Articles

Important changes in 2011 to California mechanic's lien law (2010)

November 5, 2010

Significant changes to the California Mechanic's Lien Law went into effect on January 1, 2011. The changes apply to any mechanic's lien recorded on or after January 1, 2011. These changes include warning language that needs to be included in the mechanic's lien, service of the lien on the owner before recording the lien and …Read More

Lack of contractor's license provides basis for prejudgment writ of attachment

November 5, 2008

A prejudgment writ of attachment remedy available under Code of Civil Procedure section 483.010 has been characterized by many seasoned California litigators as the most aggressive action that can be taken in civil litigation. The right to attach order essentially gives the party who obtained the order to levy upon the banks accounts and property …Read More

Prevailing owners are entitled to recover prompt payment attorney's fees in California

December 11, 2005

In an important decision that substantially raises the stakes in a large percentage of construction lawsuits, in Taylor v. Van-Catlin Construction (2005) 130 Cal.App.4th 1061, the Court of Appeal held that an owner, who had prevailed in an arbitration with a contractor who sought prompt payment penalties, was entitled to recover its attorney's fees and …Read More

New law restricts scope of indemnity clauses in subcontracts on residential construction in California

November 11, 2005

A new law was recently enacted, signed by Governor Schwarzenegger on September 29, 2005, that limits the scope of indemnity clauses in subcontracts on residential construction projects in California. The law is important for developers, contractors and subcontractors who are involved, on even a part time basis, in the residential construction industry. This law will …Read More

Your additional insured endorsements – how coverage may be narrowing

October 17, 2005

Introduction A common feature of most construction contracts and subcontracts is a requirement that the contractor or subcontractor provide a certificate of insurance naming the owner and contractor as an additional insured under the contractor's or subcontractor's general liability insurance policy. However, there is a widespread misunderstanding of what such additional insured endorsements ("AIE") actually …Read More

California decision erodes certainty of 10 year limit on potential liability for construction defects

July 25, 2005

For many years now practitioners of construction law in California have understood that a "bright line" exists with regard to potential liability for construction defects – no liability 10 years after substantial completion of the project. The recent decision by the California Court of Appeal in Acosta v. Glenfed Development Corp. (2005) 128 Cal.App. 4th …Read More

The current status of California law on liability for construction defects

March 7, 2005

In 2000 the decision by the California Supreme Court in Aas v. Superior Court (2000) 24 Cal. 4th 627 had a major impact on construction defect liability in California. The Court announced a significant limitation on the scope of potential recovery by plaintiffs in construction defect actions, holding that there could be no tort recovery …Read More

Owners can use binding reference provisions to reduce their exposure in construction defect actions in California

July 28, 2003

In the last twelve months three California Court of Appeal decisions have been issued addressing the use of alternative dispute resolution procedures in real estate sales contracts. The most recent of the three, issued in April 2003, upheld the validity of provisions that required construction defect disputes to be resolved by binding reference proceedings. These …Read More

SB 800's nasty surprise: an expanded 10 year warranty for construction defects

June 9, 2003

SB 800, a law passed in 2002, significantly modifies warranty obligations owed by developers, contractors and subcontractors on residential construction projects. Because of SB 800's length and complexity, a careful review and analysis of the statute's warranty provisions is necessary to fully understand the impact of SB 800 on warranty obligations. This article attempts to …Read More

SB 800: a poorly drafted law leaves many transition issues to be litigated

April 14, 2003

(This article first appeared in the April 14, 2003, issue of the San Francisco Recorder.) The kinds of questions attorneys are hearing since passage of Senate Bill 800 reflect the widespread uncertainties and misunderstandings surrounding the law. The general contractor on a 200-unit condominium project completed before January 1, 2003, the effective date of SB …Read More

California decision further limits potential liability for construction defects

September 11, 2002

Continuing a trend, the recent decision in Carrau v. Marvin Lumber and Cedar Company (2001) 93 Cal.App.4th 281, appeared to further reduce the potential liability of developers, contractors and subcontractors for construction defects in California. By way of background, in Aas v. Superior Court (2000) 24 Cal. 4th 627, the California Supreme Court announced a …Read More

Important clarifications to California prompt payment laws

September 11, 2001

In the 1990s numerous "prompt payment" statutes were enacted and amended in California. Two recent appellate court decisions have clarified several aspects of these laws, finding that: 1. Unpaid subcontractors are entitled to recover the 2% per month prompt payment penalty on the unpaid sums IN ADDITION TO prejudgment interest (typically 10% per year). 2. …Read More

Important developments in California construction defect law

September 11, 2001

The potential for liability for construction defects is an issue of extreme importance for every California contractor. In the year 2000 several decisions by the California courts were issued that affect this potential liability, and these decisions must be taken into consideration by contractors in managing the risks arising out of defective construction. Aas v. …Read More

Arizona significantly broadens prompt payment protections

April 30, 2001

Arizona recently enacted legislation that significantly broadens the rights of contractors and subcontractors to prompt payment on construction projects. Previously, such prompt payment protections applied only to contractors and subcontractors on public works projects (Arizona Statutes §34-221) and to subcontractors on private projects (Arizona Statutes §32-1129). Under the former law, on public projects contractors and …Read More

Important new laws regarding prequalification on California public works projects

September 11, 2000

Legislation recently enacted in California threatens to impose substantial burdens on contractors submitting bids to local public agencies. The new law may also allow the prequalification process to be used to bar contractors considered by public entities to be unwelcome or undesirable from submitting bids to these entities on California public works projects. This legislation …Read More

Contractors, arm yourselves: The bonded stop notice

September 11, 1999

A little used and frequently overlooked weapon in the arsenal of an unpaid contractor on a private work of improvement is the bonded stop notice. For the sophisticated and aggressive contractor, the bonded stop notice can be one of the most effective remedies available under California law. The bonded stop notice on a private project …Read More

Navigating the payment minefield

September 6, 1999

Payment issues on construction projects in California are becoming increasingly more complex and regulated. In the early 1990s numerous "prompt payment" statutes were enacted and amended and in 1998 changes were made to these statutory schemes. Recently California courts have clarified that "pay if paid" clauses are unenforceable. Finally, effective January 1999, new legislation allows …Read More