October 25, 2013 · 2:00 PM
1. Scott Wolfe of Zlien.com tweeted about the pros and cons of filing a claim of lien on real property in advance of a construction mediation. The linked blog post notes that while a claim of lien might enhance the claimant’s negotiation leverage, it might simultaneously generate adversarial tension up the chain, which in turn could make a mediated resolution more difficult to achieve.
It’s an interesting strategic question, particularly now that N.C. Gen. Stat. § 44A-23(d) expressly gives subs and suppliers the option to file their lien claims within 120 days of the prime contractor’s date of last furnishing, as opposed to their own date of last furnishing. More than ever, timing is everything. Continue reading →
Filed under Construction Risk Management, Delay Claims, Federal law, policy & news, Federal Procurement, Lien Law, State law, policy & news, Subcontractors
Tagged as build the Death Star, construction attorney, construction scheduling, construction tweets, construction tweets of the week, construction twitter, CPM, critical path method, government contracting, labor shortage construction, lien claims, lien deadlines, lien strategy, mechancis liens, NC construction law, NC construction lawyer, nc surety attorney, nc surety lawyer, public procurement, raleigh construction attorney, raleigh construction law, Raleigh construction lawyer, timing of lien claims, when should lien be filed
January 28, 2013 · 9:40 AM
A Grim Tale
Image by Larisa Koshkina / PublicDomainPictures.net
Once upon a time, Best General Contracting, Inc. hired Able Electric Services Co. to perform the $900,000 electrical scope of work on a library project for a local college. Having not worked with Able before, and in light of the value of the electrical scope, Best required Able to obtain subcontractor performance & payment bonds for Best’s benefit, agreeing, of course, to reimburse Able for the $13,500 bond premium. As fate would have it, the library project proved one too many for the not-so-able Able, who ran into cash flow problems, sought bankruptcy protection and abandoned the project. Best immediately fired off a notice of default letter to Superior Surety and hoped that the claims handling process would match previous, positive experiences with subcontractor sureties and culminate in a quick, fairy-tale resolution to this project setback.
To Best’s surprise, it would not. Continue reading →
Filed under Claims Handling, Performance Bonds, Surety Law
Tagged as bond obligee, construction bonding, construction bonding nc, construction bonds NC, construction contract default, construction contract termination, construction default, construction surety, contract bond surety, contract performance risk management, contract surety bond, handling surety claims, irrevocable letter of credit, managing surety claims, nc surety, nc surety law, nc surety lawyer, north carolina surety, North Carolina surety law, North Carolina surety lawyer, subcontractor default insurance, surety, surety claims process, surety obligee, surety principal
June 18, 2012 · 11:59 AM
Image from Wikipedia Commons
Monday is upon is, the beginning of what is likely to be the penultimate week of the General Assembly’s 2012 short session.
As my regular readers know, I’ve been tracking two key pieces of construction-related legislation: the lien law revision bill recommended by a legislative study commission, and the bill advanced by the title insurance industry to address the “hidden lien problem.”
This post provides an update on where those two bills stand, and also reports on a third construction-related bill that hit my radar last week.
Continue reading →
Filed under Lien Law, Local law, policy & news, Payment Bonds, Payment Bonds, State law, policy & news, Surety Law
Tagged as double payment, hidden liens, letter of credit substitute for bonds, NC construction attorney, NC construction lawyer, NC General Assembly, NC mechanics lien law, NC mechanics liens, nc payment bond claims, nc surety attorney, nc surety law, nc surety lawyer, payment bond, raleigh construction lawer, raleigh surety attorney, raleigh surety lawyer, subcontractor payment claims, Surety bonds; surety & fidelity association, title insurance mechanics liens, Union County build-to-suit
May 17, 2012 · 11:02 AM
You’re the authorized agent of a North Carolina county that has entered into an $8 million contract with a general contractor for the construction of a new administrative building. The performance bond issued on behalf of the GC is in the statutory form, and therefore applies not only to base scope, but also to “any and all duly authorized modifications of said contract…notice of which modifications to the Surety being hereby waived[.]” N.C. Gen. Stat. § 44A-33(a). The penal sum of the bond corresponds to the contract’s original value — i.e., $8 million.
As the GC begins mobilization, you’re informed that the county has obtained the funding necessary to build an additional wing to the building. That work had been an alternate in the bidding process, but was rejected by the county when the bids came in higher than the architect’s estimate, leading the county to award a contract to the GC for base bid work only. Now that the additional funding has been appropriated to the project, the $500,000 additional wing can be added to the GC’s scope of work by change order.
You discuss the scope change with the GC, who’s excited about the additional work. A change order is executed, and requires the GC to provide notice of the change to the surety. You’re told such notice has been given. The County now has $8.5 million in protection under the performance bond, right?
Not so fast, Sparky.
Continue reading →
Filed under Performance Bonds, Surety Law
Tagged as bond increase rider, bond obligee, bonds and statute of frauds, change orders, N.C. construction lawyer, NC construction lawyer, nc surety lawyer, penal sum, penal sum automatically increase with change orders, performance bond, Raleigh construction lawyer, scope of surety liability, statute of frauds, surey law nc