Georgia Construction, Bond & Lien Law Blog


The Construction Contract Process

Posted in Contracts by Blue Blog on the February 22nd, 2015

As our long-time readers know, Mark Cobb is adjunct faculty at Thomas University.  Currently, he is leading a class on construction law and business, and one of his students, Travis Williams, Jr., is our guest blogger.  In addition to being a student, Travis is a co-owner of Thomasville Glass and Exteriors, where he specializes in estimation and sales for commercial projects.  Thomasville Glass is a full service family owned glass company that was founded in 1961.  In 2008 Thomasville Glass was recognized by Glass Magazine as a Top 50 glazing contractor in the U.S.

by James Travis Williams, Jr.

Construction Process

Much of the work that is done at a company in the construction or development field is done before any manual labor begins. Having people in place to successfully bid and or negotiate contracts is extremely vital to construction companies in today’s market. As the economy changed so to has the margins in the construction field, one mistake could make a potentially profitable job very costly. It is important to know what type of contract you are agreeing to before you sign the dotted line.

There are many different types of contracts, but the two most common in construction are the single contract and the multiple prime contract. The single contract is the more simple of the two and it is an agreement for a specific project between an owner and a contractor. Multiple prime contracts are more complicated. A multiple prime contract usually covers construction that will be completed in phases, consisting of different construction contracts for different phases, as well as including multiple contractors at once. Multiple prime contracts are typically seen on larger projects such as hospitals, large industrial structures and resorts.

In order to be execute a construction contract you must first find a project that is a good opportunity for your company. Secondly, you will need to check the pre-qualification section of the specifications in order to make sure your company is eligible to bid on the project. Next, you need to estimate the project in order to find the exact costs of materials and labor. It is very important to read the specifications very carefully when bidding a project, a lot of money is lost by people who do not know what they should be supplying. After these costs are considered you will need to cover your overhead expenses as well as add in profit. Once you have completed the estimating process you will be able to submit a bid to either an owner or general contractor, depending on your line of work. Once a bid has been accepted you will begin the contract execution process.

Once you have agreed upon price and terms with the owner or general contractor they will send you an agreement detailing what is to be included in the project. These documents must be signed and returned to the general contractor / owner. This is a very important time in the contract process, and is when many mistakes are made. Every contract needs to be read carefully before signing, even though you may have had verbal commitment for something that does not mean it will hold up in court if that were ever necessary, but what is written on that contract most likely will. Therefore, do not assume anything when signing a contract, always take your time and read the small print, or you could be making a costly mistake.

Next, you will need to provide insurance certificates and bonding capacity in order for them to be verified by the appropriate party. One thing to consider is that items such as additional insurance or additional bonding capacity will increase the costs of a project. Usually these items will be seen in the pre-qualification section of a project.

Your company will need to have a submittal package (samples of the materials as well as color charts etc.) approved by the owner before ordering material. Remember, the subcontractor is obligated to supply the project with materials that were specified on the plans, or have an approved equal vendor that has been approved by the architect and or owner. Depending on your trade, mainly subcontractors, you will be asked to supply the appropriate party with shop drawings. Shop drawings are a set of elevations detailing the size, location and type of material to be used.

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The Lender’s Perspective on Construction Projects

Posted in Construction Lending by Blue Blog on the February 12th, 2015

As our long-time readers know, Mark Cobb is adjunct faculty at Thomas University.  Currently, he is leading a class on construction law and business, and one of his students is today’s guest blogger.  Frederick Cruess is a business administration major and a champion athlete.  Frederick write about the lender’s role on construction projects.

Georgia Construction Lending Issues

by Federick Cruess

 
The art of lending by definition is quite simple, it is the providing of funds temporarily, with the expectation of repayment along with interest. The true concept of lending may be slightly harder to grasp because it is a more abstract than just a concrete definition. The biggest concern of a lender is to make sure that the loans are used to improve the property and that they keep the security interest a priority over the interest of others. Also the lender does not want to have their loan construed by a third party.

Commercial banks are the most common type of construction based lenders. This is because they have the staff necessary to underwrite the borrower’s abilities and the financial backing to make the necessary loan. Other types of lenders are pension funds, life insurance companies, or government entities, all of which actively participate in construction lending. The last type of lender is called a mezzanine lender, which is a person that makes a loan to a project owner but is not secured by the actual project itself.

The terms of a loan are often very complex, so they usually separated into a detached agreement, called a construction loan or building loan agreement. The loan agreement usually contains the conditions of the initial closing. It is also important for the lender to approve the borrower’s agreement, and go over it with their contractor and architect. Doing so will help to provide the scope of the maximum fees, construction costs and the schedule of the construction, all of which are provided by the borrower’s agreement. The lender may also want the contractor and the architect to enter into agreements with the lender and borrower, consenting to the desired assignments.

A promissory note, is basically a note of promise that the borrower will pay the principal amount, or the amount of the loan, back to the lender along with any incurring costs or interest. Interest accrued on the principal amount may be variable or fixed, depending on the lender’s agreement with the borrower. A mortgage, also known as a deed of trust, is giving the lender interest in the property that is being improved as security of the debt owed. Leases, security agreements, and contract rights are some of the other documents that secure repayment on construction loans.

After the lender has evaluated all the other participants involved in the agreement, to make sure that they are fully capable and have the financial resources to complete the project, it is essential that the lender gets documentation that allows them to take the position of the borrower if there is some default, and finish the project. The lender may also have the right to sue the participants if they do not carry out their respective duties, for intentional or negligent impairment of the lender’s security interest. The lender will also have rights under payments and performance bonds if it has been named obligee.

There are many types of defaults that can occur with construction contracts, whether it be from things such as financial failure, running behind schedule, or even some environmental factors. An intelligent lender is going to make sure they’re prepared for unforeseeable circumstances, and negotiate work outs so that they will receive the amount owed. In the case of a default the lender does not want to necessarily impair its security but instead, negotiate a way to continue the project, even if it means extending the maturity date.

In conclusion, the lender’s largest responsibility is to ensure that they make all of their money back, plus the additional interest and fees. They must keep their interest priority over all else and ensure that the project runs as smoothly as possible. The idea of a lender may seem quite simple, but the complexity is sometimes too subtle to see on the surface. Rest assured, to be a profitable lender, one must be very clever and intelligent.

The thoughts and expressions contained in this blog post are the responsibility of the author and do not necessarily reflect the options of the Georgia Construction Lien & Bond Blog or the Cobb Law Group.

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Georgia’s Right to Repair Act: Homeowner’s Pre-litigation Requirements for Construction Defect Claims

Posted in Contractor Liability,Contracts by Blue Blog on the February 9th, 2015

Construction Contract Requirements in Georgia
by Stephanie Dodson Dougherty

The Georgia Legislature enabled the Right to Repair Act (O.C.G.A. § 8-2-35, et seq.) in 2004 to reduce construction-related litigation by providing resolution alternatives for legitimate construction disputes. Although the stated purpose of the Act is to protect the rights of homeowners, it actually heightens their burden by requiring precise pre-litigation procedures: the notice of claim process. Any suit filed before compliance with this process will be stayed on application by a party until these requirements are met (except for personal injury or death cause of actions included in the claim). However, if the statute of limitations period for a claim undergoing this process will expire during the process, the owner may file suit to preserve their claim. That action must be immediately stayed until this notice of claim process is complete. The homeowner and the contractor may alter this statutory notice of claim process by written mutual agreement. Without such agreement, the statutory process applies.

Pre-construction Notice to Homeowner
When entering into a contract, contractors are required to notify would-be homeowners of the contractor’s right to resolve alleged defects before initiating litigation. The notice, which may be in the contract, must be conspicuous, substantially match the following language:

GEORGIA LAW CONTAINS IMPORTANT REQUIREMENTS YOU MUST FOLLOW BEFORE YOU MAY FILE A LAWSUIT OR OTHER ACTION FOR DEFECTIVE CONSTRUCTION AGAINST THE CONTRACTOR WHO CONSTRUCTED, IMPROVED, OR REPAIRED YOUR HOME. NINETY DAYS BEFORE YOU FILE YOUR LAWSUIT OR OTHER ACTION, YOU MUST SERVE ON THE CONTRACTOR A WRITTEN NOTICE OF ANY CONSTRUCTION CONDITIONS YOU ALLEGE ARE DEFECTIVE. UNDER THE LAW, A CONTRACTOR HAS THE OPPORTUNITY TO MAKE AN OFFER TO REPAIR OR PAY FOR THE DEFECTS OR BOTH. YOU ARE NOT OBLIGATED TO ACCEPT ANY OFFER MADE BY A CONTRACTOR. THERE ARE STRICT DEADLINES AND PROCEDURES UNDER STATE LAW, AND FAILURE TO FOLLOW THEM MAY AFFECT YOUR ABILITY TO FILE A LAWSUIT OR OTHER ACTION.

Notice of Claim
The homeowner must give written notice of the claim to the builder at least 90 days before filing suit. The notice must indicate that it is intended to meet the statutory requirements and state that the homeowner asserting a construction defect claim. This notice must describe all claims and provide any evidence of the nature and cause of the defects.

Contractor’s Response to Claim
After receiving the notice, the contractor must provide a written response within 30 days that either offers to settle the claim or proposes an inspection of the area subject to the claim. If the contractor rejects the owner’s claim and refuses to remedy the defect or settle, or does not respond timely to the notice, then the owner may bring suit. Contractors should be aware that they are still required to respond timely to the notice, even if the notice was not accompanied by all the required documents.
The owner may reject the settlement offer in writing to the contractor.

Inspection
If the contractor proposes an inspection (instead of offering a settlement), the owner must provide prompt and reasonable access to the property within 30 days. This inspection may be done by the contractor, its subcontractors, agents, experts, or consultants. Once on site, the inspectors may document the alleged defects; perform tests to fully evaluate their nature, extent, and cause; and determine the necessary remedies. Destructive testing is allowed, but the contractor must provide advance notice and return the area to its pretesting condition.

If these inspections or tests are insufficient to allow the contractor to fully evaluate the defect, the contractor must again notify the owner in writing of the need for additional testing. Then, the owner must again provide prompt and reasonable access for the second round of inspections. These must be diligently pursued and, to the extent reasonable, completed within the original 30 day inspection period.

Construction Site Problems

Contractor’s Post-Inspection Offer or Rejection
Once the necessary inspections are complete, the contractor has 14 days to serve on the homeowner one of the following:

– A written offer to fully or partially remedy the defect at no cost to the owner
– A written offer settle monetarily
– A written offer combining repairs and monetary payment
– A written rejection of the claim and supporting reasoning.

If the contractor rejects the claim or fails to serve any response, the owner may file suit for the claim in the original notice.

Owner’s Response to Post-Inspection Offer
If the homeowner accepts any of the first three offers above, the contractor must follow through within the agreed timeframe. If the contractor fails to make good on the accepted offer, the owner may file suit for the claim in the original notice. Contractors should be aware that their offer and the owner’s acceptance may be filed with the lawsuit to create a rebuttable presumption of a valid settlement agreement that should be enforced by the court.

If the contractor offers to remedy the defect, the owner must respond in writing within 30 days otherwise the offer is deemed accepted. Once the offer to repair is accepted, the owner must provide prompt and unfettered access to the area to complete the repairs.

If the owner rejects the offer to remedy or settle monetarily, the owner must provide written notice to the contractor. The contractor may make a supplemental offer within 15 days of receiving the rejection. If the owner rejects the supplemental offer, the owner must provide written notice.

If the owner rejects a reasonable offer or reasonable supplemental offer, their recovery is limited to the fair market value of the settlement offer or actual cost of repairs made, or the monetary settlement offer amount. The homeowner is precluded from recovering costs or attorneys’ fees incurred after the unreasonable rejection.

If the owner accepts the offer and the contractor completes the work or payment required by the offer, the owner is precluded from filing suit for the claim in the original notice.

Other Provisions
The contractor’s performance does not affect the parties’ rights and obligations under a liability insurance policy and should not be considered a payment of an insured lost. Subrogation of insurance is also provided for statutorily.

Additional procedures for an association to bring suit against a contractor for defects in the common area of a common interest community are also provided. In addition to the notice of claim process, these additional requirements involve the association vote, prior good faith efforts to resolve the claim, notice to owners, and permissible destructive tests.

The Act does not affect the contractor’s right to seek recovery from subcontractors or other professionals.
These requirements apply to contractors required to be licensed under Chapter 41 of Title 43.

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Delicious Constructions

Posted in Fun! by Blue Blog on the January 27th, 2015

Chocolate pavilion (blog)

 

by:  Dorothy Spencer

Barry Callebaut North America, a branch of the world’s largest chocolate manufacturer, is assisting several engineers and architectural colleagues at Princeton University to test the potential of using chocolate as a building material.

The group have conducted a series of tests using various formulas to determine its strength and elasticity using the hypothesis that with less fat and smaller particles, and greater surface area, the chocolate is stiffer, and thus, more cohesive.

In fact, the group has designed its first full-scale prototype (shown above) as a pavilion designed for use at a café.  The pavilion will be on display for several weeks, of course in a temperature-controlled environment in a New York City building.  One of the scientists, Alexander Jordan, writes, “To avoid exposure to direct sunlight coming through the south-facing windows, obstruction of customers and staff traffic, and accidental collisions, the shell was designed to use the vertical space and span between the fixed pavilions that separate the café’s tables.”  The pavilion was constructed by casting pieces of chocolate (with a melting point of 125 degrees Fahrenheit), assembling them over a model, and held together by depositing molten chocolate through a syringe.

Jordan goes on to say, “Although we have associations with chocolate as a highly refined food, there are few precedents of how to translate its familiar sensation into architectural and engineering language.”

Chocolate lovers from all around the globe are happy to see this kind of study and give it an A+, keep up the delicious work!

willy wonka (blog)

Exceptions to “No Damages For Delay” Clauses

Posted in Case Law,Damages by Blue Blog on the January 26th, 2015

contruction contracts include no damages for delay provisions
A “no-damages-for-delay” (NDFD) clause is a very common contract term that provides a defense for the delay-causing owner or general contractor to assert against the harmed party’s request for damages. This defense can be applied to protect the owner from a general contractor’s delay claim or the general contractor from a subcontractor’s claim. These clauses allow additional time, but no additional compensation. Without such a clause, the contractor generally has the right to a time extension and damages if the delay was caused by the owner.

Courts generally enforce clear and unambiguous NDFD clauses, but there are a few exceptions. Some of these include the protected party’s (1) active interference or (2) fraud or bad faith (including willful, malicious, reckless, or grossly negligent misconduct); (3) delay not contemplated; and (4) unreasonable delay.

1. Active Interference:
If the protected party intentionally inserts themselves into the harmed party’s execution of duties, they may be guilty of active interference and therefore precluded from relying on the NDFD clause. In the recent (out-of-state) case C&C Plumbing & Heating, LLP v. Williams County, the North Dakota Supreme Court recognized the “active interference” exception. This case found the owner’s active interference with the contractor’s preferred means and methods to be sufficient cause to trigger the exception and allow damages despite the inclusion of a NDFD provision. The Court reaffirmed that the active interference exception does not require a showing of bad faith by the interferer, but “an affirmative, willful act that unreasonably interfered with the plaintiff’s performance of the contract.” However, active interference does not include “a simple mistake, error in judgment, lack of total effort, or lack of complete diligence.”

2. Fraud or Bad Faith:
Courts generally will prevent the party demonstrating intentional misconduct – such as fraud or bad faith – from escaping liability through a NDFD clause. Contract provisions seeking to prevent liability for fraud are considered to be against public policy and therefore unenforceable. So the party exhibiting fraud or other willful misconduct that causes delay cannot hide behind a NDFD clause. An example of willful and malicious misconduct can be found in U.S. for Use and Benefit of Evergreen Pipeline Construction Co., Inc. v. Merritt Meridian Construction Corp. The contractor caused delay and harmed a subcontractor by refusing to make full payment (thereby preventing sufficient hiring), grossly inflating backcharges, and stealing the subcontractor’s materials. The Court found that such willfully malicious conduct prohibited the contractor from enforcing the NDFD clause against the subcontractor.

Willful concealment of foreseeable delay-causing facts or circumstances may also preclude the wrongdoer from relying on the NDFD clause. In Howard Contracting, Inc. v. G.A. MacDonald Construction Co., Inc., the city willfully concealed the facts that excavation would require a special dump site and that the construction would be federally prohibited for a significant time. These factors caused inevitable delay for which the contractor was unable to plan. The Court prevented the city from enforcing the NDFD clause against the contractor’s claims.

3.  Delay Not Contemplated:
Some courts have prevented the enforcement of a NDFD clause when the delay is not reasonably contemplated by the parties at the time of contracting. The applicability of this exception is largely determined by the exact language included in the NDFD clause and its intended scope. Such circumstances that have qualified for this exception include a city’s failure to attain a required right-of-way and a subcontractor’s inability to perform due to severe and continuous schedule and access mismanagement by the contractor.

4.  Unreasonable Delay:
Some courts have found that an unreasonably long delay may justify the preclusion of the NDFD clause. Since there is no set rule or general understanding of how long a delay must be to be considered unreasonable, all the facts surrounding the circumstance of the delay should be considered. This exception usually has not required the harmed party to abandon the project, although some courts have defined “unreasonable delay” to be “a delay so long as to justify an abandonment of the project.”

These cases underscore that including no-damages-for-delay clauses is not an absolute defense for the delay-causing party. These clauses should be carefully drafted and all parties should understand the potential for exceptions. Each jurisdiction interprets these provisions differently and recognizes different exceptions, so it is important to seek legal advice given your specific set of circumstances.

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Cobb to Present Live Webinar on How to Create Better Construction Contracts for Free

Posted in Contracts,Honors & Awards by Blue Blog on the January 23rd, 2015

Cobb Law Group to Present Webinar on Improving Construction Contract

Clear your schedule and mark your calendars, Georgia Construction Contract Attorney, Mark Cobb, will be leading a Webinar on Better Customer Contracts: 15Free Things You Can Do To Create Better Sales Contracts.

When:  Wednesday, January 28, 2015 at 3:00 EST

Sponsor:  Cabinet Makers Association

 

For more information, please click on the links below . . .

To see the announcement on FDMCDigital, please click here > >

To register as a participant for the CMA’s webinar, please click here > >

This low-cost seminar is focused towards the needs of owners and credit managers and small to mid-sized contractors, subcontractors and building material suppliers; at CMA’s request, Mark will discuss tips and strategies which the participants can implement immediately after the webinar!  Although the title is Better Customer Contracts: 15 Free Things You Can Do To Create Better Sales Contracts, Mark hopes to have time to offer even more tips.  So register today to listen to the live Webinar presented by our own construction lawyer, Mark Cobb.

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Cobb on Atlanta Legal Experts Radio Show

Posted in Fun!,Honors & Awards by Blue Blog on the January 22nd, 2015
Cobb Speaks on Construction Law Fundamentals on Atlanta Legal Experts

Mark Cobb (second from the right) and the other panelists inside the studios of Atlanta Legal Experts

by Mark A. Cobb

Earlier this week, I had a wonderful experience: I was invited to be interviewed on the Atlanta Legal Experts radio show to discuss Georgia Construction Law. It was quite an honor to be asked to appear on this show as Atlanta Legal Experts is one of the many great shows on Buckhead Business Radio. To hear a podcast of the show and my comments about materialmen liens and payment bond claims, please click here > > >

Although I had to arrive at their Buckhead studio pretty early in the morning, as soon as I entered the green room, the producers and hosts made me feel comfortable about being interviewed. Emily Rowell was the show’s host and Alvaro Arauz was the co-hosts. Both demonstrated wonderful demeanors and worked well together, and, they asked me and the other panelists some very good questions.

The had invited three other Atlanta-area attorneys to be interviewed during this show. Prior to meeting at the studio, I did not know any of these attorneys, but they were each very personable and professional. As it turns out, Nate Hansford, a workers’ compensation lawyer in Atlanta, was graduated from my alma mater (Washington and Lee University) with mutual interests and connections.

Another bright, energetic attorney on the panel was Myrlin Earle; Myrlin began his practice representing insurance companies, and now he focuses on personal injury work. As with many litigators, he had some very exciting stories to share about his courtroom experiences!

The third panelist was Lorena Saedi of the Saedi Law Group who practices bankruptcy law in Atlanta. In discussing her firm, she emphasized that clients meet with an actual attorney and not a legal assistant. This is a great policy and it’s always refreshing to meet attorneys who care about their clients.

Georgia Lien Law Expert Mark Cobb

Atlanta Attorney Mark Cobb discusses construction liens and contracts on Atlanta Legal Experts Radio

The show allowed me to educate the audience on subcontractor rights regarding payment for their materials, labor and services on construction projects throughout Georgia. As I discussed the advantages that subcontractors and building material suppliers have in collecting the money they are owed through the use of liens, surety bonds and Georgia’s Prompt Payment Act, I also pointed out that construction lawyers such as myself often sit in the middle of the project and we consult with–and bring in–legal specialists as needed. Both our large prime contractors and regional subcontractors as well as contractor laborers may experience a job-related injury on the construction site; furthermore, there are so many parties involved on a construction project that the risk for bankruptcy is real and affects those downstream (it typically does not affect their rights to file a mechanics or materialman’s construction lien or their right to file a claim pursuant to a payment bond.) Thus, it was very beneficial to me to make the connections with these other Atlanta Legal Experts.

Also, as a group we were able to discuss current legal trends. Undocumented aliens, for example, have some (but not all!) of the rights given to United States citizens. I was able to discuss some of the fraud issues which we have encountered in our practice when an unscrupulous general contractor or subcontractor tries to take advantage of someone who is undocumented or someone who struggles with English because it is their second language. These individuals deserve competent legal representation.

Our group also discussed the economy from our unique perspectives. I was able to share that our clients–regardless of their position as a prime contractor, a specialty trade subcontractor or a materialmen–are seeing larger construction projects, more opportunities to bid for work, and more new developments getting underway.

If you missed the show or have any questions about Georgia construction law including construction contacts, construction liens, materialmen’s lien rights, payment bonds (including Miller Act and Little Miller Act), delays or damages, please contact me.

Atlanta Construction Law Expert Mark Cobb

Atlanta Legal Experts (l to r) co-host Alvaro Arauz, Myrlin Earle, Nate Hansford, Lorena Saedi, Mark Cobb and co-host Emily Rowell

Thank you Atlanta Legal Experts for choosing me to be interviewed and continued good luck with the show in the future!

Mark Cobb Atlanta Construction Law on Atlanta Legal Experts

Mark Cobb joins the panelists on Buckhead Business Radio’s Atlanta Legal Experts show

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Cobb Interviewed in Expert Series

Posted in Honors & Awards by Blue Blog on the January 8th, 2015

Our firm’s founding partner, Mark Cobb, was recently chosen to be the inaugural interview for a new series called the Construction Expert Interview Series. Mark was chosen to participate because of his leadership in Georgia construction law and, in particular, subcontractor law, mechanics and materialmen lien law, payment bond claims, and construction collections.

Informing clients about their rights as construction professionals is a significant part of Mark’s daily job, and he welcomes any opportunity to disseminate information to contractors, specialty trade subcontractors and materialmen about using Georgia’s laws to their advantage and to enhance their legal rights. Mark thoroughly enjoyed the interview process as he frequently speaks at seminars and training workshops throughout the southeast on lien and bond issues as well as various construction contract topics.

The interview was sponsored by Surety Solutions. To learn more about Georgia construction law and to read the article in its entirety, please click here > >

If you have any questions regarding Georgia construction contracts, any type of construction liens, Miller Act or Little Miller Act claims, please feel free to contact us today!

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Top Ten New Years Resolutions for Construction Professionals

Posted in Practical Tips by Blue Blog on the December 30th, 2014

Now is the time for Contractors to make their New Years Resolutions

 

by Mark A. Cobb

As humans, we use milestones to mark our journeys; as one year fades into another, it is natural for us to claim the calendar change as an opportunity to make changes within ourselves. Fortunately, in 1885, the Church of England’s Bishop Beckwaith provided us with a useful formula for making effective and permanent changes in our lives:

Plant a thought and reap a word;
Plant a word and reap an action;
Plant an action and reap a habit;
Plant a habit and reap a character;
Plant a character and reap a destiny.

 

The most successful humans are leaders in both their personal and their professional lives; consequently, those who want to succeed are willing to change–to improve themselves, their businesses and their lives. Thus, without any pretensions, we offer this year’s list of the Top Ten New Years Resolutions for Construction Professionals:

10. Take time to understand the other person’s position:

It doesn’t matter whether you are a design professional trying to fit your client’s desires (and needs!) into a budget or whether you are a project manager negotiating a change order with a subcontractor, it is very important to recognize the validity of the other person’s opinion. Acknowledging and understanding another person’s position can go a long way in avoiding potential disputes or quickly resolving a current dispute.  Respect appears to be disappearing in the construction industry–promise to prevent its further erosion in the new year!

9. Money is important, but it isn’t the most important thing:

With today’s increasingly tight profit margins, even small bumps can derail projects and bankruptcy contractors, thus, there is an ever-increasing temptation to deny payments to those downstream, to cut-corners where corners should not be cut, and to worry more about your own job-security than the success of the project. Do not give sway to these temptations. Instead, be professional; treat others the way you wish to be treated, and look for a successful project completion for all of the participants. This is a wonderful time to remember that reputation, dignity, and honor trump profits in every long-run scenario.

8. Use fair and balanced construction contracts:

We see more and more general contractors handing down increasingly onerous construction contracts which could be summed up with the following statement:  “Subcontractor Agrees to do anything and everything the Prime Contractor requires (whether known or unknown to the Subcontractor); and, for this work, the Subcontractor will only be paid the amount stimulated below if and when the Prime Contractor wants to.” This is neither fair nor right. Contracts have become solely about transferring risk and listing reasons to withhold payment; instead, we argue that construction contracts should be about ensuring mutual successes on a given construction project, reaching just conclusion in the event of a (real) dispute, and cooperation between the project owners, prime contractor, subcontractors and material suppliers.

7. Watch those emails and texts:

Almost daily we are appalled by construction professional’s reliance on text or emails to transmit important communications and even contractually required notices. Unfortunately, this type of communication lends itself to a “too concise” ability to communicate and “too casual” form for addressing important topics. If something is important, then take the time to write a letter (it forces you to be more professional, more accurate and less likely to be misinterpreted) and attach it as an email. Do not let text and email “conversations” be substitutes for meetings where you can meet face-to-face. And–frankly, we are shocked about this–watch the curse words and pejorative statements in your emails. They can (and will) be used against you.

6. Manage Your Stress:

From project scheduling to unexpected weather conditions, from slim profit margins to job security, the construction industry is filled with stress. There are wonderful resources available to help everyone deal with stress, so promise to avail yourself of some of these resources. Remember to spend time with your family, relax, and, if necessary, find a new job!  Stress damages your physical body, it decreases your profitability, and it destroys relationships.

5. Know your contracts:

If our clients had taken the time to review their construction contracts and the possible consequences of a breach or a problem, they could have prevented many problems. It may seem boring or redundant, but review every contract as if it were your first contract; then, as the project continues, occasionally review the contract to remind yourself of potential pitfalls and notice requires. Meet EVERY notice obligation which you have.  If you don’t have the time, desire or interest in doing this, then find a competent construction lawyer to help you manage this aspect of your business.

4. Set realistic, positive goals:

If your business isn’t growing, now is an ideal time to evaluate where your business has been and where you want it to go. Consider establishing a business plan and/or a marketing plan. Consider joining professional organizations which can help you with these projects (such as the American Subcontractors Association, Associated General Contractors, Construction Suppliers Association, etc.). Take a look at the type of projects on which you work and whether or not these are the projects which you want; consider taking on larger projects (but don’t stretch yourself too thin); if you are not currently bonded, take steps to build a relationship with a quality surety.

3. Treat your employees well:

This one should be obvious, but the stress, economic limitations, and competitive bidding can make employers forget that their employees are their finest asset. There are many ways to improve employee relations, and only some of them involve money! Provide educational opportunities, safety training, positive recognition, even treating an employee to lunch can lead to a more satisfying workplace.

2. Build the next generation of construction professionals:

It is universally acknowledged that the skilled-labor work force is diminishing at an alarming rate, and that means labor shortages and increased labor costs for every prime contractor and subcontractor. We advocate adequate training for your employees, but don’t forget the next generation of employees. There are countless opportunities to work with your area technical colleges to build programs specific to your needs, if you are looking for a place to make a year-end donation, consider funding a scholarship at your local school to train the next electrician, mason, or project manager! Be creative and participate in a grass-roots program to stimulate young people to pursue careers in the construction field.

1. Be honest.

This one, too, should be obvious. Be honest with your yourself–know your strengths and weaknesses and strive for improvement. Be honest with your family and your co-workers; truthfulness builds respect from those around you.  Admit your mistakes, acknowledge when others are right (even though you may be wrong), and build your destiny on a solid foundation.

Whatever your goals are for the coming year, the construction attorneys at the Cobb Law Group wish you success. Now is a great time to plant the thoughts directed by Bishop Beckwaith to create a new destiny for yourself and your business.

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Happy Holidays

Posted in Uncategorized by Blue Blog on the December 19th, 2014

Christmas Greetings to Our Construction Clients

During this special holiday season, the attorneys and staff of the Cobb Law Group would like to take this opportunity to thank our clients, friends, colleagues, and vendors for their support. We truly believe that our clients are among the finest construction professionals in the country, and it’s their hard work and their integrity which we protect.

We represent construction professionals in many different situations, but many of our clients are contractors or material suppliers who have fully performed under some type of contract but another party failed to pay them. Other clients look to us to help them with their contract drafting and negotiation or to resolve disputes. Regardless, it is an honor to be a trusted advisor to these wonderful people.

Whether we represent a large Fortune 500 company or a local, mom-and-pop contractor, we understand that it is about the people–it’s about relationships, it’s about integrity, and it’s about hard work. We are grateful that so many of our clients share the same values as we do. In this day, finding quality construction professionals can be difficult, but we have the honor of working with some of the best!

As we look back every year, it is natural to reflect upon the lessons and changes which have occurred. It is especially appropriate this year as 2014 brought many positive changes to our firm and business. To recap just a few of our highlights from the year:

  • Our client base has almost doubled!
  • We filed scores of Georgia materialmen’s liens and payment bond claims
  • We were featured speakers at the AGC Georgia’s First Construction Forum and Marketplace
  • Mark was a co-author of the book Construction Subcontracting, A Comprehensive Legal and Practical Guide which was published this past spring by the Forum on the Construction Industry a part of the American Bar Association
  • We’ve hired a new construction and environmental lawyer (who will be joining us in January 2015)
  • We published the 28-page booklet entitled Georgia Material Supplier Collection Handbook
  • We presented “Construction Contracts 101″ for a continuing education seminar for architects and engineers
  • We were asked to speak at a roundtable sponsored by the Construction Suppliers’ Association
  • We moderated a telephone conference for a nationwide construction lawyer’s group on emerging trends in construction payment issues
  • Christopher was nominated for Leukemia & Lymphoma Society’s Man of the Year
  • Mark was Chairman of the Board of Trustees for The Vashti Center (2d year)
  • Mark was approved to teach an undergraduate class on Construction Law for spring 2015 at Thomas University
  • Mark was asked to lead a Webinar on construction contract basics for the Cabinet Makers’ Association
  • The Cobb Law Group continues to be a leader in Georgia’s Subcontractor Law

2014 was a great year, but our expectations for 2015 are even higher! Thanks to a tremendous and loyal client base, great lawyers and staff who are active in their communities, and several surprises in the pipeline, we are confident that the coming year will be even better!

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