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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 March 2010.

If you are an owner or operator of affordable rental housing (property with four or more units), it might be worth noting that the General Assembly has just restricted your local real estate tax assessor's discretion to value your property to one method.   Senator Whipple, apparently at the request of the Virginia Housing Commission, patroned a bill passed by both houses this session to amend Section 58.1-3295, requiring localities to assess real property being operated as affordable rental housing solely via the income valuation approach.  Presumably, the reason for this was that local assessors have been trying to tax committed affordable rental housing (i.e. housing that is legally bound to remain and operate as affordable housing at limited rents), at rates that do not reflect these income stream restrictions, by using methods to determine fair market value other than the income approach.

shredded paper binsTypically, Virginia courts will simply review and apply the terms of contracts.  This is great if you have a good contract, horrible if the contract tilts towards your opponent.  In contrast to the general rule, Virginia courts are quite hostile to non-compete agreements and are more than willing to throw them completely out when the clauses go overly broad.

Another recent example was highlighted yesterday in The VLW Blog.  The case, Specialty Marketing v. Brunson, involved Specialty, a wholesale distributor of electronics.  Brunson was a sales representative.  When he became a director and purchased stock in the company, Brunson signed a non-compete.  Brunson left Specialty's employment and was hired six months later to act as an account representative for a competitor in his old territory. 

torn umbrellaAs reported yesterday by Virginia Lawyer's Weekly, a Virginia federal judge has ruled that a builder who remediated 70 homes constructed with Chinese drywall was not entitled to insurance recovery of the remediation costs.  This case is a painful reminder of how even positive, proactive business decisions can translate to tremendous liability risks, particular where interpretation of contracts and insurance occurs under Virginia law.

March 24, 2010
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Back in November 2009, I highlighted five cases in which the Virginia Supreme Court granted appeals in Case Watch:  Upcoming Virginia Supreme Court Opinions.  The Virginia Supreme Court has recently published the opinion in the first of those cases, W&W Partnership v. Prince William County Board of Zoning Appeals, et al, Record No. 090328.

yo-yos In 2008, the United States Green Building Council (USGBC) announced it was planning to shift its internally run certification of buildings to independent certifiers administered by a sister non-profit, the Greeen Building Certification Institute (GBCI).  A speaker at an USGBC - National Capital Region event declared last Wednesday that USGBC was taking steps to reverse this direction and bring the LEED certification process back in house to USGBC.

In what appears to be an effort to allow localities to provide additional incentives to redevelop certain areas or sites, both houses of the General Assembly have voted to modify Section 15.2-2316.2 of the Code of Virginia, better known as the "TDR Statute" (inclusive of Section 15.2-2316.1 as well).  Previously, transferable development rights ("TDRs") severed from a "sending" site or area could only be equal to the TDRs permitted to be attached to the "receiving" site.  The modification now allows TDRs transferred to receiving sites to be greater than those severed from the sending sites. 

Virginia General AssemblyThe Virginia General Assembly passed a statute, HB 797, that expressly permits architects and engineers to enter into contractual limitation of liability clauses.  The ACEC, VSPE, and VSAIA actively pushed to change the statute in the wake of several cases which ruled that previous language in the corporate enabling statute barred limitation of liability clauses for design professionals.  As can be sen from the bill tracking, the measure passed fairly easily in both the House and the Senate.

USGS Shake Map Chilean EarthquakeIn the last several months, both Haiti and Chile have been rocked by significant earthquakes.  The difference between the tremendous devastation and loss of life in Haiti and the far lower impact in Chile, despite a much more serious earthquake, is at least in part the direct result of building codes and construction practices.

The earthquake in Haiti registered magnitude 7.0 and resulted in an estimated 200,000 people killed.  The Chilean earthquake registered magnitude 8.8, translating to 500 to 900 times more energy released than the earthquake in Haiti.  The death toll estimates in Chile are still preliminary and changing both up and down, but the current estimate appears to be 528 although it has fluctuated up and down from as high as 800.

Why the dramatic discrepancy?  Read more below the break ...

 

lead paintThe next wave of the EPA's lead paint regulations take effect on April 22.  These regulations will impose new training, certification, work practice and record keeping requirements on contractors performing renovations on structures built prior to 1978.

Reports that we are hearing indicate that the EPA's roll-out of the program has been less than clear.  Some people have struggled to find sufficient openings or available training classes.  Our friend Sean Lintow (@slsconstruction on twitter) reports that in some states, the state governments are taking over the certification process with EPA's blessing, throwing the validity of currently issued certifications into question.

A number of people have asked me specific, important questions which I would like to give my take on, which can be viewed below the break: 

March 10, 2010
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Topics Taxes

It looks like “Punt” is the name of the game with Virginia tax reform. In a January 5, 2010 blog post and a January 20, 2010 blog post, I discussed four tax reform proposals – all of which the General Assembly has managed to put off until a later date.

Apparently, HB 57 got the most traction. This was the bill proposing to prohibit any locality that had not already imposed a BPOL tax from doing so and prohibiting any increase in BPOL tax rates. The House passed that bill with a resounding 88 to 8 vote, but the Senate referred the bill to the Committee on Finance and continued a vote on the bill until 2011.

Modular home beforeModular home construction presents significant potential improvements to home construction: significantly reduced construction time; less material waste; and reduced expense.  If not handled appropriately in terms of contracts and risk, modular homes can translate to a gigantic headache for both the designers, contractors, and the owner.

Last Thursday, Lisa Rein of the Washington Post wrote an article on mansions turning to modular construction to reduce time and costs.  The article caught my eye - while I have noticed this trend over the last 5 years or so, it was the first time I saw local mainstream press pick up on this.  My friend Jamie Baker Roskie at the always interesting Land Use Prof Blog picked up on the article and connected the thread towards local codes discouraging use of shipping containers as building materials.

Can you imagine going to your local zoning office, asking for a formal determination from the Zoning Administrator as to whether you are permitted to build a building on your property, receiving a formal written determination that you may do so legally, providing the written opinion to your bank who then provides the financing, then paying for and constructing the building, only to be notified thereafter by the locality that they have either changed their mind or have decided to rezone your property without your consent in the interim?  You complain that you were told by the locality that you could build the building, but all you get is "Sorry, we've decided you can't do that after all."

March 4, 2010
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Topics Green
Tags Green

I am very pleased to report that I will be speaking on April 27, 2010 at the Green Legal Matters Conference in New Orleans, Louisiana.  The event includes a large number of talented folks, including good friends of ours from twitter and blogs such as Christopher Hill, Shari Shapiro, and Scott Wolfe.  A number of general counsel of very significant entities are scheduled to participate as well, including:

  • Susan Dorn, General Counsel USGBC
  • Roberta Lang, General Counsel, Whole Foods
  • Steve Harmon, Sr. Dir. Legal Services, Cisco
  • Elaine Reilly, Corporate Counsel, DuPont
  • Ted Banks, Former Chief Counsel, Kraft Foods
  • Kurt Stepaniak, Sr. VP, Law and Acquisitions, Kone, Inc.
  • Allyson Willoughby, General Counsel, Method Home

This looks to be a fantastic event.  Last, but not least, the event takes place in the middle of New Orleans' Jazz Fest, a particular favorite of mine.  More information regarding the event is available from the press release issued by the conference organizers.  You can register for the event and see more information on schedule and attendees at the conference website.

I don't know how many people out there tracked the events at the sustainability forum out in Portland a few weeks ago, but one of the notable take-aways from the event was that HUD Secretary Donovan used the event as an opportunity to announce that HUD was launching it's new Office of Sustainable Housing and Communities (OSHC) under Deputy Secretary Ron Sims.  OSHC is funded in HUD's 2010 budget.  This follows on the heels of the announcement to create the Inter-agency Partnership for Sustainable Communities between DOT, HUD and EPA last June.

Dripping FaucetThe Commonwealth of Virginia has been slow to apply for, award and perform contracts funded by the federal American Recovery and Reinvestment Act (ARRA, better known as the Stimulus bill).  As the construction industry has suffered through plummeting bidding numbers and 25% national unemployment, Virginia has lagged in even qualifying its projects for funding, let alone getting the money to work.  The bad news is this has slowed down much needed funding.  The good news is it looks like there is a lot more money coming down the pike into the economy in Virginia.

A recent report by Peter Bacque of the Richmond Times Dispatch indicated that federal legislation provided $694.5 million in federal transportation stimulus funding and that less than half that has even been awarded in contracts.  Mr. Bacque indicates the money spent to date has produced 454.4 full time jobs.  This contrasts with the reported job creation in Virginia for US Department of Transportation which sets jobs created or saved at 1,335.54.  Thus, the confusion over job creation and funding that we have previously discussed continues.  Based on the funding numbers, the USDOT funding is clearly not the only agency source of transportation funding for Virginia as there is a minimum of another $100 million in funding.