Contract, Construction, & Lien Law Blog - Paulose & Associates

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As of the end of July, there have been nearly 800 COVID-related lawsuits filed in New York. In New York, courts will not hesitate to enforce a release relieving a business from negligence claims. Releases are seen most often in voluntary activities, like sports and other entertainment. So long as the language of a release clearly absolves a business from its own acts of negligence, a plaintiff who is injured during one of these activities will not be able to sue a business for damages for negligence. In the seminal case of Gross v. Sweet, 49 N.Y.2d 102 (N.Y. 1979),…
We wish it were so easy. Last month, in a New York County Supreme Court case, the judge held that they don’t. Jerrick Assoc. v. Rudd Realty (NY County Supreme Court April 15, 2020). This is correct, but only if the contract says they don’t. Otherwise, they should end any dispute about whether money is owed to a contractor. The certifications, after all, often mean “based on on-site observation and data comprising the pay application that work has progressed to the point indicated and the quality of the work is in accordance with the contract and the contractor is entitled…
Last month, the State Supreme Court sitting in New York County issued a decision reminding contractors not to include items other than labor and material in mechanic’s liens. GPK 31-19 LLC v L&L Constr. Dev. Inc., 2020 N.Y. Misc. LEXIS 1620 (NY County April 23, 2020). In the decision, which dealt with a developer suing its general contractor for trust fund diversion, much was discussed, but central to this post was the discussion on exaggerated liens. Apparently, the general contractor had filed a lien stating, in addition to labor and material provided, a calculation of its lost profits. After motions…
· Hire a lawyer and file the bond in Court, but only if you used an out of state insurer. NY Lien law section 19(4) was amended in 2003 to allow the transfer of a mechanic’s lien to a bond without a court order. “Under the prior statute, the discharge of a mechanic’s lien by bond was a judicial function which required at least two court orders—the first setting the amount of the bond and the second approving the undertaking and formally discharging the lien. “Under the 2003 amendment, the court’s role was substantially eliminated in routine bonding applications. Under…
· Attack service of the lien. Pursuant to Lien Law §11, for a mechanic’s lien on property to be valid, it must be served properly. There are only three ways to serve such a lien: 1. by personally serving the property owner; or 2. by leaving it with a person of suitable age and discretion at the owner’s last known place of residence, so long as such residence is in the same city or town where the liened property is located ; or 3. by registered or certified mail to the owner’s last known place of residence. If the owner…
Is the Performance of Your Existing Contract Being Impacted by COVID-19? With the global pandemic of Covid-19 spreading rapidly, much business activity has come to a halt. As a result, there is uncertainty surrounding the performance of many existing contracts. If you are a party to an existing contract that has been effected by regulation implemented in response to Covid-19, you should know your options regarding your performance. First, review your contract. Does the contract include a Force Majeure clause? A Force Majeure clause may relieve a party from its contractual duties when its performance has been prevented by a…
New York’s SBA just issued a summary memo about at least one of the loan programs available from the CARES Act that was passed this past Friday. The loan program is called the “Paycheck Protection Program”. According to the memo, small businesses (generally those under 500 employees) can apply for — from lenders participating in the program — a loan “based on previous payroll and covered cost amounts”. Further: • Up to eight weeks of “eligible expenses” during the covered period can be forgiven from the loan principal as long as the employer maintains previous payroll counts during the emergency.…
As of today, Monday, within 3 days of a request, the SBA will deposit $10,000 into your bank account. The money is available through the SBA’s EIDL program. The SBA uses the word grant and not a loan. According to SBA’s guide, “The advance does not need to be repaid under any circumstance.” However, the payments must be used for: – Providing paid sick leave to employees; – Maintaining payroll; – Meeting increased costs to obtain materials; – Making rent or mortgage payments; or – Repaying obligations that cannot be met due to revenue losses. This grant is in addition…
As of Friday March 27, 2020, most construction is not essential and must stop. Pursuant to Governor Andrew Cuomo’s various executive orders issued this week, and as clarified by the NYS Department of Economic Development, most construction work is not essential and must stop. The only exception is for any “essential construction” and any “emergency construction”. “Essential construction” is defined by illustration to mean construction on “roads, bridges, transit facilities, utilities, hospitals or health care facilities, affordable housing, and homeless shelters.” “Emergency construction” is defined by illustration to mean construction that is (1) necessary to protect the health and safety…
Can I sue a contractor for not pulling permit? The DOB has stopped all work. Greetings. It appears the DOB has concluded that you needed permits and have issued a stop work order. You must now obtain the proper permits and lift the stop. That is the priority; you need to having a clean living space. Regarding who is to blame for not having the appropriate permits is a contractual issue. Who in the renovation contract was responsible? That is the person who is at fault. If the contract is silent, then the fault is with the homeowner. Please contact…