Category Archives: Other

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Bill to Nullify Clean Water Rule Vetoed

On January 19, 2016, President Obama vetoed legislation that, if approved, would have nullified the Clean Water Rule. The controversial rule, which redefines which water bodies qualify as “waters of the United States” under the Clean Water Act, was issued by the EPA and U.S. Army Corps of Engineers in June of 2015 and was … Continue Reading

Upcoming Speaking Engagement

Fourth Annual California EB-5 Conference Featuring Keynote Speaker Congressman Bob Goodlatte. Sheppard Mullin is proud to announce that both John Tishler and Michael Gibson will be participating as panelists at the event, which is designed for an array of attendees, including those interested in the EB-5 program for project finance or immigration purposes. The 2015 California EB-5 Conference will offer … Continue Reading

Mechanics Lien Subordination: Illinois Further Limits Construction Lenders’ Ability To Ensure Priority Against Mechanics Liens

On July 16, 2014, Illinois enacted Public Act 98-764 (Senate Bill 3023) (“SB 3023”), which amends the Illinois Mechanics Lien Act (770 ILCS 60/ et seq.) (the “Act”) to prohibit subordination of mechanics liens on Illinois construction projects, unless such subordination is to a construction mortgage lien made after 50% of the construction loan has … Continue Reading

Is Your Out-of-State LLC “Doing Business” in California?

Individuals and entities, including those from outside California, who invest in or do business through an out-of-state limited liability company (“LLC”) may be surprised to find out that they have filing obligations and tax liabilities in California as a result of California’s far-reaching rules and interpretations related to when an LLC is treated as “doing … Continue Reading

D.C.’s Less Charitable Approach to Property Tax Exemptions for Non-Profits

Under District of Columbia law, organizations that own buildings in D.C. used for purposes of public charity principally in the District are entitled to property tax exemptions.  (D.C. Code § 47‑1002(8)).  However, in light of recent actions by the District of Columbia Office of Tax and Revenue (OTR), non-profit organizations currently benefiting from the exemption … Continue Reading

Recent tax law changes of 2013

On January 2, 2013, President Obama signed the American Taxpayer Relief Act of 2012 into law. Summarized below are highlights of those and other changes to Federal tax laws affecting income, payroll, gift and estate, and generation-skipping transfer taxes beginning in 2013.… Continue Reading

Avoiding Things That Can Make You Go Bust In The Student Housing Boom

By Miriam Montesinos While ground up development has dried up in many sectors, off-campus student housing is one commercial real estate sector where development is booming. Unlike what other sectors are experiencing, there is both demand and capital for off-campus student housing developments, particularly ground-up development. These market conditions have led many developers to enter … Continue Reading

New Legislation on Wrap-up Insurance And Indemnity Clauses

By Edward B. Lozowicki and James G. Higgins Owners, developers and major general contractors are ramping up their use of wrap-up insurance policies on building and industrial projects. When sponsored by an Owner, wrap-ups are dubbed Owner-Controlled Insurance Program (“OCIPs”). If the general contractor sponsors the wrap-up, it is termed a Contractor Controlled Insurance Program (“CCIPs”). These policies … Continue Reading

Procedural Requirements Of California’s “Fix It” Law Upheld

Standard Pacific Corporation v. Superior Court of San Bernardino (Garlow) (2009) ___ Cal. App. 4th ____ (Aug. 14, 2009, No. E046844) By James Pugh The Fourth District Court of Appeal recently held that construction-defect plaintiffs must provide developers with notice and an opportunity to repair before filing suit. This holding in Standard Pacific Corporation v. … Continue Reading

Construction Manager Not Required to be Licensed pursuant to the Contractors’ State License Law

The Fifth Day, LLC v. James P. Bolotin, et al., ___ Cal.App.4th ___(March 27, 2009, No KC047712) By Jon E. Maki & Bram Hanono The California Court of Appeal for the Second Appellate District determined that an entity which provided construction management services to a private owner developing commercial real property was not required to be … Continue Reading

New California Law Prohibits Retention on CalTrans Transportation Projects

By Edward B. Lozowicki California has enacted a new law, Senate Bill 593, which prohibits CalTrans from withholding retention from progress payments to contractors on transportation projects. CalTrans has implemented this law by changing its Standard Specifications to delete the customary retention requirement. The official announcement from CalTrans states:… Continue Reading

Court Clarifies Prompt Payment Risks to Contractor

By James G. Higgins Prompt payment laws can pose significant risk to owners and contractors.  In S&S Cummins Corp. v. West Bay Builders, Inc. 2008 Cal. App. LEXIS 160, *, a public works general contractor was stung under Public Contract Code section 7107 for delaying retention payments to an electrical subcontractor.… Continue Reading

The AIA Releases 2007 Editions of Its Construction Contract Forms Amid Competition from Upstart “ConsensusDOCS” Forms.

By Mathew R. Troughton For the first time in a decade, the American Institute of Architects (“AIA”) revised several of the key standard forms of contract it publishes for use on construction projects.  The various AIA forms are widely used as the starting point for negotiating the terms of contracts between various project participants.  The … Continue Reading

Court Of Appeal Finds That A Tolling Agreement Between An HOA And Developer Tolls The Applicable Statute Of Limitations Even As To A Non-Party Subcontractor.

Landale-Cameron Court, Inc. v. Ahonen (Oct. 10, 2007, B190309 [2nd Dist., Div. 2]), ___ Cal. App. 4th ____; http://www.courtinfo.ca.gov/cgi-bin/opinions By Thomas B. Snyder and Andriana Ledesma In Landale?Cameron, the homeowner’s association of a condominium complex ("HOA"), discovered various water leaks to the building and subsequently sued the builder-developers Arnold and Helen Kaufman ("Kaufman") and Petri … Continue Reading

Federal Arbitration Act Preempts Contrary California Law and Prevents Purchaser of Real Property from Bringing an Action in Court for Construction and Design Defects

Shepard v. Edward Mackay Enterprises, Inc., et al., — Cal. Rptr. 3d —, No. C052564, 2007 WL 853456 (Cal. Ct. App. Mar. 22, 2007) While Section 1298.7 of the California Code of Civil Procedure generally allows homebuyers to pursue defect litigation in court regardless of an agreement to arbitrate, the Third District Court of Appeal … Continue Reading

A Public Entity’s Determination That A Subcontractor Could Be Substituted Under Public Contracts Code Section 4107 Is Denied Preclusive Effect In Subsequent Litigation

Kemp Bros. Construction, Inc. v. Titan Electric Corp. (2007) Cal.App.4th By Thomas B. Snyder In this case, Kemp was a prime contractor on two public works projects for the Los Angeles Unified School District ("LAUSD").  It subcontracted the electrical work to Titan Electric on both projects.  Partway through performance, Titan began to struggle with its … Continue Reading

California Department of Industrial Relations Expands Prevailing Wage Coverage

By Richard M. Freeman In December, 2006, the Departmentf Industrial Relations adopted a new, official position which could adversely affect the real estate development and construction community.  Its new position is that any type of public subsidy, waiver of permitting fees, discount or assistance from a public body to a developer does not have to … Continue Reading

Clean Water Act Regulations Do Not Require Numeric Testing Of Individual Pollutants Or Numeric Effluent Limitations For Industrial Stormwater Discharges

Divers’ Environmental Conservation Organization v. State Water Resources Control Board (Nov. 29, 2006, D046112) __ Cal.App.4th __ http://www.courtinfo.ca.gov/opinions By Ella Foley-Gannon and Julie Austin The Court of Appeals held that a permitting agency under the Clean Water Act is not required to conduct a numeric analysis of individual pollutants in industrial stormwater discharges in order to comply … Continue Reading

Contract Clause Requiring Contractor To Continue Performing Work During Pendency Of Dispute

Barton Properties, Inc. v. Superior Gunite Corp., California Court of Appeal, Second Appellate District (not officially published) In an unpublished decision, Barton Properties, Inc. v. Superior Gunite Corp, the Second Appellate District of the California Court of Appeal has held that a “continued performance” clause in a construction contract was rendered unenforceable by the owner’s … Continue Reading

A Cautionary Tale On Relying On Advice From Commission Staff

A Summary of Benson v. California Coastal Commission (2006) 139 Cal. App. 4th 348 By Brenna Moorhead "Predictions and suggestions from staff may be helpful or misleading to a party with a matter before the Coastal Commission. Therefore a party should take such advice with caution." (Id. at 348.) John Benson alleged a due process violation by … Continue Reading

California Supreme Court Limits Pre-Election Challenges to Ballot Initiatives

California courts generally should defer judicial review of ballot initiatives until after the election, the state Supreme Court reaffirmed last week in a holding that limits the scope of pre-election review. The unanimous opinion in Independent Energy Producers Ass’n v. McPherson, S135819 (2006), emphasizes that courts should consider the availability and adequacy of post-election relief in … Continue Reading
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