All posts by Brigitta Shouppe

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Construction trends to look for in 2016

Many plugged into the construction industry are seeing some good signs for the year ahead. Here are three things we have our eyes on in 2016:

1. General construction and building continuing to rise. Dodge Data & Analytics recently released their 2016 outlook. Dodge Data & Analytics is a leading provider of data, analytics, news and intelligence serving the North American construction industry. The report predicts that total U.S. construction starts for 2016 will rise 6% to $712 billion, following gains of 9% in 2014 and an estimated 13% in 2015. As the economy has rebounded and interest rates have stayed at or near all-time lows, many organizations are now investing in new projects or moving forward with projects that had been on hold for years.

2. Further integrating technology tools on the job site.  In a previous post we talked about how we use 3D modeling to help customers understand what the finished product will look like so that we can better talk through plans together. Construction experts agree this is a growing trend that more and more contractors will adopt. From the consolidation of multi-ap tools to one core project management to more mobile devices on job sites, tech is finding its new role in the construction industry.

year-growth-building-improvement-business-general-concept-white-background-500134493. More employment opportunities in construction. The available labor pool for skilled construction work has long been an issue around Tampa Bay. With spending on nonresidential buildings expected to rise another $40 billion in 2016, this chasm between skilled labor and employment will grow. The improving economy calls for new projects, which requires even more employees… Know someone who is interested in breaking into a new field? There are a number of free ways to be trained, certified and employed in the field of Tampa Bay area construction.

Bonding

When hiring a contractor, consider protection

Like any major purchase, when hiring a general contractor you probably take several things into consideration – references, portfolio and price – to name a few. But instead of a finished product that you can see/feel/touch, in a way, you’re purchasing a General Contractor’s experience and reputation. While most contractor’s will work to keep customers satisfied, you don’t really have any guarantee that the job will end up the way you wanted, that an unforeseen event won’t ruin your plans, or that your contractor will come through the way they’ve promised.

So what will you do if your contractor skips town without paying subcontractors leaving a lien on your property, if something impacts the timeline, cost or overall completion, or if there’s a dispute over the terms of your contract? Bonding is one form of protection you may have heard about but do not yet understand. Often at PJ Callaghan our reputation for excellent service precedes us and we do not use bonds. However, if you’re unfamiliar with your contractor or concerned for any reason, asking them to obtain a bond is a reasonable and fair way to ensure you do not incur any losses.

Daniel Oaks, our Surety Bond Specialist with Nielson, Wojtowicz, Neu & Associates, had a few things to say about the importance of Bonds, how they work and why you should consider them:

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“A Surety Bond is a good thing for owners, investors and lenders because it acts as a third party guarantee that your project will a) be done to the terms and specifications of the contract and b) that you will end up with a lien-free finished project. Without a bond you’re putting a lot of trust in the contractor. In fact all government projects over a certain threashold require the winning bidder to obtain a bond to protect the taxpayer.

“To the average person bonding can sound a lot like insurance – you pay a small percentage and if something goes wrong the company makes you whole. The biggest difference between insurance and bonding is that there are three parties involved in bonding. The Contractor will obtain the bond and pay the premium, but in the event of a loss YOU will receive the benefits of the bond, not the contractor.

“While insurance companies factor in losses in their business model, make loss payments and move on, surety companies, on the other hand, underwrite to a no-loss scenario and will be sure to go after the contractor in the event  the surety has to respond under its bond. Defaulting on a contract doesn’t happen very often, but when it does it can be catastrophic. If it gets to a point when the contractor defaults on their contract forcing a response from the surety, the contractor is likely in a dire situation financially and operationally. This is a worst-case scenario for contractors and they will do everything in their power to ensure the project is successful and to keep it from happening.

“Though many customers do not request bonds in common practice today, we recommend they consider it. Even if you have an established relationship with a builder, it is difficult for you as an outsider to be certain they can complete all the jobs to which they’ve committed. When you require them to obtain a bond we do the legwork and look at ALL of their records, including their past history, financial statements, current and projected contracts, tax records, credit reports, etc. to ensure they are in a financially sound position to complete your job, in addition to assessing their operational ability to physically manage your project.

“This was a quick recap of a complex process that has variations from state-to-state. If I could tell readers one thing it would be to explore and consider bonding on your next project. Without a bond you are putting a lot of trust in the contractor and this is the best way to ensure you investment leads to a lien free project completed according to the terms and specifications of your contract.

Daniel Oaks is Surety Specialist with Nielson, Wojtowicz, Neu & Associates.

With eight locations throughout the southeast, Nielson, Hoover & Company is a nationwide leader in Surety, Construction and Commercial Bonds and is the largest provider in the Southeast.

Daniel earned his undergraduate degree at Troy University in Insurance and Risk Management. After working throughout the nation as a surety underwriter, he, his wife and family settled back in Florida.

PJC places two Youth Connect participants

Youth Connect, a specialized program within CareerSource Pinellas, seeks to provide “guidance, support, and financial assistance” while placing qualified young adults in academic or vocational training programs. Unlike a temporary work-service program, Youth Connect is designed to give young adults a path to self-sustaining careers. This month P.J. Callaghan is proud to announce placing two Youth Connect participants in full-time positions.

“We’re proud to support our local community by the work we do, but also by the jobs we create. They’ll be working on major projects and learning from some of the most experienced metal construction workers in the business from day one,” said Tobin Robeck, Sr. Vice President.

More about Youth Connect: Eligible individuals are ages 18 to 24 and have a qualifying hardship such as homelessness, foster care recipient, high school drop-outs etc. CareerSource provides academic and career assessment, counseling, assistance with developing a career plan and on-going support. Eligible youth participate in work readiness activities, gain work experience and job related skills. Interested in how your business can help a deserving young adults find a careers? Contact a Youth Career Coordinator today at (727) 470-7565.

The Need-to-Know’s re: Notice to Owner

Whether you’re a developer taking on a multi-million dollar condominium project or a homeowner finally adding that extra bedroom on your house, you should be aware of the laws impacting your property interests. The importance of hiring an experienced contractor and having regular communication cannot be understated. At PJ Callaghan, we receive questions and calls about Notice to Owner (NTO) letters on a regular basis.

This month we took a few minutes to sit down with Ryan Griffin, a partner with Johnson, Pope, Bokor, Ruppel & Burns, LLP. Johnson Pope is a premier regional law firm in Tampa Bay. Ryan breaks down the legal jargon around Notice to Owner (“NTO”) and what to do if you find yourself with a NTO letter. Haven’t signed a contract yet? Stay tuned, next month we’ll highlight best practices to protect both parties when structuring contracts…

Ryan Griffin Johnson Pope“Under Florida law, those who perform work on your property or provide materials and are not paid-in-full, have the right to enforce their claim for payment against your property in the form of a construction lien. While you may talk to your general contractor (GC) daily, you may not know what subcontractors or material suppliers (collectively: “Subcontractors”) are being hired and paid by the GC to complete every aspect of your project.

“In an ideal world you pay your GC and they turn around and pay their Subcontractors promptly. Unfortunately, that does not always happen. Even if you pay your GC in full, if the GC fails to pay its Subcontractors, under Florida law they can look to your property for payment via a construction lien. While the thought of a lien on your property can be daunting, there are some simple things to remember and precautions to take to ensure the construction project does not become a nightmare.”

Step One: Identify yourself and others working on your project

“Florida law provides a number of mechanisms to assist an owner in identifying the GCs, and Subcontractors that will be working on your project. One of these mechanism is filing a Notice of Commencement at the outset of your project. This also notifies the GC and Subcontractor of who you are and how they can contact you if there is an issue (i.e. non-payment by the GC). You should also be aware that you have the right to request in writing from the GC a list of all Subcontractors who have a contract with the GC. This is a great way to keep track of and verify whether all subcontractors have been paid when it’s time to pay your GC.”

Step Two: Obtain releases before paying your GC

“To best protect yourself, get the GC to have the Subcontractors issue you a Release of Lien before making any final payments for work performed. A Release of Lien is a written statement that removes your property from the threat of lien. If your contract with the GC calls for partial payments before the work is completed, get a Partial Release of Lien covering all Subcontractors’ work and materials used to that point. Upon completion of the project, and before you make the last payment to your GC, obtain an affidavit from your GC that specifies all unpaid parties who performed labor, services or provided services or materials to your property. Make sure that your GC provides you with final releases from these parties before you make the final payment.”

Step Three: Save all documentation

“In order for a Subcontractor to attempt to obtain a lien, it must go through many steps (i.e. send a proper Notice to Owner, perform work on your property, file a Claim of Lien, etc.). Each of these steps has a proper procedure and technical requirements. If the Subcontractor has not taken the appropriate steps, they may not have a valid Claim of Lien. The notices, receipts, releases, copies of payments, etc. that you have saved will be critical to your defense against a Claim of Lien.”

Step Four: Contact a lawyer/Contesting A Lien

“In the event that you need to contest a lien or defend a lien foreclosure, due to the complexity and time sensitivity involved, I would advise you to immediately contact a lawyer that specializes in this area of the law.”

About Ryan Griffin:

Ryan has a B.S.B.A. from the University of Florida and a J.D. and M.B.A. from Stetson. He is certified as a Florida Supreme Court Civil Court Mediator to practice in the Eleventh Circuit Court of Appeals and the Southern, Middle & Northern Districts of Florida. Ryan is a state and federal trial lawyer and certified court mediator. Ryan’s practice areas include: construction litigation, real estate law, commercial litigation and other business disputes.1006123_472265246188502_1579577636_n

Based in St. Petersburg, Ryan’s civic involvements include: Past President of the ARC of Tampa Bay (formerly UPARC), Board of Governors of the St. Petersburg Chamber of Commerce, Lawyers for Literacy and Partners in Self-Sufficiency (which assists low-income families in achieving economic self-sufficiency).

About Johnson Pope:

Founded in 1973, Johnson Pope is a premier Tampa Bay regional law firm with offices in St. Petersburg, Clearwater and Tampa. The full-service firm employs 50+ attorneys and a total staff of over 200. Johnson Pope is AV-Rated by Martindale-Hubbell, and is consistently recognized by the Best Lawyers in America, as well as Florida Trend’s Legal Elite, among other honors.