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 April 2010.

Bug eyedThe EPA's new lead regulations officially went into effect on April 22.  As expected, EPA has promptly issued notice that it intends to change the regulations to remove the "opt out" provision.  The opt-out created an exemption from the regulations where a home owner certified that no child under 6 or pregnant woman occupied the home and that the home was not a child-occupied facility.  The new change will take effect 60 days after publication in the Federal Register.

The removal of the opt out provision was expected and followed a litigation challenge from various advocacy groups.  That litigation resulted in a consent settlement with EPA whereby EPA committed to propose several changes including removal of the opt-out provision.

Back on April 14th I blogged about the creation and anticipated operation of the Virginia Defective Drywall Correction and Restoration Assistance Fund (the "DDCRAF") via two new provisions to the Code of Virginia patroned by Delegate Oder this session.  If you read that posting you'll recall that the purpose of the DDCRAF is to create a perpetual, non-reverting fund to facilitate the remediation of property impacted by the use of "Defective Drywall" in residential construction, and I promised to find out whether funding was lined up for the DDCRAF yet.  Delegate Oder's office has been very responsive and helpful in explaining how they envision funding to come through for the DDCRAF.

holding handsPublic service is a core value in my life. Part of the fun of social media is that it gives the chance to show the wizard behind the curtain a bit and exhibit the personality and values that drive you. This is a little oblique to construction law, but ultimately these topics intertwine for me in professionalism and community building.

April 23, 2010
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 In the first part of this posting, we reviewed the deed in lieu process, and how it can be a viable alternative for both the lender and the borrower in situations of serious default where modifications or workouts are impossible. In this second part, we will discuss briefly some important tax and bankruptcy considerations.


John KellyWe are very pleased to have a post today from one of our colleagues here at Bean, Kinney & Korman that focuses his practice on real estate related matters, John Kelly.  We are looking forward to John's contributions here on the blog moving forward and believe John may become a regular mainstay here shortly!

Given the present economic climate, it is no surprise that many real estate developers are having difficulty paying back their lenders. The lender may agree to waive the existing defaults and restructure the loan by modifying the terms of the loan or adding additional collateral or the lender may instead proceed immediately to foreclosure. After conducting its distressed loan due diligence, however, the lender may determine that neither extreme is the right choice. Restructuring the loan may be impractical given that economic circumstances make foreclosure inevitable, but the lender may want to avoid the expense and time needed to foreclose. This post will discuss in detail the compromise position where the borrower averts foreclosure by agreeing to convey the property back to the lender via a deed-in-lieu-of-foreclosure, typically in exchange for the cancellation of the indebtedness. This will be a two part series, with the first part discussing the key aspects of a deed-in-lieu transaction, and the second part of this post will review in brief the related tax and bankruptcy issues.

Views at Clarendon Rendering

At the risk of engaging in a bit of direct self-promotion for perhaps the first time, today we have a guest post from Raighne Delaney, a shareholder of Bean, Kinney & Korman, P.C. and lead counsel in the successful dismissal of a case on April 12, 2010 pending against the Views at Clarendon Corporation, Inc. involving an affordable housing project here in Arlington. Raighne’s comments regarding the case follow:

On April 12, 2010, Judge Hilton of the U.S. District Court for the Eastern District of Virginia dismissed a suit seeking to halt the Views at Clarendon affordable housing project in Arlington, Virginia. The plaintiff, Peter Glassman, claimed the project violated the U.S. and Virginia Constitutions’ establishment clause by allegedly using Arlington County government funds to erect and repair a church and support the church’s ministry. The court roundly disagreed with these allegations, finding that the plaintiff’s complaint failed to properly allege an Establishment Clause case. The court granted the various defendants motions to dismiss as to all counts of the case with prejudice and no leave to amend was granted.

We've got two new provisions to the Code of Virginia as of this last legislative session which create a perpetual, non-reverting fund to facilitate the remediation of property impacted by the use of "Defective Drywall" in residential construction.  This fund will be administered by the Virginia Resources Authority and the Department of Housing and Community Development ("DHCD"). 

Hale Boggs Federal BuildingI spent this weekend thinking about the significant victory for Virginia home owners in the Chinese drywall litigation that was tried as part of the pending class action in New Orleans.  It may have mattered quite a bit that this ruling was issued in New Orleans as opposed to Virginia. 

I run the risk of delving into legal complexity, but it is necessary here to understand these issues.  We have talked about the economic loss rule several times here, in particular as it relates to products liability cases, and implications of classifying damages in such cases.  Those interested in design and construction issues in Virginia absolutely need to understand the economic loss rule.  The contours of this rule define who can whom and for what.  This rule is heavily briefed, argued, and litigated and can mean the difference between a big payday and a big goose egg.

Pile of moneyAs reported today by Virginia Lawyer's Weekly, seven Virginia families were awarded $2.6 million in damages by New Orleans federal Judge Eldon Fallon.  The whopping verdict allowed recovery of extensive damages, but denied recovery due to loss of value stigma damages to the homes in question.  In addition the opinion contains a number of interesting points and wrinkles that are worth highlighting.

April 8, 2010
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Topics Litigation

witness boxI had the pleasure and privilege of testifying as an expert witness in a case last week.  I have been retained as an expert a number of times and have now been qualified as such in two court proceedings and an arbitration hearing.  It is fascinating how the view of the courtroom changes depending on what seat you occupy.

Please contact commercial leasing attorney John Kelly jkelly@beankinney.com should you have any questions concerning this article or require assistance.

Earlier this year, Judge Bellows of the Circuit Court for Fairfax County found that repairing and replacing exterior building components including terrace soffits did not constitute an “improvement” for purposes of Virginia’s statute of repose. Now another court has limited what can constitute an “improvement” under Virginia’s mechanics’ lien statute.

Our blog has been inundated with hits on our two blog posts regarding the EPA's new lead paint regulations, Renovators Beware: Lead Paint Regulations Change in April and Lead Paint Regulations April 22: Are You Ready?.  We have fielded a number of questions from folks looking for information on classes and certification with the EPA.

I thought it would be helpful to provide a link where you can sign up for such training with The Training Network.  Just click on schedule of classes for information on specific dates and locations.  I would encourage folks to consider signing up for the classes held in Chantilly by the Northern Virginia Building Industry Association.  We are very active with that organization and they are doing excellent training and advocacy work for the home building industry.

April 6, 2010
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I just received an interesting and exciting e-mail I wanted to share with our readers.  Our friend Matt Handal has been involved with creating an iPhone application for the architecture, engineering and construction industries to share information and links.  He just passed along this note to me:

Dear Tim

As a courtesy, I wanted to let you know that your blog posts are now available to iPhone and iPad users through the AEC Info iPhone App. This is a free iPhone/iPad app available in the iTunes store. Your content is located under the Law category.

Users can read your posts, send them through email, share them on Twitter, and open your website up in the Iphone/iPad web browser (Safari). The app has been very well received and this should open up a whole new set of readers to you and your website. Go to http://www.aeciphoneapp.com to learn more.

The app offers the latest industry headlines and insight from across the web. All from one convenient mobile application. We selected your blog posts as important to the industry and therefore included them in the app.

Thanks for including us Matt, and best of luck with your new application!

handshakeOur friend Matt Morse at Dovetail Construction had a great post on Friday entitled "Sometimes Things Go Wrong".  Matt makes some excellent points that even the best builders will face some problems -- the way a builder responds to those problems presents an opportunity to stand up, take responsibility, and potentially turn a "customer" into an "evangelist".

April 2, 2010
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Topics Green

Darwin Very Gradual Change We Can Believe InThe official word is now circulating that GBCI and USGBC are dramatically altering the inspection and certification process for LEED certifications.  Last week, I posted the very surprising information that major changes were potentially in the works for GBCI certifications based on a comment at a seminar I attended.  GBCI's initial comments on the blog post appeared to reflect that the initial information was slightly off, but the thrust of problems and resulting changes to the third party inspection protocol appeared accurate.