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This blog focuses on real estate, land use and construction-related topics affecting Virginia and the Washington, D.C. metro area. With topics ranging from contract drafting and negotiation to local and regional land use project updates, the attorneys at Bean, Kinney & Korman provide timely insight and commentary on the issues affecting owners, builders, developers, contractors, subcontractors and other players in the industry. If you are interested in having us cover a specific topic, please let us know.

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Posts from October 2009.
October 30, 2009
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Topics Green

The New York times reported this week that the "Coalition for Fair Forest Certification" has filed a complaint with the Federal Trade Commission claiming that the Forest Stewardship Council has engaged in unfair and deceptive trade practices. According to the report, the main thrust of the complaint centered on FSC's higher levels of preserved land in the United States compared to other areas of the world placing the US at a disadvantage. The complaint further alleges that the USGBC LEED system is anticompetitive because it currently only accepts FSC certified wood products as approved for the LEED program applicable credit. While the Coalition does not have a website, it is widely believe that the Sustainable Forest Initiative (SFI) and other timber industry players are part of the coalition.

Scott McCaffrey of the Arlington Sun Gazette reported yesterday morning that the Arlington Professional Firefighters and Paramedics Association has filed the necessary paperwork (click here to view the Certificate of Receipt and Acceptance Local Referendum and the Statement of Petitioner for Local Referendum) with the Circuit Court for Arlington County to begin the petition process for a ballet referendum to change the system of government in Arlington County from a County Manager form of government to a County Board form of government.  Apparently, the Arlington Coalition of Police is planning on backing the petition as well.

October 26, 2009
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Topics Litigation

Construction cases by their nature tend to involve a lot of facts, witnesses, and documents.  They also tend to involve multiple parties, legal issues and arguments, and strategic procedural and motions practice.  By their nature, these realities mean that construction cases can involve quite a lot of legal work and can be expensive to try.

In one corner, we have the firefighters and sprinkler manufacturers arguing that sprinkler installation in homes and townhouses will save lives and reduce property damage. In the other corner, we have the home builders arguing that adding a sprinkler requirement is piling on more costs on an already battered industry without appreciable benefits. This debate has raged on the national stage for the last several years and now continues on the state level accross the country.

In the recent case of Burdette v. Brush Mountain Estates, LLC, the Virginia Supreme Court tackled head on what it takes to convey an easement. Burdette acquired two parcels of land by deed, which stated that the conveyance was “made subject to all easements, reservations, restrictions and conditions of record affecting the hereinabove described property,” and referred to a boundary line adjustment plat that was recorded in the land records. The plat depicted a fifty-foot easement traversing both parcels and this notation” ‘50’ PRIVATE EASEMENT FOR INGRESS, EGRESS AND PUBLIC UTILITY FOR THE BENEFIT OF [Brush Mountain’s property], IS HEREBY CONVEYED.”

Brush Mountain owned an adjacent parcel to the east of Burdette’s property. Brush Mountain submitted a request to rezone its parcel. To develop its property, Brush Mountain would need to rely on the easement for access. When Burdette discovered Brush Mountain’s plans, Burdette filed a complaint for declaratory judgment against Brush Mountain, contesting the existence of the easement.

A recent reminder e-mail from ABC-Metro Washington highlighted that the licensing regulations for the District of Columbia have changed dramatically.  Traditionally, the District of Columbia only required that home improvement contractors have a license.  That has changed.  The Department of Consumer and Regulatory Affairs now requires that general contractors and construction managers have licenses as well.  The District has imposed a series of classes of licenses that each cap the maximum value of a single project until Class A is reached which has no cap.  Each class has varying insurance requirements.

The new requirements apply to not just residential, but all commercial, industrial, governmental and other jobs.  The imposition of license requirements on construction managers is certainly of note.  We have heard of regulatory bodies taking the view that owner's representatives who are not actually in the contractual food chain and not self-performing work did not need a license.  The District has eliminated this argument.

October 18, 2009
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Topics Taxes

As a follow up from an earlier blog post discussing tax amnesty programs in the Washington Metropolitan area, Nancy Trejos's article in the Washington Post today discussed Maryland's tax amnesty program that extends until October 30 and Virginia's program that gives residents until December 5.  The District of Columbia has also approved a tax amnesty program, but has not yet announced the relevant dates.  There's no better time than the present if you owe any back taxes!

Cash flow and payment related issues continue to be of critical importance on construction projects. We recently posted on Basics of Mechanics Liens in Virginia, Maryland and the District of Columbia. We now turn to basic terms relating to notifications and required actions for payment bond claims in Virginia, Maryland and the District of Columbia. This discussion relates to public projects which are governed by statutory requirements for issuance of payment bonds and claims under those bonds. Private projects sometime have bonds as well; however, the terms of the bonds themselves would generally govern on bond claims on commercial projects. As with the mechanic's lien article, thanks go to Juanita Ferguson, a construction litigator at the firm whose upcoming newsletter article on liens and bonds forms the backbone of this post.

We are pleased to invite our readers to a seminar on October 29, 2009, The “Other” Kind of Contracting: Best Practices for Government Sales Success. As active members of Associated Builders and Contractors – Metro Washington Chapter, we are very pleased to have the opportunity to speak at this ABC-Metro Washington event.

We have recently discussed the need for construction industry players to know the basics of liens and bonds. We have also examined one case example of what can go wrong in mechanic’s lien matters by examining the failed Granby Tower project in Norfolk. Expanding on this thread, we will now turn to laying out some of the basics in our local jurisdictions for filing mechanic's liens. Thanks in particular to Juanita Ferguson, another construction litigator in our firm, whose upcoming newsletter article on liens and bonds formed the framework of this post.

We have previously discussed the New York Times article criticizing the Leadership in Energy and Environmental Design (LEED) rating systems developed by the U.S. Green Building Council (USGBC) for its arguable lack of translation to improved energy efficiency.  We also discussed energy codes and their interplay with LEED and ongoing reporting.  More recently, similar concerns were raised with respect to performance of LEED certified buildings at Dartmouth College (hat tip to Rich Cartlidge who wrote a nice piece on this topic with an ensuing series of good comments). Stephen Del Percio of Green Real Estate Law Journal has similarly analyzed the 2007 reports from the University of Massachusetts that found various LEED certified buildings used significantly more energy than anticipated under applicable modeling used for the LEED certification process.

October 12, 2009
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In case you missed it, Arlington County's Rosslyn-Ballston corridor made the NY Times on Thursday.  The article, entitled "An Oasis of Stability Amid a Downturn", provides how well Arlington County is weathering the current real estate market as compared to other locations of the country.   The article cites Arlington's 8.6% office vacancy rate against the national average of 18.3% (and the second lowest retail vacancy rate out of the 23 major markets surveyed), and attributes these relatively low vacancy rates to the corridor's well-planned, transit-oriented mix of uses and proximity to the nation's capitol, public transit/Metro system, and the County's ability to attract and retain a number of federal agencies and universities in the County.

I don't know how many people out there have been paying attention, but the General Assembly made an interesting addition to Virginia's historic preservation statute (VA Code Section 15.2-2306) this past spring.  Prior to this addition, Section 15.2-2306.A.1. of the Code of Virginia used to allow a locality to adopt or amend its zoning ordinance to designate historic districts and landmarks, to create a historic review board to administer the historic ordinance, and to require that alterations or development in historic districts must be approved by the historic review board.

The story of the collapse of the Dallas Cowboys practice facility continues to point towards serious design flaws as the culprit. The National Institute of Standards and Technology press release regarding its report states that the practice facility collapsed, “under wind loads significantly less than those required under applicable design standards”. A full copy of the draft NIST report and accompanying slideshow are quite interesting. The design and construction firm involved in the project has consistently claimed that severe weather conditions were to blame; however, the NIST report expressly concluded that wind speeds at the time of collapse were well below design loads and further that the demands at code required wind loads exceeded the structure capacity of the facility.

As noted in our previous stormwater regulation discussion, The Virginia Soil and Water Conservation Board has been considering amending their regulations.  Per the Virginia Association of Counties, the Board adopted an amended version of the regulations last night.  The extensive amendments will translate to a new public comment period to begin on October 26.  The Board is scheduled to vote on final adoption "sometime around December 9" according the VACO.

Be aware that the procedural requirements of Virginia Code Section 15.2-1246 [pdf] apply to appeals denying claims arising under contracts covered by the Virginia Public Procurement Act, according to the recent case, Viking Enterprise, Inc. v. County of Chesterfield, Record No. 080215 (Jan. 16, 2009) [pdf].

In Viking Enterprise, Viking entered into a written contract with Chesterfield County to construct a fire station. The County insisted that Viking had to remove and replace part of a concrete floor. Although Viking believed the floor could be repaired without removing and re-pouring the concrete, it complied with the County’s request and submitted a claim for $86,531 for additional work. The County’s board of supervisors denied the claim on July 25, 2005, and the clerk of the County’s board of supervisors gave Viking written notice of that denial in a letter dated August 2, 2005.

The construction industry is receiving somewhat mixed economic signals lately. On the good news front, the home building industry which has been mired in recession far longer than the rest of the economy is showing signs of life. Bloomberg reported that sales of new homes climbed in August to a high for the year. The news was tinged with some contrary news that pricing reflected competition from large numbers of foreclosures of existing homes in the marketplace. Bloomberg also reportedly separately that estimates of new home sales for 2010 may increase substantially as well, particularly if Congress extends the tax credit for first-time buyers.