The Alabama Supreme Court recently reinforced its policy of giving priority to construction lenders over materialmen in its holding in GHB Construction and Development Co., Inc. v. West Alabama Bank and Trust, 2019 WL 1416893 (Ala. 2019). GHB, a contractor, challenged the priority of its materialman’s lien against a future-advance mortgage under which no funds had been extended to the borrower at the time work commenced. The Court held that because the future-advance mortgage was recorded prior to GHB’s commencement of work, the future-advance mortgage is given priority over GHB’s lien regardless of whether proceeds had been disbursed prior to the commencement of work. (more…)
Condominium Developers in Texas Can Protect Themselves from Future Lawsuits Through the Use of Declarations
A Texas court recently affirmed the dismissal of construction defect claims by a residential condominium unit owners’ association because it lacked standing to assert claims against the developer, general contractor, and subcontractors of a new high-rise project in Houston. (more…)
The Federal Circuit Court of Appeals very recently issued an important decision in K-Con, Inc. v. Secretary of the Army which requires a construction contractor to provide performance and payment bonds, even though the contract does not expressly require it. The Court relied on the Christian Doctrine to incorporate into the contract, as a matter of law, bond requirements from the Federal Miller Act that were not physically written in. (more…)
The Fourth District Court of Appeals in Florida recently issued a decision in Gindel v. Centex Homes, that increases the amount of time homeowners have to file a lawsuit against homebuilders. The Court relied on basic principles of statutory interpretation to conclude that issuing pre-suit notice is an “action” under Florida’s statute of repose. (more…)
Although licensed home builders in Alabama are not required to maintain liability insurance, a new law requires them to disclose whether or not they have such insurance prior to the commencement of construction. The insurance disclosure must be signed by the home builder and the homeowner, as well as a witness selected by the homeowner. This will require home builders to modify their normal practice of engaging with homeowners for new work. Home builders may wish to build the insurance disclosure into their written contract for construction, as long as there is also a place for the homeowner’s witness to also sign. This new law is codified at Alabama Code Section 34-14A-19, and went into effect on June 1, 2018. Failure to comply may lead to sanctions by the Home Builders Licensure Board.
In 2013, China announced its plan to fund and construct a global transportation and infrastructure network known as the Belt and Road Initiative (“BRI”). Since that time, BRI projects have helped China to become a rival to the United States and European Union on the geo-political scene. They have also allowed Chinese companies to close the gap with their western counterparts in the global construction, engineering, advanced manufacturing, and logistics sectors. Western companies and governments need to take notice or risk being left behind. (more…)