A lot of times, the funding isn't always there to pay the contractor immediately for the changes -- which ends up slowing things down (or halting the building altogether). That drives costs up even further.
Is there any way around the problem?
Sometimes, yes. It just takes a little creativity and a lot of co-operation between the owner and the contractor to make a plan work.
Some potential solutions that can mitigate the cost of a change order to the contractor and keep construction going include:
Naturally, these are only a few of the possibilities. The better that an owner and contractor work together on a solution, the more agreeable the end result is likely to be to both parties.
One important issue, however, is the agreement itself -- it needs to be in writing. All the changes have to be documented and signed off on by both parties. That makes it easier to avoid litigation over the construction down the line because there's reliable evidence that the plans were understood and agreed upon.
Source: Interface Consulting International, Inc., "An Ounce of Prevention: Creative Solutions for Change Orders May Avoid Costly Litigation," accessed April 26, 2018
]]>Unfair competition is defined as a wrongful or deceptive business practice that results in economic harm to business entities or consumers. Federal laws and state laws exist to guard against unfair competition by actively protecting the creative, intellectual and economic investments that businesses make in order to distinguish their products and services.
Unfair competition can take many forms. One of those forms is using a trademark that is owned by a different company. For example, if you put Apple's famous logo on electronics manufactured by a company that has nothing to do with Apple. "Bait and switch" tactics are a closely related form of unfair competition that involve a seller "baiting" consumers by offering one product and then saying that it isn't available and trying to sell them something else. For example, a computer store might offer iPads for $40 but then tell consumers who go to the computer store that the iPads are sold out and then try to sell the consumers much more expensive tablets. Naturally, consumers are quick to catch on to scams like that and are correspondingly quick to take action against the businesses that do it.
Unfair competition can also manifest other ways, like when a company engages in their false advertising, misrepresenting their products and their competitors' products. Misleading consumers in any way qualifies as unfair competition, and is a good way for a company to put themselves out of business. Honesty is always the best policy. Honest business owners will feel better about themselves and will avoid getting sued.
]]>Zoning divides a municipality, such as a city or a county, into industrial, commercial and residential zones, with each being distinct from the others and having its own distinct purpose. Zoning regulations include a lot of rules imposed upon those who live, work and build in a particular zone. Those rules cover the types of buildings that can be built, and the modifications that can be made to those buildings. Everything including the height and width of buildings and the number of rooms that they have is covered, as are the number of buildings on a particular lot, and when buildings are residential, whether they need to be single-family or can be multi-family.
The rules also cover things like the location of utility lines, building setbacks from streets and any other boundaries that may be put in place around buildings. Naturally, rules affecting all of those things affect the plans of developers and builders, requiring developers and builders to carefully review and understand the rules and incorporate them into their plans. Neighboring municipalities will also want to carefully review and understand each other's zoning regulations since they will be affected by them too.
In some cases, large zones may have what are labeled spot zones within them. Spot zones have different rules than the surrounding zone, and often apply to just one parcel of property. Naturally, this is often challenged, since it can be misused as a form of crony capitalism. By learning about the zoning regulations of the area in which they plan to live, work or build, families, business people and builders can make sure that they are complying with the regulations and this save themselves a lot of expense.
Source: FindLaw, "Land Use and Zoning Basics," accessed March 29, 2018
]]>While it's true that most contractors and businesses never have to look at their contracts again after signing, it's essential to have the document on hand and available in the case of a serious disagreement. In fact, numerous New York contractors and/or businesses have lost millions of dollars and even gone bankrupt over an unexpected disagreement that could have been avoided if they had signed and dated a physical contract.
It's because of the physical contracts that "contractors" actually got their names. Imagine, for example, that a contractor agrees to remodel a building for $1,000,000. The contract will dictate the cost, the timing for completion and the parameters for completion. If the contractor fails to meet these guidelines, then the contract could become null and void depending on how it is written. More likely, contingencies within the contract will provide guidelines for discounts to the payer, or other remedies if specific terms of the contract cannot be met. Similarly, if the contractor meets all of the terms, then he or she will have legal recourse -- such as placing a mechanic's lien on the value of the property -- if the building owner fails to pay in full.
Are you embroiled in a construction contract dispute? You will need to fully understand the terms of the contract you've signed, as well as how it would be viewed by a New York court, to determine your most appropriate course of action.
Source: BobVila.com, "Contracting the Contractors," Bob Vila, accessed March 16, 2018
]]>Most retailers and manufacturers make very strong claims about why their product is the best, because they need to maximize the value of their limited advertising dollars and garner the most significant share of their market possible. Their claims can be hyperbolic, such as a statement by a restaurant that they sell the best seafood ever, but they can't be flat-out false.
Companies are not allowed to mislead the public into buying a product or a service under false pretenses. That applies to things besides advertising, and includes practices like tampering with odometers on cars. Violations can result in action being taken by the state attorney general. Some states also allow for private and class action lawsuits to be filed by those who were taken advantage of. Depending on the laws of each state, aggrieved parties can sue for multiple times the actual damages, plus attorney fees, plus court costs. All of that can add up to a bundle, which makes engaging in deceptive practices very expensive for those who are foolish enough to indulge in them.
For that reason, as well as the innate value of conducting business in an ethical manner, businesses are well-advised to carefully review all claims about their products and services before making them to potential customers. You can promote what you sell, and portray it in the best possible light, but you have to be honest about with customers about what they will be getting.
Source: FindLaw, "Details on State Deceptive Trade Practices," accessed March 02, 2018
]]>A recent example of that is a lawsuit which seeks to stop the building of an Upper East Side condominium tower which is already in progress. The lawsuit, filed by a coalition of elected officials and community groups, alleges that the tower's developer exploited a loophole, resulting in a height and configuration for the tower that local residents had not expected and are not comfortable with.
The developer broke ground in April 2015 for the project. A year after that, community groups noticed, and complained about, an unusual aspect of the site's zoning. The developer had established a separate lot along East 88th Street, 22-foot by 4-foot, with the intention of altering the building to a shape that it considered to be more advantageous. That resulted in the city's Department of Buildings shutting down construction on the 32-story luxury condominium tower.
However, the developer changed the configuration, and that led to the Department of Buildings reversing their decision and letting construction proceed. The lawsuit accuses the Department of Buildings and the Board of Standards and Appeals of making an improper decision when they approved the restart of the construction.
A request to halt construction until the lawsuit is resolved was denied by a judge, according to a statement from the developer. That means that the building of the condominium tower, the 16th story of which is now in progress. Of course, those who oppose the ongoing building of the tower will continue to fight.
Source: Crain's New York Busines, "Community groups launch lawsuit to block in-progress Upper East Side tower," Joe Anuta, Feb. 09, 2018
]]>Sometimes construction projects face objections from those who have businesses and residences in the area that the construction project is to be done in. This can be frustrating for developers, as those who object to the projects contact government officials to get the projects stopped. Objectors and developers want their positions to prevail, and the conflict between them can drag out for years.
One developer has been trying to develop a former public school for 19 years. He paid the city $3.5 million for it in 1999, and wants to make it into a dorm, which has been done with other former school and church buildings near universities across the country. He has now filed a federal lawsuit, claiming a conspiracy between neighborhood groups and local elected officials who want to block the project. He says that one of the people working to block the project is a man who owns condominiums in a nearby building and doesn't want the streets flooded with rowdy college students.
That man leads the management team of a hedge fund with $3.7 billion in assets. A nonprofit that he runs has made donations to groups that oppose the development of the former public school. The executive director of that nonprofit says that the federal lawsuit is ridiculous, and affirms that the nonprofit's objection to the project predates contributions from the hedge fund manager.
Source: The Real Deal, "What happens if the rich NIMBYs win?," Rich Bockmann, Jan. 26, 2018
]]>Others, however, do not. If there isn't a plan in place to deal with ending the partnership, contentious and expensive commercial litigation may follow, damaging the business. For that reason, it is a good idea to have a shareholders' agreement in place.
What does a Shareholders' Agreement do?
One of the most useful things that it does is outline, with no ambiguity, the responsibilities, duties and expectations of each partner in the company. By having that information in print in a legal document, the partners know who is to do what within the company, precluding disagreements and making sure that each partner lives up to their obligations.
What about benefits?
Shareholders' Agreements also address benefits. Shareholders' Agreements can delineate who gets what when the company is prospering, which prevents the partners from getting into arguments about pay, including profit-sharing, and other material benefits from the company's success.
What about if a partner divorces?
Shareholders' Agreements can establish that in case a partner divorces, a partner cannot transfer shares to their former spuse. The contract can require that the divorcing party must sell their shares or the percentage of shares that the spouse wants to the other partners at a price established by amount or by formula in the Shareholders' Agreement.
Does that apply if a partner dies?
A Shareholders' Agreement can also establish rights if a partner dies so that the shares of the deceased party will be sold to the other partners, with the proceeds thereof payable to the deceased partner's estate. The core point is for the other partners not to be forced suddenly to be in business with an ex-spouse or an heir of the person with whom they originally agreed to do business.
In sum, a partnership agreement will attempt to narrow the disputes and issues that confront partners on a day by day basis, particularly in a closely held business. No matter how much trust exists among partners going into a partnership, it is prudent to prepare for the future and to provide as much certainty as possible.
Source: Todd & Levi LLP, "Commercial Litigation," accessed Jan. 19, 2018
]]>Construction defects can occur at any stage of the construction process, including when the construction project is being designed, planned, supervised, inspected or built. Deficiencies that arise at any of those stages are construction defects if they are indicative of a failure to do the construction in a "reasonably workmanlike manner" or if the structure built fails to meet the performance specifications that are reasonably expected by the buyer.
Examples of construction defects that are both high-cost and common include structural integrity issues, like when there is an unstable foundation or other problems with concrete, with carpentry or with masonry & division. Mechanical problems, electrical problems and expansive soils can all fall into the category of construction defects too, as can water intrusion, which can result in toxic mold, other forms of poor moisture and thermal protection, and problematic glass, windows, doors and finishes.
When construction defects are the subject of construction litigation, they are categorized as design deficiencies, material deficiencies, construction deficiencies, and subsurface deficiencies. Design deficiencies are those where the problems are in the design, and often mean that the design is not in compliance with applicable building codes. Material deficiencies refer to problems that source back to the materials used to build a structure, and are common when contractors cut corners and use cheap materials to lower their costs. Construction deficiencies are the result of poor work by builders during the construction process, and subsurface deficiencies are a result of not compensating for problems in the ground where the structure was built. It is important to address these construction defects early in the process and to properly document the issues so that liability can be properly apportioned among the various parties.
]]>The problems leading to that point may be because of deceptive trade practices, which are defined as practices that include false claims, disinformation and other misleading tactics that are employed with the specific purpose of getting people to pay for a service or product, resulting in sellers profiting from deceiving buyers. An example of that is car dealers who set the mileage on a car's odometer to much lower than it actually is, in order to convey the inaccurate impression that the car has been driven less to a potential customer. Another example, which many retail stores use, is bait and switch, which involves drawing potential customers to their store by promising the availability of an item that they don't actually carry in the hopes that, once at the store, customers will buy other products.
Those are deceptive trade practices, and New York has laws against them. Odometer tampering in specific is treated as a misdemeanor, and false advertising, which can be harder to prove, is also legally prohibited. Overall, the laws against deceptive trade practices allow for both civil and criminal penalties.
An injured party who prevails in a deceptive practices claim can be awarded actual damages in an amount up to $1,000, based on there having been purposeful deception, and can also be reimbursed for the costs and fees he or she expended for legal representation. These laws are very beneficial for consumers, and hopefully even more so, a determent to businesses to keep them from engaging in deceptive trade practices in the first place.
Source: FindLaw, "Details on State Deceptive Trade Pract," accessed Dec. 21, 2017
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