Home Contractor vs. Homeowner

Arbitration v. Litigation-Which is More Effective?

2023-05-30T16:07:00.002-04:00

Last week I arbitrated a case over Zoom. The hearing lasted one hour. The Claimant, a construction company, was owed high five figures. They did not have an attorney’s fee clause in their contract.

The Respondent never answered the arbitration demand and did not appear.

The Claimant presented his damages and told me the history of the project. I awarded him the full value of his claim plus interest and costs because they were provided for in his contract.

What if this had gone to litigation?

He would have filed a lawsuit and paid for service on the defendant.

He would have had to wait twenty days for him to file an answer.

He would have to file a request for default.

He would have to file a motion for default judgment.

Even if the claim were for a “sum certain,” the court would probably require a hearing on damages.

He will have to appear at the hearing and testify as to his damages. If the court is busy that day, he may have to wait around for hours.

He will have to wait for a judgment.

He will have to ask for an execution.

To be fair, the Claimant will have to ask the court to confirm the arbitration award in order to obtain a judgment, but that is usually decided on the papers.

If you were owed money, what would you choose?

Parties should include arbitration clauses in their construction contracts because it allows them to have more control over the dispute resolution process. When disputes arise, they should carefully consider the qualifications of potential arbitrators making their choice. Choosing an arbitrator with specialized knowledge in the construction industry can help ensure that the dispute resolution process is efficient, effective, and fair.

Contact me to arbitrate or mediate your residential construction dispute. Andrea Goldman agoldman@goldmanlg.com or 617-953-3760.

TEN NEW YEAR’S RESOLUTIONS FOR CONTRACTORS-2021

2021-01-12T18:56:00.004-05:00

As I sit down to write my annual list of resolutions for contractors, I am amazed at how much things changed in 2020. Construction was going well and then, in March 2020, COVID-19 hit. At first, we thought it was going to be a disaster for the construction industry. States, cities and towns shut down projects and many applied for PPP loans. Then, something amazing happened. Construction was considered an essential service and everyone was back to work.

That said, the work world changed: companies were donating their PPE to frontline workers, COVID-19 protocols had to be followed and paperwork had to be filed. Everyone was scrambling to figure out how to comply and keep their businesses going. So, you may or may not ask, what was I, as a construction lawyer doing? I spent March and April thinking about the new risks contractors/construction companies were facing and developing contract clauses to protect the industry. I wrote a number of blog posts with clauses to add to your contracts and refined them as new developments occurred. See, Massachusetts Builders Blog. Here are the takeaways and goals for 2021:

1. Prepare for Unforeseen Events.

We are working in unpredictable times. Your contract should allow you to delay or cancel jobs depending on unforeseen occurrences. Workers might be exposed or become ill with coronavirus. The same can happen with owners. All sides should have the right to cancel or delay jobs at any time. Although many contracts have had “force majeure” or “acts of God” clauses, these may not be comprehensive enough to protect you if you have to press pause on a project. Review the language in your contracts and add more if necessary.

2. Allow for Increased Job Costs.

The supply chain has been disrupted. As a result, costs of materials may increase. Insert a clause in your contract that allows for a change order if costs increase by more than x%.

3. Require Compliance from Subcontractors.

As with OSHA regulations, your subcontracts have to comply with COVID-19 protocols. I am assuming that regulatory agencies will hold you responsible if your subcontractors are in violation. You also need to protect your workers when subcontractors are on site.

4. Review Your Insurance Policies

It is currently unclear whether business interruption insurance will cover coronavirus-related issues, but it would be worth looking into a business interruption policy. Worker’s compensation claims may also go up, and coverage may not be in place for COVID-19. It’s time to have a conversation with your insurance agent.

5. Work on Your Payment Schedules

It is really important to make sure that the money is even with, or stays ahead of the work. The economy is volatile right now and people are losing their jobs. This is not the time to have a customer suddenly unable to pay and cancel a project. You can include a clause in your contract that says that if you are insecure, you can require your client to escrow the payments for your project. It is time to include that clause in your contract.

6. Waive the Right to Sue and be Sued for Contracting COVID-19

Let’s face it. People are going to try suing each other for transmitting the virus. I don’t think these lawsuits will prevail, because it is virtually impossible to prove how and from whom you got sick. That said, I would just have everyone waive the right to sue each other in their contracts for transmission of coronavirus. It’s one less thing to worry about.

7. Run from Red Flag Customers

We’ve all experienced those red flags when meeting with potential clients. Now, more than ever, everyone is on edge. This virus has brought out the worst in some people. If something seems off, run! Better clients will come along. Good communication is key and it’s hard to communicate with customers when the relationship is strained.

8. Include Arbitration and/or Mediation Clauses in Your Contracts

Litigation is pretty much at a standstill in MA. Even when trials begin again, criminal cases will have priority. Litigation is a distraction from your business and can be extremely costly. Lawsuits should always be avoided, but now, more than ever, it’s time to seek out alternative forms of dispute resolution. Arbitration is a private process where an arbitrator acts as the judge and rules on your dispute. It is usually a binding process and the arbitration decision or award is enforceable by the courts. Mediation is a voluntary process in which parties work with a third-party neutral to try to resolve their dispute. It can be very effective in resolving conflicts.

9. Avoid Disputes at All Costs

It is always better to try to resolve disputes with owners rather than ending up in litigation. Although I have said this before, now, with the virus, lawsuits are more difficult than ever. Stress levels are heightened. There are always going to be problems that arise in construction. The important thing is how you deal with them. So, try to resolve disputes immediately. Email allows people to say things they would not say directly, so schedule an in-person meeting (socially distanced with masks) to address any issues.

10. Check Out the New PPP Loans

A new round of loans is coming. So far, I know that if you have a quarter where you earned 25% less than last year, you are eligible. Look into it!

My bonus resolution:

11. Take a Vacation!

I can’t remember my last vacation. Can you? With WFH (work from home) being the norm, it can be difficult to separate work and leisure, let alone take a break altogether. For many, vacation means going somewhere else and the planning that goes along with it. So, it has been very easy to forget that we all need a break from work; even if we can’t go anywhere. Once we have the vaccine, I assume we can all start planning trips (my firsts will be to see my kids in LA, Charleston and NYC!), but before then, take some time off! You will be rested, refreshed and more productive as a result.

We are all hoping that 2021 will be better than 2020. That said, we all need to continue to adjust to the new normal and adapt our businesses as the work environment changes. I wish you all a happy and healthy new year!

*Andrea Goldman has launched Beyond Dispute Arbitration and Mediation Services. Contact Andrea if you are looking for an arbitrator or mediator for your construction dispute. To see my Alternative Dispute Resolution resume, click here. Send me your contracts and I will review them for free! I will then quote you a price for updating or drafting your contracts. agoldman@goldmanlg.com 617-953-3760.

When You Shouldn't Mediate Your Construction Dispute

2020-11-14T18:12:00.001-05:00

Photo by Cytonn Photography on Unsplash

Mediation is a wonderful form of dispute resolution. It allows the parties to craft their own resolution to a conflict. It frequently repairs relationships. Parties tend to comply more with mediated settlements. That said, there are definitely times when you should not mediate.

As a refresher, mediation is an alternative form of dispute resolution where the parties attempt to negotiate a settlement of their dispute with the aid of a third-party, neutral mediator. It is a confidential process. If the parties come to an agreement, that agreement becomes an enforceable contract. Since parties have control over whether they come to an agreement, they are much more likely to comply with a mediated settlement than a judgment.

So, when not to mediate?

When the other side refuses.

Mediation is supposed to be a voluntary process. The parties are supposed to attend a mediation session in good faith. There is no point in wasting everyone’s time by attending a mediation session and refusing any sort of compromise or not being willing to listen. If the other side won’t play, don’t bother.

If the law and the facts are on your side.

As a lawyer I can tell you that I have rarely been involved in a dispute where the situation was absolutely black and white, but it can happen. If you are absolutely going to win, why mediate?

If there is a power imbalance.

Parties really can’t mediate if one side has most of the power. If you don’t have any leverage in a situation, there may be no point in mediating. It may be cheaper to just try to settle or have your lawyer negotiate for you.

If the relationship has been abusive.

This is really a variation of a power imbalance, but worse. If there has been abuse by one party against another, then it would not only be inadvisable to mediate, it could be dangerous. The abused individual may make decisions that are against his or her best interest. If the person is not represented by counsel, it would be dangerous to even be in the same room as the abuser.

When it isn’t cost effective.

Most disputes come down to money. I cynically tell my litigation clients that it is their job to persuade the mediator to advocate for their position. As a preliminary matter, mediators need to determine who is writing a check to whom; then, it’s a matter of how much. If you believe money should be coming your way, but you don’t think a mediator would see it that way, then don’t bother. Mediation typically saves money because the parties come to an agreement and litigation ends. That said, spending eight hours mediating and not coming to an agreement just costs the parties money. During the mediation you may find out some valuable information, but at the end of the day, it has to be worth it.

The timing isn’t right.

Sometimes parties rush into mediation before they have exchanged any information or have evaluated the strengths and weaknesses of their position. At times, the parties’ contract requires mediation, but no one is really ready. In that scenario, it is better to waive mediation and pursue it at a later date when the process has more of a chance of being successful.

Although I firmly believe that mediation is a wonderful thing, that doesn’t mean it is suitable for every dispute. For a mediation to be successful, it has to be done when the time is right, when the parties are read to participate in good faith and when everyone is motivated to do the work to discuss the issues and possible solutions. If you are ready to mediate your dispute, give me a call at 617-953-3760, or email me at agoldman@goldmanlg.com.

What if the Debate Were Moderated by a Trained Arbitrator/Mediator?

2020-09-30T12:29:00.001-04:00

I am guessing like the rest of you, I am still reeling from last night’s presidential debate. I was so tense during the whole thing that I felt as if I had been through a horrifying experience.

How could that have happened? Trump came in like a bulldozer and just kept stepping on the gas. Sadly, Biden did not seem to know how to deal with this attack. As Dana Bash on CNN stated, “It was a shit show!”

I couldn’t help imagining how I, with my arbitration/mediation skills, could have moderated the debate, which may have resulted in a very different outcome.

State the Rules and Control the Process.

In every mediation and arbitration, I remind the parties that it is my job to control the process. They provide the evidence and information, but when it comes to procedure, I am the boss.

So, knowing Trump’s track record, I would have sternly reminded the parties of their prior agreement to the debate format.

“You will each have two uninterrupted minutes to respond to the questions.” That was said but the participants were not forewarned about the consequences of violating the rules.

So, here is my imaginary introduction to presidential debate:

As part of the ground rules, you need to know what will happen if you do not abide by the debate agreement. First, I will remind you to not to interrupt. We have agreed in advance that there will be no personal attacks, and each of you will respond to the question as presented.

If you deviate from responding to the question, I will remind you of what the question is. If you still persist in raising irrelevant issues, I will award your remaining time to the other party and turn off your microphone.

Once Chris Wallace realized what was happening, Andrea, the fantasy moderator would have said, “Time Out!” You agreed to a set of rules. You are not abiding by those rules. We have ten topics to get through tonight. Your behavior is not helping the American people choose a president. I am going to now proceed with each question. I want to hear your response to that question.

Trump still persists in his bullying and name calling.

Name That Behavior.

President Trump. You are acting like a bully. You are being rude and insulting Vice-President Biden. That behavior is not acceptable and I will not allow it. If you cannot control your behavior, I am turning off your microphone. If that doesn’t work, then I will end the debate early and you can answer these questions in a written format.

Remind the Parties of Their Goals.

If I am forced to turn off your microphone or end the debate early, that will not serve either one of you. The goal here is for the American voters to learn your positions on the issue of importance in our society. Your actions are depriving your audience of the opportunity to do that.

Get the Parties to Buy into the Process.

You both agreed to the format of this debate. You both agreed to debate in the first place because that is part of the election process. You both agreed that you are here for the voters.

Now can we proceed?

I am happy to serve as a neutral and help you resolve your disputes without resorting to litigation. Given the availability of Zoom and other virtual portals, I can arbitrate anywhere in the country. You can contact me at agoldman@goldmanlg.com or 617-953-3760. Please contact Goldman Law Group today!

Why You Should Mediate and/or Arbitrate Your Construction Case

2020-09-02T17:11:00.004-04:00

As a result of the pandemic, the courts have a terrible backlog of cases, and parties who are trying to resolve disputes will wait months, if not years to see a resolution of their cases. The courts in Massachusetts have been doing a fantastic job of handling the issues raised by Covid-19, but there has been an unpreventable delay in processing cases.

Mediation and arbitration have always been effective ways of resolving conflicts. Now, more than ever, parties should consider avoiding lawsuits and hiring an independent mediator or arbitrator to bring finality to their disputes.

What is the difference between mediation and arbitration?

Mediation is a voluntary process whereby the parties try to negotiate their dispute with the aid of a third-party neutral. The mediator has received training in trying to facilitate a resolution. The advantages of mediation are numerous. It is a voluntary process and the proceedings are confidential. If the parties arrive at a resolution of their dispute, it is memorialized in a settlement agreement that has the force of a contract. A good mediator will draft the agreement with consequences if the parties do not comply with its provisions. Since the parties craft the agreement themselves, they are more likely to comply with its terms.

In arbitration, the parties submit their dispute to a third-party neutral who serves as a private judge or arbitrator who rules on the case. The arbitrator holds a hearing that is similar to a court proceeding, but the rules of evidence do not apply, and the proceeding is private. The arbitrator’s award is usually binding and generally non-appealable.

In Massachusetts, an arbitration decision will generally not be overturned on appeal, even if the arbitrator does not properly follow the law. For that reason, it is extremely important to be careful when choosing an arbitrator. I don’t believe it is possible to “game” an arbitration, but it is helpful to choose someone who understands the issues and has experience in both sides of a dispute. It is not an accident that there are professionals who become known as construction arbitrators or mediators. They have generally been working in the field for years, usually as attorneys, and understand all of the aspects of a dispute.

Most of my cases are currently being taken out of the court system and proceeding to alternative dispute resolution. Although parties have opted to turn to private dispute resolution in the past, it has gained in popularity since the coronavirus pandemic. Online portals such as Zoom make it easy to conduct a proceeding without the stress of in-person exposure. Zoom has tools that make meetings in private breakout rooms an easily accessible option. Zoom allows for meetings that do not require masks and Plexiglas. It is easier to assess someone’s demeanor over Zoom rather than while social distancing.

I have been a construction lawyer for over thirty years and have represented all sides of construction disputes; builders, contractors, developers, owners, homeowners, subcontractors and suppliers. I trained as a mediator in 1996 and have had many hours of training since. I started arbitrating in 2003 and am currently on numerous arbitration panels including AAA Construction and Commercial as well as the FINRA panel.

Why You Need a Lawyer to Review Your Home Improvement Contract

2015-08-06T11:04:00.000-04:00

The economy is good. Home improvement contractors are busy, and homeowners are finally undertaking those renovation projects that they postponed when times were bad. You’ve done your research and found a great contractor. Everyone is excited to start the job. Perhaps you glance at the contract, and it seems fine. Why hire a lawyer to review your contract?

It always astounds me when homeowners undertake six-figure projects without having a lawyer review the contract. My rule of thumb is simple. Always have an attorney look over your agreement unless it’s for an amount of money that you are willing to lose.

Honestly, most contractors (and I represent many, many of them) get their contracts from the internet. They include standard clauses that are required by state law. They may have had an attorney review the contract, but that attorney is working for them, and is not representing your best interest.

A contract is a “meeting of the minds.” It is a way to establish expectations while the relationship is good. Hopefully, the parties negotiate the contract and then it collects dust on a shelf.

Here are some of the clauses that I put into contracts that are important, and in many cases, required by Massachusetts law.

1. Scope of work-What exactly is the scope of work? Which materials will be used, including brands and models? What is not included in the scope of the work?

2. Begin and end dates-When is the work going to start? Are permits required? Does the homeowner have a strict deadline for completion of the job? Is the work weather-sensitive? Should there be a penalty for delay?

3. Payment schedule-Is it a fixed price or time and materials contract? Does payment occur at the beginning or end of milestones? Is it contingent upon a bank loan? Is payment required even if there is an issue with the quality of the work? Can the contractor stop work for nonpayment? Jobs are more likely to stay on track if the payments do not get ahead of the work and vice-versa.

4. Termination-Can either party terminate the contract? What issues form the basis for termination? How is a termination supposed to take place?

5. Insurance-What types of insurance are required? Has the contractor provided the homeowner with evidence of insurance?

6. Authority to make decisions-Who has authority to make decisions on behalf of the homeowners? The Contractor?

7. Warranties-What types of warranties will be provided?

8. Dispute resolution-Will the parties attempt to mediate disputes before going to arbitration or filing a lawsuit?

9. Permits-Which permits are required? In Massachusetts, the contractor must obtain the permits, or the homeowner will be denied access to the State Guaranty Fund, which is a victim’s assistance fund run by the state to compensate homeowners who have suffered damages as a result of defective work by contractors.

10. Finally, Rule #1!-All change orders must be in writing, reflect any change in the contract price and the date of substantial completion.

These are just some examples of the issues that should be considered when drafting a home improvement contract. By making the effort to have a clear understanding of how the project is going to work, both contractors and homeowners can prevent disputes. The contract can also provide a guide for how to handle disputes if they occur.

When one considers the amount of money and effort that goes into a home renovation, the incremental cost of having an attorney review the contract is well worth it. In addition, that lawyer can serve as a resource if problems occur during the project.

What to Do When Subcontractors and Suppliers Ask the Owner for Payment

2013-09-15T16:02:00.002-04:00

When owners discover that their contractor has not paid subcontractors and suppliers, anxiety immediately sets in. Contractors who are not adept at running their businesses end up with cash flow problems and operate on credit. The situation then catches up with them and they stop making payments. Suddenly the owner finds himself being contacted by subcontractors and suppliers who are demanding payment.

The law in Massachusetts is clear; a subcontractor or supplier can only collect against an owner if it records a properly perfected mechanic’s lien. Then he can only expect payment to the extent that money is owed to the contractor at the time the lien is filed. That said, the owner has the right to finish the job. If there are no funds left, the subcontractor or supplier can only go after the general contractor for payment.

Mechanic’s liens are complicated. They consist of two documents: a Notice of Contract and Statement of Account. After filing these documents, the sub or supplier must file suit within 90 days, or the lien is no longer valid. Contractors and construction companies frequently fail to properly perfect or record their liens. If this occurs, they may be dismissed.

Generally, in MA, liens must be filed within 90 days of when the general contractor or someone working through him was last at the job. If an owner pays subs during the period that others can still record liens, he “pays them at his peril.” For that reason, the owner should record a Notice of Termination with the Registry of Deeds. That starts the clock running and all liens must be filed within 90 days of the recording.

At that point, the owner has a decision to make. Should he file a motion to dismiss the lien because no money is owed to the general contractor, or negotiate with the sub or supplier and pay them something to dissolve the lien? Unfortunately, the answer is, it depends.

In order to have a lien dissolved, your lawyer has to file an application to dissolve the lien with the court, and schedule a hearing. The whole process may take ten hours or more of your attorney’s time. As with any matter before a judge, there is no guarantee that the decision will go your way, even if the facts are on your side.

If the sub or supplier will agree to a smaller amount to pay the general contractor’s debt, it may be worth it to pay and have him sign a release. This may be a preferable and perhaps the only option if the subcontractor still has work to do, or if additional supplies are needed from the same supplier. It is generally more expensive to hire someone new to come in and complete work that has been started by someone else.

On the other hand, the amount owed may be so large that it is more economical to fight it out in court. If money is still owed to the general contractor, then that amount will be distributed pro rata to the subs who have filed properly perfected liens. Unless one can get all of the subcontractors to agree, it is better to obtain a court order decreeing the amount owed and how it should be distributed.

It is extremely stressful for an owner when subcontractors and suppliers start knocking on his door. Given the complexity of the situation, it is advisable for an owner to contact a construction attorney to determine how to best resolve the matter.

What to do When Your Contractor Doesn't Pay Subcontractors and Suppliers

2013-08-15T10:08:00.001-04:00

Recently I was contacted by some homeowners when their contractor told them that he had run into financial troubles and would not be completing their renovation work. They quickly discovered that he had not paid numerous subcontractors and suppliers and left them holding the ball. Over the years, I have seen this scenario many times. Contractors who are not adept at running their businesses “rob Peter to pay Paul.” At times, it is simply mismanagement of their finances, but sometimes it is intentional and criminal.

How can a homeowner avoid getting caught in this kind of situation? At its worst, I had a client who discovered that fourteen of the sixteen subs were never paid. The homeowner pays his general contractor in good faith and then faces the prospect of having to pay twice for the same work and materials. There are some ways that a homeowner can protect himself.

1. Make sure your contractor is properly registered and insured.

2. Ask references if the contractor was reliable, came to the work site regularly and followed the payment schedule.

3. Be wary of contractors whose bids are substantially lower. They may request more change orders in order to jack up the contract price to what it “should” cost.

4. Start with a good contract and link payments to the completion of milestones. Have a clause in your contract that allows you to cancel if your contractor fails to pay subs and suppliers.

5. Make the payment schedule detailed and spread evenly throughout the project (for example, 10% upon pouring the foundation, 10% upon completion of the framing, 10% upon completion of the rough inspection).

6. Avoid an overly large deposit. In Massachusetts, the deposit cannot exceed 33 1/3% or the cost of special materials; whichever is greater.

7. Require lien waivers in the contract as subcontractors complete their work and are paid.

8. Be wary of contractors who ask for payments in advance of the payment schedule.

9. Make sure that materials have actually been ordered by your contractor.

10. Make sure the payments do not get ahead of the work.

11. Periodically ask subs and suppliers if they are being paid as required.

12. If you are not able to be onsite to check the progress of the job, hire an owner’s construction manager to monitor the work for you.

If you sense a red flag, do not ignore it. Confront your contractor and find out why payments are not being made. If you are not satisfied that the job is being run properly, reserve the right to terminate your contractor and hire someone else to finish the job.

One of the homeowners who was abandoned by his contractor found himself in an excellent position. He had enough money left to finish the job with another contractor and did not suffer any damages. Even the best home improvement contractors have found themselves in a cash flow bind. The honorable ones will be forthright about it and address the issue. Be wary of the contractors who may abandon the job.

My next post: What to do when the subs and suppliers ask you for payment.

Safety Checklist for Homeowners

2013-06-09T10:17:00.005-04:00

In Massachusetts, homeowners are not held responsible for complying with safety regulations in construction. They can sandblast paint that may contain lead, walk on their roofs without protection and operate in blissful ignorance of the laws regarding safety. If homeowners hire contractors who do not follow safety rules, they are not responsible for that either. The risk of noncompliance falls on the contractor. If a homeowner creates an unsafe condition, of course he/she may be liable if someone gets hurt, but the homeowner does not have to police the contractor. In fact, since many safety regulations make the cost of doing a job more expensive, there is an incentive for homeowners to hire contractors who do not follow the rules! Today my friend and colleague, Mark Paskell posted a story about a roofer in Connecticut who died after falling off a roof http://www.thecontractorcoachingpartnership.com/Blog-Contractor-Coaching--Construction-Business-Coach-EPA-RRP-Lead-Rule/bid/65475/roofer-killed-in-fall-from-roof-in-westport-ct-osha-investigates?source=Blog_Email_[Roofer%20killed%20in%20fal]. You do not want to have that occur during your job.

Here is a checklist for homeowners to use when hiring a contractor:

Make sure your contractor has worker's compensation insurance to protect his employees, and call the insurance company to ensure that it is still in effect.
If the contractor is a sole practitioner, make sure he has health and/or disability insurance. Sole practitioners do not have to have worker's compensation insurance in Massachusetts. Check with your home insurance to see if they will protect you if someone gets hurt on the job.
If the contractor is handling any kind of hazardous waste, make sure the he is complying with the proper procedure for removal and disposal of the materials (this protects both of you).
If you hire a roofer, make sure that your roofer is using proper fall protection.
If your house is pre-1978 and has not been tested for lead, familiarize yourself with the Renovation, Repair and Painting Rule (RRP) and confirm that your contractor will be following the lead-safe procedures
Cooperate with your contractor by staying out of the construction site without asking whether it is safe to enter.
Keep pets and children away from the work.
Ask workers to leave the premises broom-clean at the end of the day; no one wants to step on or drive over nails.
Follow safety procedures yourself, even though they are not required.
Do not hire contractors who do not comply with the law!

As a homeowner, you have a responsibility to see to it that safety rules are follow when doing work on your home. Even if the law does not require it, you should try to make the work safe for your family, the workers and your neighbors.

Worker's Compensation Information Available Online At the Massachusetts Department of Labor Website

2011-04-25T23:32:00.001-04:00

Mark Paskell first posted this at his blog,

http://www.thecontractorcoachingpartnership.com/Blog-Contractor-Coaching--Construction-Business-Coach-EPA-RRP-Lead-Rule/, but I think it is so important that I wanted to post here as well. Make sure all of your contractors have worker's compensation policies if they have employees. If not, you may be held accountable if someone gets injured on the job. Bravo to the government of MA for making this information available to the public.

Here is a brief excerpt from the Massachusetts Department of Labor website;

Patrick - Murray Administration Launches Free Web-Based Tool

Will help Public Verify if Businesses have Workers Compensation Insurance Policy

Boston, MA - The Executive Office of Labor and Workforce Development (EOLWD) today announced the launch of the Massachusetts Online Proof of Coverage Application (POC), a free web-based tool that will assist the public in verifying whether a particular business has a current workers’ compensation insurance policy.

While the POC application is not designed to detect fraud, it may also assist EOLWD’s Department of Industrial Accidents’ investigations in determining whether fraud exists.

Employers are required by law in Massachusetts to carry workers compensation insurance to assist workers in the event that they are injured on the job. While the vast majority of Massachusetts businesses carry a policy, those who are not in compliance shift the burden onto those business that do. As a result, over $53 million has been paid out of the Workers’ Compensation Trust Fund over the past 10 years to pay for injury claims of workers who were employed by businesses that were not in compliance. DIA works closely with businesses through payment plans and more aggressive enforcement measures to make sure they are compliant.

The Lead-Based Paint Renovation, Repair and Painting Law Goes Went Into Effect on April 22, 2010

2010-05-25T21:31:00.001-04:00

Homeowners who are considering doing a renovation must know that if their homes were built prior to 1978, their contractors are required to follow certain procedures if they are going to disturb more than 6 interior square feet of paint or 20 exterior square feet of paint. This law requires that the general contractor must become certified with the Environmental Protection Agency (EPA), and that the contractor himself take an eight-hour class in order to become a certified renovator and learn lead-safe practices that contain lead dust.

Although the EPA claims that it will be doing a publicity campaign to inform homeowners about the Renovation, Repair and Painting Rule (RRP Rule), I have heard very little about it outside of construction circles. So, I feel that it is important for me as a construction lawyer to educate the public about this rule.

First of all, the preparation and education needed to comply with the law are going to cost the contractors more money. This will be reflected in an increase in the cost of jobs. The contractors must pay at least $300.00 to certify with the EPA, $200-$300 on average for the certified renovator training, the costs of training their workers and/or subcontractors, and additional costs for materials (plastic, protective suiting, masks, duct tape) and very expensive HEPA vacuums.

Homeowners who ask contractors to circumvent these practices and operate in violation of the law are doing these contractors an extreme disservice. This law is in place to protect homeowners and their families (and more particularly, pregnant women and children under six) and the contractors from potentially toxic lead dust. Lead poisoning is a real problem with potentially tragic results, and following the lead-safe practices has been shown to significantly reduce the exposure to lead for all involved.

Please understand that your contractor is doing the right thing by giving you a lead-paint brochure and following the rules. He could also face significant fines ($37,500.00 per infraction, per day) for failing to comply with this law. So, please do not blame the messenger. Respect your contractor and do not ask him to break the law.

Exterior Remodeling Offers the Best Value for Home Improvement Projects

2010-01-16T10:10:00.002-05:00

If you're trying to decide on a renovation project, here's one way to make your decision:

http://www.realtor.org/rmodaily.nsf/pages/News2009121701?OpenDocument&WT.cg_n=RMO&WT.cg_s=RSSDaily

Green Houses are Booming

2009-12-11T09:53:00.001-05:00

Statistics keep supporting the fact that green construction is up, even though the construction industry has been hit hard by the economy. If you aren't learning about green construction, you should be.

http://content.usatoday.com/communities/greenhouse/post/2009/12/green-home-sector-booms-despite-housing-slump/1

Challenge to Massachusetts Contractors

2009-12-11T00:38:00.001-05:00

Send me your residential renovation or new construction contracts (residential or commercial). After signing an engagement letter, I will review your contracts for free! If I don't find five things that might hurt your business, I will donate $50.00 to charity. If I do, you agree to donate $50.00 to charity. That's it. No strings attached. You do have to let me explain my recommendations to you; preferably in person.

Why Builders Shouldn't Cut Their Prices

2009-10-21T22:30:00.001-04:00

In a previous post, I discussed why now is a good time to renovate. I pointed out that builders are not as busy and can devote more time to their projects, the economy has weeded out a number of "fly by night" contractors who were not truly dedicated to the profession and there have been sales on supplies and materials. One advantage that I did not mention, however, was the opportunity to ask builders to cut their prices. That's because I do not believe it's reasonable for owners to try to negotiate lower prices, and it's not good for the profession for builders to do so.

Professional builders are usually quite realistic when preparing proposals for projects. I have met many contractors who proudly tell me that their jobs do not go over budget (barring unforeseen circumstances). They are usually quite clear about their markups and profit margins and accurate when determining allowances. They exemplify the adage that "you get what you pay for."

Consider for a moment the bid that comes in that is significantly lower than the others. Owners may be happy to seize the opportunity to get a job done for a bargain price. However, I have frequently seen the rest of the story in my practice. The project begins and then the owner is hit with a series of change orders that jack the price up to those of the other bids, or once the work is finished, the owner receives a final bill for "extras" that achieves the same result. Or, the contractor cuts corners and substitutes inferior materials or does work that is not up to a reasonable standard. At that point, a huge dispute arises and the parties end up in costly litigation.

Although this post may be filled with cliches, if something seems "too good to be true," it is. Choose a contractor based on references and experience. Do not try to bargain and take advantage because construction is slow right now. It is better to change the scope of your project and pay a fair price. This benefits all of the parties in the end.

Time and Materials Contracts-Are They Illegal in Massachusetts?

2009-10-17T10:47:00.000-04:00

I must admit, this question has been plaguing me as it pertains to Massachusetts. This issue applies to residential renovation only, but I know of many high-end contractors who use this method for their projects.

Massachusetts law provides:

Chapter 142A: Section 2. Residential contracting agreements; requirements

Section 2. (a) Every agreement to perform residential contracting services in an amount in excess of one thousand dollars shall be in writing and shall include the following documents and information:

(1) the complete agreement between the owner and the contractor and a clear description of any other documents which are or shall be incorporated into said agreement;...

(4) a detailed description of the work to be done and the materials to be used in the performance of said contract;

(5) the total amount agreed to be paid for the work to be performed under said contract;

Given that a Time and Materials Contract does not have a price, I would argue that it violates the Home Improvement Contractor Law. Further evidence to support that belief was supplied by the Office of Consumer Affairs and Business Regulation. They administer the Home Improvement Contractor Arbitration Program that is run by the state. The program is supposed to provide consumers (and contractors) with a more economical alternative to resolving disputes than litigation and does not require the parties to hire attorneys.

The Office of Consumer Affairs and Business Regulation recently rejected a claim filed by a colleague because they said that the Time and Materials Contract made it ineligible for the program.

The purpose of a Time and Materials Contract is theoretically to protect both the owner and the contractor. The owner is only paying for the cost of the actual materials (usually with a mark-up) and the actual hours worked. The contractor does not run the risk of under-bidding a job and much of the risk is removed because he is paid for all of the actual effort expended. These kinds of contracts can be fraught with problems because homeowners frequently question the amount of time spent and are frustrated if the contractor cannot substantiate his records. That said, as long as the contractor stays in constant communication with the owner (I believe in weekly meetings), they can work well. They also allow for instantaneous change orders to keep the project within budget.

However, when one looks at the statute, it requires, "the total amount agreed to be paid." Contractors should keep in mind that any violation of M.G.L. c. 142A is an automatic, per se violation of the Consumer Protection Act, M.G.L. c. 93A. Under that law, the consumer may obtain up to double or triple damages, attorney's fees, interest and costs in a verdict against the contractor.

So, a colleague has suggested that one way to avoid this issue is to include a guaranteed maximum price (GMP) in your contract. The GMP could be adjusted if necessary when a change order occurs. It is also important to include a detailed scope of the work to validate that price. I strongly urge all of you to include a GMP in your contracts and make sure that you ask for no more than one-third of that price for your deposit (unless the deposit also includes the cost of custom materials).

I cannot guarantee that this will avoid the question of the legality of Time and Materials Contracts, but we will not find out until this solution is tested in the courts.

Protecting & Preserving Fine Wine

2009-10-15T21:13:00.002-04:00

Here's a great guest post from Paul G. Cox, the Business Development Manager at Vigilant Woodworks on wine cellars:

If you have a growing collection of wine, it may be time to think about building a wine cellar or tasting/entertainment area in your home. Some time ago the custom wine room was unusual; today more and more wine lovers are learning about wine cellar construction or contracting the work out to those who know how to do the job properly.

Wine cellars are more than a dark, cool place to stock a collection of wine bottles. Today’s custom wine cellar is a controlled environment where humidity and temperature are regulated to allow wine to correctly age without damage to corks, labels or the wine itself.

There are two styles of wine cellars. One is an area that has been particularly made to store wine in the correct environment and the other is a stand-alone system that duplicates those conditions. A stand-alone wine cellar is not as effective as a custom-built version, but some people like the aesthetics of a small cooled refrigerator over a custom wine cellar. Those who do choose a custom cellar have three basic considerations for proper creation…

Temperature Control and Venting

A wine cellar room is used to hold and age the wine in the bottle rather than keeping it at a serving temperature. (A stand-alone wine fridge is excellent for carrying wine out of the cellar to hold at serving temperatures.) Aging wine is a balance of time, temperature and the chemical reactions that happen as a outcome of the two.

Wine should be matured in conditions ranging between 55 and 65 percent humidity and a solid 55 degrees Fahrenheit, within approximately one degree. Wine stored at higher temperatures will mature quicker and wine experiences chemical reactions at higher temperatures that devalue the notes of the wine over time.

In some areas of the country, property holders with basements often realize that conditions are right for basic wine storage, but seasonal temperature and humidity variations ought to be avoided. The perfect storage solution is a custom-built or DIY-construction wine cellar with climate and humidity control using a wine cellar cooling component to maintain the temperature at a stable 55 degrees.

These units come in a variety of sizes and the dimensions of your wine room will dictate what size you need to purchase. Never select a wine cellar cooler too small for your room; you most likely will never get a accurate, optimal storage temperature and the wine cooling system will become overtaxed trying to keep up.

Wine cooling units demand proper venting, and your wine cellar construction project requires either a hole in the wall to allow venting outdoors or enough vent space to flow warm air out of the room. Check the specs of your wine cooling unit; most require a venting space at least two times as big as the wine room space itself.

Electrical power is also an issue. Custom wine cellar builders recommend a devoted power source to run a wine cellar cooling system. Those who want to use a common power source frequently find the system overloading with blown fuses and other electrical problems.

Insulation and Vapor Barriers

The wine cooling system is only part of your climate control plan for a custom wine cellar; you also need a vapor barrier made of plastic sheeting used on the “hot” side of the wall. Some people wrap the interior of the wine cellar before inserting the insulation, leaving the plastic loose so that insulation can be placed between the studs in the wall. Cover the ceiling and the walls, or your vapor barrier will be incomplete. After the barrier is put in, the insulation comes next.

Good wine cellar building needs the right kind of insulation for your walls and ceiling. For instance, if you are building a 2x6 wall, R19 insulation is recommended, but if you have a smaller wall of 2x4, R13 may be your best bet. (The “R” designation represents the heat resistance of the insulation.) Ceilings require R30. Custom wine cellar builders should not install the insulation loose without packing the material into the sections, as this decreases the insulation’s effectiveness.

The next step is to install a kind of drywall called green board, which is moisture-resistant, making it a bit more expensive than regular drywall. Install an exterior-grade door to the wine cellar and your climate control plan is complete.

Lighting and UV Exposure Control

Wine is destroyed by UV exposure, which is why the bottles are normally constructed out of dark glass. Avoid putting in fluorescent bulbs in the wine cellar room, as they give off UV radiation. Control the brightness by using recessed lighting on a dimmer and avoid shining light straight on your wine bottles for long periods of time. Some wine cellar racks are made with compartments that hide bottles from the light which can help reduce exposure, but if your bottles are stowed in clear view, try to avoid the “spotlight” effect on your bottles.

Other Concerns

Nearly any kind of flooring can be used in your custom wine cellar. If your home is big enough for a wine tasting room to complement your cellar, you may wish to give them both an identical look, but by no means use carpet and rugs in the cellar area. They simply can’t hold up to the required humidity levels without surrendering to mold. Mold growth will wreck your wine, as can any powerful odor from chemicals or cheeses. A wine cellar should be used only to hold wine; keep food in a separate area.

Constantly examine the temperature and humidity in your wine cellar with an external sensor or gauge. By no means guess that the wine cooling system will always function accurately. A quick glimpse at the external gauge can offer you early notice if the wine cooling unit is having difficulties, or if the unit is showing a wrong readout because of a bad sensor or other technical troubles.

Constructing a custom wine cellar room may require some attention to the design demands of correct wine storage, however once properly built, you may realize that your collection grows quickly; it’s simple to invest more money in wine when you know it will be held safely for maximum delight.

About Vigilant

Vigilant is a premier design/build firm for custom and specialty cabinetry and millwork, specializing in wine cellars and wine storage and display for the home and commercial markets. Check out our extensive educational resources focused on building a wine cellar on our web site, www.vigilantinc.com.

Stylish Solar Roof Panels-A New Product

2009-09-04T09:00:00.000-04:00

Check out these solar roof panels that look like traditional roofing tiles:

http://www.solarfeeds.com/energy-boom/8756-stylish-roof-solar-panels-are-coming.html

Five Excellent Tips to Get Your Home Ready for Fall

2009-09-03T00:05:00.001-04:00

All of these tips are quite doable and environmentally friendly.

http://www.managemyhome.com/mmh/authored/articles/5+Tips+for+the+Dog+Days+of+Summer?sid=twitter

Preventing Fire in Your Home

2009-08-21T09:00:00.000-04:00

An important post on preventing fire in your home:

http://www.managemyhome.com/mmh/authored/articles/Preventing+Fire+in+Your+Home?sid=twitter

This article provides a great public service.

13 Top Bathroom Remodel Trends

2009-08-21T00:14:00.001-04:00

http://realestate.msn.com/article.aspx?cp-documentid=13108041

This is a great article for contractors and homeowners alike.

Home-Energy Plan Spreads Out Costs

2009-08-20T10:18:00.001-04:00

Why can't Massachusetts do this?

http://online.wsj.com/article/SB125064722656442071.html

I know a contractor who has started a business doing energy audits and I am going to ask him to guest blog. Now we just need local loan programs to defray the costs of doing energy-saving retrofits. At the end of the day, the homeowner is saving money by improving the environment, the contractors are getting much-needed work, and everybody benefits.

Five Misconceptions About Home Energy Performance

2009-08-19T11:58:00.002-04:00

I really like this post about the latest options in green products, because it points out that one should educate oneself before "jumping on the bandwagon" when choosing green materials.

http://earth2tech.com/2009/08/13/top-5-misconceptions-about-home-energy-performance/#more-38989

Remodeling Magazine's article on Energy Retrofitting.

2009-08-01T16:26:00.002-04:00

Part of dealing with the difficult economy is considering whether it is time to focus on new areas of practice or developments in construction. This article by Leah Thayer suggests that retrofitting houses with energy efficient improvements can benefit both contractors and homeowners alike.

In fact, I recently met a contractor who had started a new business doing energy audits and making recommendations. I have said frequently that one way to deal with the recession is to take the time to learn a new skill or work on a new area for your business.

Energy saving measures seem full of opportunity. There are many rebates available for homeowners to implement them, so this can be a win-win for homeowner and contractor alike.

http://www.remodeling.hw.net/blogs/postdetails.aspx?BlogId=lthayer_blog&PostId=88266

Do Homeowners Need an Advocate

2009-07-22T23:29:00.001-04:00

http://users.homepros.com/content/blog/656-3

An informative and useful post from HomePros.