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 January 2010.
January 29, 2010
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Topics Green

Empire State Building in SpringThe Empire State Building retrofit project is reaching for rarefied air: improved energy efficiency,  reduced carbon emissions, and rapid and healthy return on investment.  Recent case study documentation for the project suggests this project will hit the ball out of the bark on all fronts.  Highlights include:

An estimated 38% energy savings compared to high level class A office space

A 3.1 year payback on the incremental cost increase to fund proposed energy efficiency measures

  • An 9.2% estimated tenant space savings when increased project costs are weighed against the net present value of energy savings to tenant space fit-outs
  • Reduction of well over 100,000 tons of CO2 emissions over 15 years

With well over two thousand bills filed for this session, I was curious to see what our local urban delegates and senators have chief-patroned this year.  So here's what they're up to:

Delegate Brink has patroned HB 1260, which proposes that the Uniform Statewide Building Code should also apply to buildings or structures built on state-owned property and that the Department of General Services would act as the building official for all such buildings.  He has also patroned HB 1314 which contemplates providing financial incentives equal to twenty percent of delinquent taxes collected by tax collectors, chargeable to the taxpayer in addition to the amount of the delinquent taxes.

The Trends in Building Green panel last Thursday morning was a great success.  There were a couple interesting take-aways from the panel's materials and presentations:

  • Smart property owners need to be taking energy savings seriously; Tommy Russo, Chief Technology Officer of Akridge, described their highly detailed efforts to analyze and implement projects with a reasonable return of investment horizon;
  • Per Tom Mawson, Executive Director of the USGBC National Capital Region Chapter, the "USGBC is all about market transformation"
  • Bobby Christian, CEO of Green 20 Now, LLC, and Mike Scelzi, President of Net Metering, Inc. demonstrated just how far we have come with access to energy metering information, and its implications on operations and cost savings
  • Chris Pyke, Director of Research for USGBC, provided a wonderful overview of where LEED has been and where it may be going, in particular in the context of on-going performance of buildings and where those measures may not match design.  For Chris and USGBC, the question primary question: "Is there a commitment to demonstrated performance ... which is leadership" with regards to energy efficiency and sustainability.
  • I covered some of the press crititiques of LEED, what the actual projects demonstrated, and finally where the performance debate may create significant liability issues in the future

My presentation is here for those who are interested.  Mike Scelzi was also kind to provide his presntation as well.  Please feel free to contact me if you have any questions or are interested in tracking down some of the participants or issues we covered.

EPA Renovate Right Brochure

Owners, developers and builders working in the renovation arena beware: the EPA's new regulations on lead paint take effect on April 22, 2010.  The regulations are contained at Title 40, Part 745 of the Code of Federal Regulations.  There are some very important highlights:

Effective April 21, no firm may offer or perform renovations in "target housing" without certification (40 CFR 745.81). Target housing means any housing constructed prior to 1978, so renovators working in homes, apartments or condominiums built prior to 1978 need to take this seriously.

Virginia Delegate Mark Cole is up to it again, proposing another amendment to the business, professional and occupational (“BPOL”) tax laws. Delegate Cole sits on the House of Delegates Finance Committee, and represents the 88th District, spanning Stafford, Spotsylvania and Fauquier Counties and the Town of Remington. As you may recall from my last blog post on proposed business tax reforms in the Commonwealth, he sponsored HB 57, which would freeze BPOL tax rates, and prohibit those localities that do not have a BPOL tax from imposing one.

The Art of WarA post yesterday from our friend Chris Hill at Construction Law Musings really resonated with me on a critical skill that many lawyers seem to lack.  The post, "What Owners Look for in Green Building and Why Contractors Should Care" advocated that contractors should know and understand what project owners were looking for in green buildings.  As Chris states well, "Knowing the other side's playbook is one way that a football team can prepare, the same holds true in pre-construction negotiation of contracts."

will and trustThe Supreme Court of Virginia issued an opinion last Friday in the case of Virginia Home for Boys and Girls v. Phillips  that reads like a law school examination question.  The court ruled that a man had no claim against an estate because he had no written contract and no independent verification.  

The basic principles are easy.  The statute of frauds in Virginia generally provides that all contracts for the sale of real estate must be in writing.  The so-called "Dead Man's Statute" provides that in cases where the opponent is incapable of testifying, no judgment shall be rendered if it is founded solely on uncorroborated testimony.  Both of these statutes make it incredibly difficult for a party to make a claim against an estate based on oral contracts, particularly claims involving real estate.

Rockingham County Circuit CourtI am writing with a very quick update on the status of the non-suit in Virginia, the subject of our very first blog post here.  While Virginia is typically viewed as a conservative and somewhat pro-defendant forum, it does have one very nice procedure that is very beneficial to plaintiffs, the right to take one voluntary dismissal with prejudice at virtually any time and start the case over again (called a statutory non-suit).  The plaintiff then gets the original statute of limitations, or an extra six months from entry of the non-suit order to re-file their case.

Internal Revenue Service Building DCAbuse of independent contractor status continues to get significant regulatory and legislative attention.  Critics of this practice argue that misclassifying employees as independent contractors is an unfair competitive advantage and robs federal and state governments of justly due employment related taxes.

On the federal level, there have been rumblings over the last year of not only stepped up scrutiny through both the Internal Revenue Service and Department of Labor, but also bills proposed in Congress during 2009 which would curtail the scope of current safe harbor provisions.  I received a note from Associated Builders & Contractors yesterday pointing to a recent new bill introduced by Sen. John Kerry which would rewrite existing safe harbor provisions and require all employers to obtain written documentation from the IRS as a precondition to independent contractor status.

USGBC Logo on GlassWading through the various layers of requirements, enticements, incentives and regulations that apply to green building can be overwhelming to anyone, let alone the uninitiated.  This process is made far more complicated by adding the layering of federal, state, and local government efforts in this field.

The United States Green Building Council has this effort very easy with regards to LEED related public policy searches.  USGBC has a search engine with multiple selectable criteria to sift through the oceans of regulations to find what you are looking for.  I cannot say the entire database is perfect, but I can say that it appeared that the Virginia state and local discussion was basically accurate, including the status of the green building ordinances in Arlington County, Fairfax County, and the City of Alexandria.

January 12, 2010
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Topics Green

LEED Green Building Bellevue Washington I am pleased to invite everyone to attend the upcoming Trends in Building Green Seminar on January 21, 2010. 

Date:       January 21, 2010

Time:       9:00 am - 12:00 pm (breakfast 8:30 am)

Location: National Rural Electric Cooperative Ass'n

                  4301 Wilson Blvd., Arlington VA 22203

A full listing of speakers and information is available, but the main topic is on green buildings and energy.  I will be speaking on some of the historical energy related issues with LEED structures, the attention they have received, and what this may translate to in the future both for LEED and liability exposure;  these topics have received a lot of interest and commentary generally, and we have also commented on them frequently here.

Anyone interested in attending should RSVP to Nancy Shipley of Rutherfoord by Tuesday, January, 19 at 703-813-6575, or nancy.shipley@rutherfoord.com.

Image by Wonderlane

Andrew McRoberts reported on Thursday that the Virginia Association of Counties released its Model Transfer of Development Rights Ordinance for Virginia Localities.  Andrew was part of a working group that worked with a number of stakeholders to develop this model ordinance so that it may be used as a guide for localities in Virginia unfamiliar with the concept, application and practice of using transferable development rights, or "TDRs."

BiofuelsEnergy production, sources, costs and impact are a constant fundamental part of the economy and the construction industry.  Nevertheless, there is a diverse flood of fuel related topics and commentary over the last week or two in Engineering News Record that is suprisingly interesting and dense.

On the biofuel front, ENR reprints and AP report that the biofuel market is particularly dead.  A federal tax credit has expired and, "The biodiesel industry is now operating at only 15 percent of its potential capacity, according to the National Biodiesel Board, largely because the price of traditional diesel has collapsed."  Meanwhile, ENR separately reports that the Canadian government has ordered a study into the environmental and health effects of producing ethanol and biodiesel fuels.  While this is not the first such critique of some ethanol or some biodiesel products, it cannot be heartening for biodiesel producers when juxtaposed against the current economy.

January 5, 2010
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Topics Taxes

Tax reform means “Don’t tax you, don’t tax me, tax that fellow behind the tree.” – Russell Long, U.S. Senator from Louisiana, 1948-1987.

Despite the budget crisis facing the Commonwealth and local jurisdictions all around Virginia, the General Assembly is considering new tax credits and limits in its upcoming session.

HB 2 proposes a tax credit equal to ten percent of the eligible investments made by small business tax payers in personal property and real estate improvements used in the business. Acquisition of or expenses related to motor vehicles used in the business and purchase or rental of real estate will not qualify as eligible investments. Qualifying investments must be at least $10,000 and must be made beginning July 1, 2010 but before July 1, 2011. For purposes of this proposed tax credit, a business qualifies as “small” if it has 500 or fewer employees. The patrons of HB 2 are Delegate Manoli Loupassi of the 68th District, which includes parts of Chesterfield County and the City of Richmond, and Delegate Christopher Peace of the 97th District, which includes parts of Hanover, Caroline, Henrico, Spotsylvania, King William and King and Queen Counties.

January 4, 2010
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Topics Green

Back to the Future RideAs we kick off 2010, it is a good time to make some predictions on the future of green building. While these predictions anticipate a longer time horizon than just the coming year, my bet is we will see some of these trends manifest during 2010. We can also expect that some of these topics will be the subject of a lot of discussion here and elsewhere over the coming year.