for Minority -and Women -Owned Businesses. This program will provide financial assistance to help MWBEs secure surety bonds and state contracts.
"New York's strength is in the diversity, innovation, and entrepreneurship of all its residents," Governor Cuomo said. "By breaking down barriers to growth for MWBEs, we are putting that strength to work for all New Yorkers, building a more diverse and competitive business climate. These steps will level the playing field and open up doors for greater economic opportunity and job growth in communities that need it most."
As Governor Cuomo outlined in his 2012 State of the State Address, one of the biggest challenges facing small and MWBE contractors is securing credit, which limits their ability to obtain state contracts. To eliminate this barrier to growth, New York State has launched a new statewide bond assistance program that will provide financial assistance in the form of credit support to help small and minority— and women—owned businesses secure surety bonds and state contracts. The revolving loan fund provides irrevocable letters of credit, up to 30 percent of the base contract amount on a project specific basis, and is expected to facilitate $200 million in new bonding activity over five years. The state is also collaborating with intermediary lenders to help facilitate working capital loans to New York State contractors. To learn more about the New York State Surety Bond Assistance Program please visit http://esd.ny.gov/BusinessPrograms/BondingAssistance.html.
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The author, John Caravella Esq., is a construction attorney and formerly practicing project architect at The Law Office of John Caravella, P.C., representing architects, engineers, contractors, subcontractors, and owners in all phases of contract preparation, litigation, and arbitration across New York and Florida. He also serves as an arbitrator to the American Arbitration Association Construction Industry Panel. Mr. Caravella can be reached by email: John@LIConstructionLaw.com or (631) 608-1346.
This is a general information article and should not be construed as legal advice or a legal opinion. Readers are encouraged to seek counsel from a construction lawyer for advice on a particular circumstance.
Posted on Thu, Feb 16, 2012
Many contractors and subcontractors go about their work feeling protected from claims for damages because their agreements contain certain exclusions. Some of these agreements will even have language stating 'Not responsible for [X, Y, and Z]'.
But the ruling handed down February 14, 2012 by the Supreme Court, Nassau County serves as a reminder that contractual indemnity provisions are more of a privilege than a right, and are not subject to enforcement automatically.
"The law is settled that a party seeking contractual indemnification must prove itself free of negligence in order to enforce the indemnity clause." Cibellis Constr., Inc., v. Hamilton Owners, Inc. This effectively places an affirmative burden on the party seeking the enforcement of this protection to prove that no negligence on their part exists. The proving of any negative event can be challenging however, like proving the loch ness monster does not exist.
Ultimately this line of logic is what caused the ruling to come down against this contractor, as the court declined enforcement of its contractual indemnity protection. As the underlying project facts of this matter relate to damages to the underground electrical service caused during excavation of a driveway, it was found to be evidence of negligence on the contractor's part for failure to call the "one-call" notification system to verify the precise locations of the underground facilities.
Your comments and future article topic suggestions are invited in the field below.
The author, John Caravella Esq., is a construction attorney and formerly practicing project architect at The Law Office of John Caravella, P.C., representing architects, engineers, contractors, subcontractors, and owners in all phases of contract preparation, litigation, and arbitration across New York and Florida. He also serves as an arbitrator to the American Arbitration Association Construction Industry Panel. Mr. Caravella can be reached by email: John@LIConstructionLaw.com or (631) 608-1346.
This is a general information article and should not be construed as legal advice or a legal opinion. Readers are encouraged to seek counsel from a construction lawyer for advice on a particular circumstance.
Posted on Tue, Feb 14, 2012
When a private improvement lien is filed in New York, the entire body of the New York Lien Law is imported which establishes the rules for filing, enforcing (or foreclosing the lien) and for challenging or discharging the lien. There may often be defenses to the lien for the property owner as outlined below. For those seeking to file a valid lien, the below serves as a reminder of common issues to avoid.
Often in the construction context a homeowner may find a lien filed against their property by a contractor hired to perform work on the property. Also it is common for the homeowner to have complaints about or criticisms of the work performed. For the homeowner who finds their property with a lien, and unsatisfactory work performed, it is possible to seek relief from the court. “A lien will be vacated where the court finds the work was not substantially completed or is below industry standards.” New Day Builders v. SJC Realty 219 A.D.2d 623, 631 N.Y.S.2d 707, N.Y.A.D. 2 Dept., September 18, 1995 (NO. 93-06390).
The time provided for a party to lien a property for being unpaid for work performed is also limited under the New York Lien Law and strict compliance with all requirements is required for a lien to be valid and enforceable. For work performed on a single family dwelling the time allowed for a lien to be filed is 4 months from the date of last work NY Lien Law § 10. This time limit, however, can be unclear if there was a termination or an abandonment of the job by the contractor, or when the contractor returns for repairs or warranty work after completion.
“Where a contract has been abandoned (by the contractor), the date to file runs from the date of abandonment” Locke v. Goode 174 N.Y.S.2d 435. Any work done after abandonment will not extend the time allowed to file a lien. Likewise it follows that any repair or warranty call-backs on a completed project would also not extend the time available to the contractor for the filing of a lien. Nelson v. Schrank 75 N.Y.S.2d 761.
The homeowner often will not have direct dealings or agreements with subcontractors supplied by their contractor and can find their property liened by a subcontractor due to the contractor’s failure to pay the subcontractors. “If, before a lien is filed, the owner has paid the contractor, but the contractor has failed to pay the subcontractor, the subcontractor’s remedy is to look to the contractor [for payment]” Central Valley Concrete 310 N.Y.S.2d 925. “[An] owner’s liability to subcontractors is strictly limited to the amount of the lien fund, that amount owed to the general contractor.” NY Lien Law § 4.
The extensive requirements of the New York Lien Law is a large body of law, and is too broad to be condensed into this article, but the above considerations are commonly encountered in New York construction and serve to answer some common lien challenges.
Additional information may also be found in the blog article Pitfalls in Extending Mechanics Liens on Residential Properties.
The author, John Caravella Esq., is a construction attorney and formerly practicing project architect at The Law Office of John Caravella, P.C., representing architects, engineers, contractors, subcontractors, and owners in all phases of contract preparation, litigation, and arbitration across New York and Florida. He also serves as an arbitrator to the American Arbitration Association Construction Industry Panel. Mr. Caravella can be reached by email: John@LIConstructionLaw.com or (631) 608-1346.
This is a general information article and should not be construed as legal advice or a legal opinion. Readers are encouraged to seek counsel from a construction lawyer for advice on a particular circumstance.
Posted on Mon, Feb 06, 2012
The Law Offices of John Caravella, P.C., is proud to announce the launch of our new downtown Ft. Lauderdale Office to also serve the legal needs of the South Florida construction community, and those with ties to it.
We are also pleased to announce that Mrs. Sue-Ann Robinson Caddy has joined the firm bringing her substantial trial experience.
We invite you to visit our Florida Firm website, www.FTLConstructionLaw.com, to learn more about our Florida Construction Litigation and Arbitration Firm, our skilled attorneys, and services offered.
Serving the Palm Beach, Broward, and Dade County construction community.
The author, John Caravella Esq., is a construction attorney and formerly practicing project architect at The Law Office of John Caravella, P.C., representing architects, engineers, contractors, subcontractors, and owners in all phases of contract preparation, litigation, and arbitration across New York and Florida. He also serves as an arbitrator to the American Arbitration Association Construction Industry Panel. Mr. Caravella can be reached by email: John@LIConstructionLaw.com or (631) 608-1346 or (954) 271-6053.