Construction Law & Claims Seminar

CALL TO REGISTER FOR THE NEXT SEMINAR

Presented by:

Gullage, Tickal & Fellows, LLP

Construction Law Group

Getting Paid in Today’s Market

1. Mechanics Lien Laws
   • How to Properly Notice & File a Claim
   • Waiver of Lien Rights
   • What to do if an Owner/Contractor Files Bankruptcy
   • Time Limits

1. Bond Claims
   • How to Make a Bond Claim on Public & Private Projects

1. Getting Paid Under Alabama’s Prompt Pay Laws
   • Public Works
   • Private Projects
   • Federal Prompt Pay Act

1. How to Increase Your Cash Flow
   • Retainage: How Much is allowed & when should it be released
   • Pay if/when Clauses
   • Collect on Old Accounts

1. Contractor Bankruptcy: Is All Lost?
   • Filing Liens in Bankruptcy Court
   • Filing Proof of Claims

This is a basic to intermediate level seminar meant to be a practical introduction to Alabama’s Construction Law.

Who Should Attend?

• General Contractors
• Subcontractors
• Suppliers
• Materialmen
• Rental Supply Companies
• Sureties
• Developers
• Owners
• Architects
• Attorneys

Why this Course is Important?

• The Construction Industry, particularly in this challenging economic period, deals with credit and payment on a daily basis. Our industry extends large amounts of credit to numerous companies and individuals during the construction process. It is importance to get paid for your work.

About the Presenters:

The Gullage, Tickal & Fellows Construction Law Group

• Our Construction Law Group, headed up by Jeff Tickal & Mike Fellows, was formed to give the construction industry a local alternative to Birmingham and Atlanta firms. Out lawyers hold degrees in Civil Engineering, Architecture, & Building Science, as well as a former Professor in the Building Science Department at Auburn University. Over the past 2 years our group has negotiated contracts and settled claims ranging from 5,000 to 70 million dollars. Our attorneys have lectured nationwide on construction topics and authored numerous articles.

Where:

When:

How to Attend: The cost is free; however space is limited. Contact our office for

reservations. 334-737-3733

No representation is made that the quality of legal services to be provided is greater than the quality of legal services provided by other lawyers.

PROMPT PAY LAWS

AUBURN-OPELIKA SEMINAR

BY GULLAGE, TICKAL, & FELLOWS

1) ALABAMA PRIVATE PROMPT PAY LAW 8-29-1

a)    Time limits for Owner to pay Contractor and for Contractors to pay their Subs

b)   DOES NOT APPLY TO

i)      Residential homebuilders.

ii)   Improvements to real property intended for residential purposes which consist less than 17 units.

iii)            Contracts, subcontracts, or sub-subcontracts in the amount of ten thousand or less.

iv)Contracts with the state or local governments of the State of Alabama.

c)    TIME LIMITS TO PAY

i)      Whatever is set out in contract.

ii)   If not set out, then

(1)                        Owner has 30 days from pay request to pay

(2)                        Contractors have 7 days from receipt of payment to pay subs.

d)   PENALTIES FOR UNTIMELY PAYMENT

i)      Interest of 1% per month

e)    RETAINAGE

i)      Retainage percentage withheld from subs below you cannot exceed the percentage withheld by payor above you.  CAN’T BE WAIVED BY CONTRACT

(1)                        If excess is withheld then sub whose money was wrongfully withheld should be paid 1% per month on the excess amount held.

f)     EXCUSES FOR WITHHOLDING PAYMENT-   bona fide dispute regarding

(1)                        Unsatisfactory job progress.

(2)                        Defective construction not remedied.

(3)                        Disputed work.

(4)                        Third party claims filed or reasonable evidence that a claim will be filed. (liens,etc)

(5)                        Failure of the contractor, subcontractor, or sub-subcontractor to make timely payments for labor, equipment,and materials.  (people underneath the claimant)

(6)                        Property damage to owner, contractor, or subcontractor.

(7)                        Reasonable evidence that the contract, subcontract, or sub-subcontract cannot be completed for the unpaid balance of the contract or contract sum.

(8)                        In the event that there is a bona fide dispute over all or any portion of the amount due on a progress payment from the owner, contractor, or subcontractor then the owner, contractor, or subcontractor may withhold payment in an amount not to exceed 2 times the disputed amount.

ii)   If Payor disputes a request they must notify the requesting party w/i

(1)                        15 days if he’s an owner

(2)                        5 days if he’s a contractor w claims from a sub.

g)    LAWSUIT DAMAGES

i)      Amount owed

ii)   Interest

iii)            Attorneys Fees

iv)Court Costs

v)   Reasonable Expenses of Litigation

2)   ALABAMA PUBLIC CONTRACTS PROMPT PAY LAWS 41-16-3

a)    Contractor shall pay sub upon receiving payment from the state within time set in contract.

i)      If no time in contract, then within 7 days

b)   Retainage withheld by Contractor cannot exceed amount withheld by owner.

c)    EXCUSES

i)      Bona fide disputes- but sub should be notified of dispute w/i 5 days of making pay request

(1)                        No more than 2 X disputed amount may be withheld

3) FEDERAL PROMPT PAY

a)    WHEN IS PAYMENT DUE:

i)      To GC-  w/I 30 days  of receiving proper pay request, unless contract says otherwise

(1)                        14 days if it’s a progress payment request that has already been approved

b)    A “PROPER” PAY REQUEST

i)      Itemized- $ requested, work done, Total $ in contract, Amounts pd to subs, etc.

ii)   Certified

(1)                        Performance had been done.

(2)                        All debts to subs/suppliers up to date from prior payments.

iii)            Change Order Approval must precede invoice for same item.

iv)Gov’t had 7 days to dispute “properness of invoice”

c)    FAILURES

i)      Can result in interest but it must be requested in writng or be lost.

ii)

d)   FEDS HAVE MANY MORE HOOPS TO JUMP THROUGH TO GET ANY CONSEQUENCES FOR THEIR PAYMENT FAILURES.

i)      ASK THE GOV’T AGENCY TO PROVIDE YOU WITH ALL THE REQUIREMENTS OF PROMPT PAY PROVISIONS AT TIME OF CONTRACT.
-Mike Fellows

LIEN LAW OUTLINE

GIVEN AT AUBURN-OPELIKA SEMINAR

BY GULLAGE, TICKAL, AND FELLOWS

1) WHAT IS A LIEN?

a)      AN INTEREST IN PROPERTY

b)      A process that may help get you paid

2) ALABAMA’S LIEN LAW IS OFTEN CONFUSING.

i)        It’s statutory –created by the legislature.

(1)   Many hoops to jump through and if you miss one you may lose your lien.

3) WHAT ITEMS ARE LIENABLE?

a)      Work, Labor, or Material improving the land.

4) AMOUNT OF THE LIEN

a)      The amount owed after “all just credits have been given” (keep good records)

b)      Intentionally overstating the lien amount may void the lien.

5)      PRIORITY OF LIEN-  who’s first in line, you, the bank, or another contractor?

a)      Priority is based on your 1^st day of work. (Keep records.)

6) FULL PRICE LIENS

a)      Based on Direct -notice to the Owner that the Owner is expected to foot the bill.

b)      REQUIREMENTS

i)        Before furnishing material shall notify the Owner in writing materials to be provided along with price and credit terms.

ii)      An original contractor is not required to provide this notice because he or she is already in direct contract with the owner.

7) UNPAID BALANCE LIEN

a)      Lien on the property which is limited to the amount the owner still owes the GC.

i)        Example

b)      It is always safer to assume you only have an unpaid balance lien and do all the notice requirements.

c)      NOTICE OF INTENT TO FILE LIEN on an unpaid balance lien is given after performance but before filing a lien.

i)        REQUIREMENTS

(1)   state Lien is claimed,

(2)   state amount claimed

(3)   Who is claiming the lien

(4)   describe subject of the lien

(5)   state the person/company who owes the debt

ii)      DELIVERY REQUIREMENTS

(1)   Owner

(2)   Lender

(3)   Contractor

(4)   Others with Property Interest

(a)    * Do title search

d) FILING OF STATEMENT OF LIEN ITSELF

i)        TIMING- after Notice of Intent

ii)      FORM-  Must Contain

(1)   Demand Amount

(2)   Description of the property liened

(3)   Name of the Owner(s) of the land

(a)    An under oath personal knowledge verification

(4)   WHERE FILED- in each probate court where the land lies.

(a)    WHEN FILED-: after notice and within 30 days for laborers, 4 months for 2^nd tier, and 6 months for original contractors.

FILING SUIT TO PERFECT THE LIEN

a)      WHERE- in Circuit Court s where the property is located.

i)        WHEN- Within 6 months of the maturity of indebtedness.

b)      WHO-  Named Defendants must include

(1)   Owner(s) of property

(2)   Lender /Mortgage Holders

(3)   General Contractor (on unpaid balance lien)

(4)   The contractor who was to pay you.

(5)   All other interest holder’s in the property including lease tenants.

(6)   Any subsequent purchasers.

ii)      WHAT:  Must include a judgment for Money due claim as well as normal lien claim.

iii)    Watch out for 1)Bankruptcy or 2)” Pay if Paid” clauses.

9)      SUBSTITUTE SECURITY-  Liens can be bonded off until final resolution.

10) RELEASING YOUR LIEN

a)      Once satisfied, the lienor must acknowledge satisfaction on the margin of the Lien in probate Court. w/i 30 days of request to do so.

b)      FAILURE- can lead to a claim against you and possibly slander of title.