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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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On June 17th, the Arlington County Board approved an amendment to Arlington’s Zoning Ordinance allowing greater aggregate sign area for certain properties with retail.

The adopted amendment—which applies to buildings with comprehensive sign plans in commercial/mixed-use zoning districts—would increase the allowed aggregate sign area for retailers facing publicly accessible plazas. It would also increase the maximum size of blade signs.

A new ruling by the National Labor Relations Board could impact the relationship between developers, construction companies and their workers.

In a landmark decision on Thursday, the National Labor Relations Board (“NLRB” or “Board”), by a 3-2 vote, determined that its long-standing “joint-employment jurisprudence” had grown “increasingly out of step with changing economic circumstances, particularly the recent dramatic growth in contingent employment relationships, i.e., shift work, contract workers, and temporary employee relationships[,]” across the U.S.

The construction industry is all too familiar with its perception as a means by which individual and corporate citizens alike may experience economic opportunity. Whether at the federal, state or municipal level, set-aside programs exist to give small, local and other discrete businesses the ability to compete for lucrative construction contracts. Efforts to support local business and increase the employment of residents are important to strengthen local economies. However, it is worthwhile to reevaluate government participation in the contractor selection process to ensure the goals of set-aside programs do not produce unintended results.

In the Washington, D.C. metropolitan area there are a variety of programs that allow for small businesses, local businesses, minority-owned, female-owned, disadvantaged and veteran-owned businesses to participate in construction projects in which states and municipalities are market participants. Among the federal government, D.C. government, and governing bodies in the counties of Prince George’s, Montgomery, Arlington, Alexandria, Fairfax, Prince William and Loudoun, there is a deliberate push to create jobs for residents and local businesses. The benefits are obvious. An increased tax base and productivity builds better communities. But can more be done for the corporate participants?

Ask anyone who has several years of experience in construction if they ever engaged in a handshake deal and the answer will be a resounding “yes.” For those unfamiliar with the term, a handshake deal is essentially a verbal commitment that is sealed with a handshake between the contracting parties. Handshake deals were not just limited to transactions between a contractor and an individual. It was, and sometimes still is, common for businesses to engage in sophisticated deals with a simple handshake between business owners. The moment the parties shook hands, reputations were at stake and promises were meant to be kept. While the handshake did not obviate the need for documentation, the value of the handshake was understood to be the cornerstone of what the parties intended to occur for a construction project.

December 16, 2013
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Topics Contracts

Most contract negotiations boil down to several key terms.  For construction contractors, these are five critical items that you need to carefully consider and negotiate in each of your agreements.

I.  What is the Scope?

The starting place of a construction contract is the work to be performed.  Remarkably, this is often poorly or inconsistently defined.  Contractors should strive for a clear definition of what are the “contract documents” and what portion of the work is the responsibility of that contractor.

Stretch ArmstrongThose wishing to stretch indemnity clauses to the limit may want to read the recent Supreme Court of Virginia case, Uniwest Construction v. Amtech Elevator Services.  This case, in addition to a recent indemnification case from the 4th Circuit, demonstrate that there are some real risks to demanding excessive indemnity obligations in a contract.  You may actually wind up with nothing if you go too far.

Last month, we looked at Station #2, where the Virginia Supreme Court refused to turn a breach of contract allegations into a fraud claim. Contrast that with Nathan, et al. v. Long & Foster, Real Estate, Inc., et al., in which the Circuit Court for the City of Roanoke has allowed a fraud in the inducement claim to go forward.

Geeta Nathan and Santam Singh were looking to buy a home in Roanoke, and worked with Barbara Michelsen, a Long & Foster real estate agent. They signed a Purchase Agreement to buy a home for $260,000, and the agreement listed Michelsen as the selling agent.

The Virginia Supreme Court recently gave us yet another example of a breach of contract case that couldn’t rise to a fraud in the inducement claim in Station #2, LLC v. Lynch, et al., Record No. 091410.

In Station #2, the Lynches owned a three-story building in the City of Roanoke. They sold the top two floors to 237 Granby LLC in order to convert the floors to condos. The Lynches then leased the ground floor to Station #2 so it could operate a restaurant with live music and other entertainment. The lease between the Lynches and Station #2 required Station #2 to install soundproofing material in the void space between Station #2’s ceiling and the lower level of 237 Granby’s condos. 237 Granby’s agent agreed to allow Station #2 access to the void space, but the company hired by the agent to renovate and develop the condos closed off the void space before Station #2 could soundproof.

In the recent case of TC MidAtlantic Development, Inc. v. Commonwealth of Virginia, Record No. 091271, the Virginia Supreme Court was faced with the issue of properly pleading compliance with conditions precedent in a public contract. Despite the tongue-twisting nature of this issue, the crux of the case came down to simple timing.

Here is a new sampling of cases in which the Virginia Supreme Court has recently granted appeals.

In April, the Court granted the petition for appeal in Studio Center Corporation v. WKW Construction, LLC, Record No. 092257, challenging the ruling of Judge Shockley from the Circuit Court of the City of Virginia Beach. Studio Center is contesting Judge Shockley’s holding that Virginia Code Section 54.1-1115(C) applied when the unlicensed contractor admitted it knew Virginia law required a license, but did not realize that it could not use someone else’s license. This case should give us some much needed guidance on Section 54.1-1115(C)’s requirement of “good faith” and “actual knowledge.”