If you don’t vote for me, you can check out the blogs and links listed there (including friends of Musings @matthandal and @melissabrumback among others).  Each of those listed provides a great insight into different aspects of construction, from law to marketing.  Even if you don’t vote (and I hope that you will), read some of these blogs, you will certainly learn something.

Thanks again to Mark and to all of my readers and contributors that make this blog fun to publish.

As always, I welcome your comments below.  Please subscribe to keep up with this and other Construction Law Musings.

PS- Guest Posts will start up again next Friday with what will be a great one!

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

While much has been (rightly) made of the marketing and business opportunities of social media and Web 2.0, as a construction attorney, I still cannot beat face to face interaction for fun and client development.  My view is that contractors (and legal clients in general) are more likely to trust and therefore hire those that they know personally.  Friendships can and do grow into attorney client relationships.

This is particularly true with the construction industry in Virginia (and presumably elsewhere).  Contractors and subcontractors are more likely to work with those they know, whether through an association like the AGC, or a breakfast meeting.  The recent convention refreshed many of these in person bonds and acted as another reminder of why I am so active in the organization.  In short, while a web presence is necessary, I would not give up the personal aspects of marketing.  Not only are a smile and a handshake a great combination for business development, they can, and do, lead to friendships that go beyond the potential business.

Thanks to all of you that said “hi” at The Homestead.  I appreciate the old friendships strengthened and the new ones made.  I also got to put faces to many folks that I’d talked to on the phone or interacted with online.  I really do enjoy meeting people in the Virginia construction industry and hope that we’ll catch up again soon.

As always, I welcome your comments below.  Please subscribe to keep up with this and other Construction Law Musings.

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This week, Musings welcomes back Mark Buckshon of the Construction Marketing Ideas blog to Guest Post Friday. Mark publishes several regional construction industry newspapers and websites. He can be reached at 888-432-3555 ext 224 or by email at buckshon@cnrgp.com.

Recently, in co-ordination with my business’s primary business consultant Bill Caswell, we coordinated a Webinar, Taking Your Construction Business to the Next Level. The participants enjoyed the event and discovered value in Bill’s insights, but I know I must give myself a large “F” for preparation and testing.  I simply did not allow enough rehearsal time to fully understand the Webinar software, so when our guests were waiting for the program to begin, I fumbled over technical details and we couldn’t use all of the online Webinar software’s functionality.

After the event, Caswell said he didn’t enjoy the lack of face-to-face interaction with participants.  They could communicate by text messaging but, even though DimDim’s advanced software allows a second camera and the ability to switch microphones, the rules of the game are different when people are located in many different locations (and in my rush to overcome the technical problems from lack of preparation, we couldn’t access these useful functions.)

DimDim’s software is free for Web presentations with 20 or fewer participants, and its fees for larger events and greater functionality are truly reasonable.  You can access the service at http://www.dimdim.com.

I made another mistake in the event’s advance marketing.  I tried out various types of event promotion software and went past the stage of reasonableness to overkill in repeated promotional messages.  One reader  sent me his forthright opinion.  “I’m really getting tired of your repeated Caswell promotions,” he wrote.  Following up to my apology, I communicated:  “BTW, I truly appreciate this because it raises a question:  When is there “too much” marketing?”

His response:

In response to your question, as Seth Godin says, “It’s all about me….me, me, me.” Readers are only interested in themselves (myself included). I believe there is a frequency “line” you can cross by marketing too much. Below the line represents value to the consumer (because you are making me aware of the product) and above the line represents meaningless (you’re wasting my time) promotion. Each of us draw the line in a different place, but we do draw a line.

So, it seems I over-marketed the event, while under-preparing the technical aspects, leaving the presenter in a frustrating situation where he had to proceed in a framework of discomfort.  Will Bill Caswell ever want to do this sort of thing again?  Will I want to go forward with other Webinar-type programs in the future?

The answer, in part, is that if we don’t try new things and learn from them, we cannot grow. But you can never prepare too much and if you are using various marketing methods, you should never forget that even if they are readily available and easy to use, you should always respect the frequency and volume of messages you deliver.

Lessons learned . . .

P.S.  After this posting, several readers – including Chris Hill – commented favorably, and the person who sent me the original complaint sent me a courteous email thanking me for accepting responsibility for my mistakes; showing the power of authenticity and humility in marketing. But I hope I don’t make these mistakes again.

Bill Caswell’s website is http://www.caswellccc.com.  It includes a useful free (and extremely quick) resource of answers to some of the most common and challenging business questions.

As always, please join the conversation with a comment below and contact Mark for more.  If you enjoy what you’re reading, please subscribe to keep up with the latest Construction Law Musings and check out the other Guest Post Fridays here at Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

It used to be that when you bought something (a car, a refrigerator, a television) it came with an owner’s manual that told you how to operate it, take care of it and prolong its usefulness to you. These days most of these manuals have been boiled down to a pdf on a website somewhere that you can access if and when you find the need. I understand that this is mostly in the name of saving cost (and trees) and at least the information is out there if you need it.

The relationship of the construction drawings to the written specifications is much more closely tied and yet most times there isn’t even that lonely little pdf orphaned out in cyberspace for you to hunt down and reference. Drawings, even on their best day, can only hope to tell part of the story. On their worst day they provide a hit or miss collection of thoughts that rely on the contractors good will and honesty to protect your client’s best interests.

Drawings are meant to generically represent the size, dimension, shape and relationship of the many components that make up a project. They also show details that depict the relationship of one product to another and how they join. The specifications actually tell you what those components are, who makes them, how you expect them to perform, how they are to be installed and in what finishes and textures. Without the specifications a wide range of products might satisfy the same overall image that the drawings represent. A drawing will say ‘install spray foam insulation Type 1’. The specifications will tell you it is closed cell polyurethane at 7.6 R per inch, the acceptable manufacturer(s), that a Type 1 is to be 5” thick, that it needs a required wrap to meet fire code and it should cure for a certain number of days before it is enclosed by sheet rock. Imagine putting that on the drawings the several dozen times the product occurs (sections, details, plans, etc.) and you get the actual point of using specifications: to help streamline the process. Not to mention if you want to change Type 1 to 7.5” or to open cell you only have to do it in one location, in the specifications.

Think about the project where the potential contractor has received his bid set only to see a lot of notes like “to be confirmed by the architect the field” or “as directed by the architect once the samples are received” or a generic statement that says “provide wood doors, jambs and hardware to our standards” that don’t mention that the products in question are expected to be hand laid up and lacquered sapelle with hand wrought door handles and hinges (haven’t you seen our brochure – that’s our trademark). The contractor who is familiar with what that architect is expecting has a major dilemma on their hands. Do you provide a price that gives the client what they are expecting (because they did hire this starchitect for a reason) or do you bid it like the drawings say, knowing you will be fighting for change order requests down the road, and alienating both the client and the architect. From the contractors that I have spoken, to this is too often the realty rather than the exception, particularly in residential and small commercial projects.

So why does this happen. One could postulate that it happens for the same reason architects don’t use formal contracts. I’ll let you decide whether it is the belief in the benevolence of mankind, or just sloth. Either way, you can get your butt sued and create all sorts of construction administration nightmares along the way. And given the logical outcome that you will, at some point have to go to the site and make all those decisions that you put off to get the drawings out ‘on time’, why not just do it right in the first place? Particularly since field time is much more expensive and less controllable than office time.

As always, Nick and I welcome your comments below.  Please subscribe to keep up with this and other Guest Post Fridays at Construction Law Musings.

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This month’s Virginia Business Magazine is a great issue on green jobs in Virginia. The whole issue is very worth reading.

I was fortunate enough to be interviewed in connection with the piece entitled “LEEDing the Way?” The topic of discussion in this article is the incentive provided by the market and state and local governments for building green.

Please check it out.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-No Derivative Works 3.0 U.S. license.

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For this week’s Guest Post Friday here at Construction Law Musings, we welcome back Elaine Hirsch.  Elaine describes herself as a kind of a jack-of-all-interests, from education and history to medicine and videogames. This makes it difficult to choose just one life path, so she is currently working as a writer for various education-related sites and writing about all these things instead.

While layoffs and business closings are making the news, there is one sector that is quietly educating and growing a new economy filled with transformation and economic recovery. Leadership in Energy and Environment Design (LEED) initiatives not only consume less energy in the long run, but bring recognition and cost savings for institutions in the short run. MBA Online states that the need for innovation is driven by an exceptionally difficult economic environment, and given today’s stagnant economy, greener energy solutions have become such innovations. According to the Pew Charitable Trust report, between 1998 and 2007 there were two times the amount of job creation in the clean energy sector as any other sector in the nation.

One of the significant differences in LEED driven job positions is that there are levels and opportunities unlike manufacturing or service positions that offer little growth. It is not necessary to spend the rest of your life paying back a student loan when going into a LEED based educational field. To date, there are almost 175,000 LEED professionals throughout the world that have been certified in special areas of green energy and this number is expected to double in the next 2-3 years. According to the US Green Building Council, green construction contributed to 2.4 million jobs between 2000 and 2008, and this number is expected to grow to 7.9 million by 2013.

The government has provided the work available through a Coalition for Better Buildings and affordable training can be easily found. There are 34 states to date that have adopted LEED-based policies for public and private buildings and hundreds of local governments are following suit. Being a veteran offers even better programs with reimbursements available for exams. Many times receiving a LEED Certification in a given area of your interest can open doors just by getting hired by a fine company at the ground level.

The economy is not continuing on a downward slide but simply transitioning into a new direction if you take the time to notice a LEED-based career and where it can lead. Just as electricity, gas-powered vehicles and plastics have changed our way of life, electronics, renewable energy and LEED building is leading us in a new, exciting direction. Take part in the positive side of a changing world and find out how beneficial Sustainability Education and Economic Development (SEED) can guide you to being competitive in the direction of tomorrow.

As always, Elaine and I welcome your comments below.  Please subscribe to keep up with this and other Guest Post Fridays at Construction Law Musings.

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For this mid-week Guest Post Friday post, we welcome Houston Neal.  Houston is the Director of Marketing at Software Advice, a website that presents reviews and comparisons of construction software. Houston joined the company in 2007, just shortly after it was started. He spends most of his day getting the word out about Software Advice’s resources. He enjoys researching and reporting trends in software and technology.

You can’t manage what you don’t measure, let alone improve it. Yes it’s cliche, but this old adage is just as true today as it was when William Edwards Deming first said it.* How do you know if your estimating processes are better than last year–or better than your competition–if you aren’t measuring them?

It’s imperative to set goals, performance indicators and benchmarks for your estimating processes. It allows you to track your own performance internally, and compare yourself to your competitors (or to industry standards). But how do you know what to track and measure?

Construction Estimating Benchmark Survey

Software Advice–an online resource that presents reviews of construction software–is hosting a survey about construction cost estimating. It’s a 20-question poll covering estimating processes and best practices.

The survey will run throughout the month of January and February. When all responses have been collected, Software Advice will publish a benchmark report, allowing contractors to compare their company against their competitors. To participate and sign up to get a free copy of the report, visit:

http://software-advice.polldaddy.com/s/construction-estimating-benchmark-survey.

Benefits of Estimating Software

Construction estimating software helps contractors measure plans, calculate material and labor costs, and produce detailed, professional proposals. It helps contractors win more bids, improve their job profitability, bid on more jobs and more. There are over 50 systems out on the market today. They are designed to support the unique needs of any type and size of company from the small residential remodeling company to the large heavy/highway contractor.

While the Software Advice survey is still underway, figures so far show that ~60% of contractors are currently using estimating software. “Faster estimate creation,” “more accurate estimates” and “rapid creation of project budget” were cited as the top 3 benefits; more than 80% of respondents experienced these benefits. Meanwhile another 75% of respondents–that use estimating software–have experienced “improved project profitability.”

No need for marketing messages here. The data speaks for itself. Contractors using estimating software are realizing benefits that many of their peers and competitors are not. If you’re among the minority still using manual methods, it might be time to evaluate new estimating software. At a minimum, you should see how you stack up against competitors by participating in the Software Advice poll.

Feel free to leave a comment if you have experienced the benefits of setting benchmarks or using construction estimating software.

*There is debate over whether Deming was the first to say this, or if he was misquoted.

Houston and I welcome your comments below.  Also, please subscribe to keep up with this and other Guest Post Friday Musings.

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Musings takes a step off of the green construction and marketing train to discuss an interesting decision from the City of Richmond, Virginia Circuit Court.

As Musings has discussed on several occasions, the economic loss rule in Virginia states that where a loss occurs that relates in any way to a contract, the injured party cannot recover for tort related damages.

For example, in what is now an infamous case in Virginia construction circles, the Virginia Supreme Court held that an owner cannot recover for fraud even if a contractor lied about materials used to build a baseball diamond.  The Court decided that the contractor would not have had a duty to tell the truth if it weren’t for the contract and, therefore, the economic loss rule applies.

Betco Construction, Inc. v. NWJ Chesterfield Apartments, LLC gives some hope to contractors who are seemingly staring down the barrel of this harsh “economic loss” rule.  In Betco, the Plaintiff, a Virginia construction company, claimed that it was fraudulently induced to execute a contract by statements of the Defendant about its corporate status.  Betco plead that the Defendants signed a construction contract and several change orders under the name of a company that no longer existed.

After initially invoking the economic loss rule in dismissing the fraud claims, and allowing Betco to amend its complaint, the court reconsidered and allowed the claim to go forward.  The Court at least thought that the Amended Complaint stated enough to get the Plaintiff contractor off of first base.

This case is interesting given the seemingly unwavering and expanding dedication to the economic loss rule in Virginia.  Contractors, subcontractors and their counsel would do well to learn the circumstances of this case.  The key component, in my opinion, is that the Court must have held that the defendants had a duty to properly state their corporate status prior to execution of the contract.

The take away?  I believe it is two-fold.  1.  Always be honest in your dealings with contracts and construction.  The economic loss rule does not protect those that induce others to enter construction contracts through dishonesty or misrepresentation of facts outside of the contract.  2.  Make sure that you, as a construction professional, look at all the circumstances surrounding execution of your contract when seeking avenues of recovery.  Betco gives you at least a glimmer of hope that you could recovery for fraud if you can find facts showing a duty outside of the contract. Of course an experienced construction attorney can help you ferret out proper facts to show such a duty.

As always, I welcome your comments below.  Please subscribe to keep up with the latest Construction Law Musings.

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For this week’s Guest Post Friday here at Musings, we welcome back a good friend and fellow construction attorney, Scott Wolfe Jr.  Scott is a construction attorney who practices law through his firm Wolfe Law Group in California, Washington, Oregon and Louisiana.  He is also the founder of Zlien, a nationwide preliminary notice and mechanic’s lien filing service. He is the author of blogs Construction Law Monitor and the Construction Lien Blog.

A few years ago I wrote a blog post that is quite popular on our Construction Lien Blog, titled “Filing A Lien Is A Discipline, and Not A Knee Jerk Reaction.”  I love the title to this post, because it expresses a real truth about successfully making a mechanics lien claim.

Regardless of where you are furnishing labor or materials, the act of filing a mechanics lien is more than just shooting off a lien affidavit after you’re already owed money. For most in the construction industry, and in most jurisdictions, mechanic lien claims are something that develop over time. Unfortunately, this development often starts with the moment you begin furnishing to the project.

Since writing that “knee jerk” article, I’ve thought (and written) about the concept even further. Successfully filing a mechanics lien claim actually requires companies to employ some sort of “lien policy,” focusing on compliance with all notice requirements and lien deadlines.  And the start of preparing such a lien policy is an understanding of what I call the mechanics lien ecosystem, or the “life of a mechanics lien claim.”  

I’ve broken it down into three steps: Preserve, Perfect, Enforce.  

Preserve

Every state and the territories (and Canada!) all have mechanics lien statutes, providing to contractors, subcontractors, suppliers and professionals the right to file a lien against the property where materials and/or labor are furnished.

However, to quality for this lien protection, construction participants must take certain actions to preserve these rights.  These preservation requirements will change depending on where you’re furnishing, but they always require some action at the start of providing services or materials. Here are the most common preservation requirements:

Preliminary Notices / Notices to Owner by Those Who Did Not Contract With The Owner

When states are referred to as “notice states,” that is typically because they’ve adopted this very traditional notice requirement, which mandates that all parties who have no contractual privity with the property owner send a “preliminary notice” or “notice to owner” to the property owner within a specific number of days after first furnishing labor or materials.

These prelim notices are usually required within 10-45 days from first furnishing of materials or labor (check your state’s rules), and must contain certain information within the notice and be sent by a certain method (usually certified mail with return receipt requested).  Those who fail to send their notice on time will forfeit their lien rights, with limited exceptions.

Notices Required by General Contractors

While most states’ notice requirements focus on those who did not contract with the owner, there are some laws out there that require notices from only those who contracted with the owner.

Some examples include:

1. Louisiana requires general contractors to file a Notice of Contract before commencing work to qualify for lien rights.
2. On certain residential and commercial projects, Washington requires the delivery of a Model Disclosure Statement.
3. On Residential projects in Idaho, Iowa, Louisiana & Oregon, a Notice of Lien Rights must be provided to the owner.
4. In Utah, general contractors must file a “Notice of Commencement” at the start of work.

Failure to send these notices will also result in a forfeiture of lien rights.

Perfect

Preserving your mechanic lien rights requires compliance with certain notice prerequisites that apply when starting to furnish labor and/or materials. These notices must be delivered before any accounts are ever overdue, and indeed, before anyone is even owed money.  

The perfection requirements, however, come on the other side, when the contractor, supplier or professional has performed its work and is now due payment.

If lien rights were preserved, a contractor, supplier or professional can “perfect” it’s lien claim by filing the same with the county recorder or clerks office. Depending on your state, the filing can go by a number of names: Notice of Claim, Claim of Lien, Construction Lien Claim, Mechanics Lien Claim, Statement of Claim and Privilege, etc.  It’s all the same.  These are all documents that outline what work you performed, where, for who and the amount owed to you.

When filing your mechanics lien claim, it’s important to be very careful. Since these claims encumber real property, courts typically require strict compliance with the lien statutes, which means you better have all the required information in your claim.  There are lots of traps for the inexperienced, with the most common mistakes being a failure to identify the property with the legal property description and not including all of the statutorily required data.

Properly preparing and recording your mechanic lien claim, and then serving a copy of the same on the property owner and all other required parties within the statutory required time frame, will act to perfect your mechanic lien rights, and a mechanics lien claim will then encumber the property…until your deadline to enforce it.

Enforce

The third and final step in the life of a mechanics lien is the enforcement of the same.  One common misconception about liens is that they will encumber the property until paid.  That’s not true. After a mechanics lien claim is perfected by recording, it only remains enforceable for a specific period of time.

Therefore, if the mechanics lien doesn’t produce payment after filing, then you will be required to file a lawsuit to foreclose upon or enforce the claim.

Again, each state is different as to when this foreclosure action is necessary.  California, for example, is on the short end requiring a foreclosure lawsuit within 90 days from when the mechanics lien is filed. Ohio is on the long end, giving lien claimants 6 years from filing to have the lien enforced.  If there’s an average out there, it’s probably between 8 and 12 months.

While the timing is different, the general requirement is the same: After a certain period of time, you’re required to file a lawsuit to foreclose on the lien. Therein, you’ll need to prove your case and demonstrate you are owed the money you claim.  If you win, the court will order the property sold to pay your debt.

Scott and I welcome your comments below.  Also, please subscribe to keep up with this and other Guest Post Friday Musings.

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As we enter 2012 expectations for the new year are in all of our thoughts.  The best laid plans are made and possibilities seem endless.  New Year’s resolutions will be made (and possibly broken).

As a construction attorney here in Virginia, if I could ask contractors and subcontractors to make (and keep) one resolution for 2012 it would be to set expectations for a construction project before, during and after the project.  More construction claims and lawsuits arise out of poorly managed expectations for the project.  Everything from a poor explanation of the costs and benefits of green building to the simple failure to draft a solid contract with a well defined scope of work can lead to claims and conflicts that can only make attorneys happy.

Contractors (and even subcontractors and suppliers) must manage expectations through education of those “upstream” of them on the job site to avoid shock on the part of those with the money.  Such education takes many forms, I’ve listed several key ones  here (you will notice that many are are the same things that we lawyers love to see in contracts).

• A solid contract with a well defined scope of work.
• Written Change Orders!
• A pre-construction “educational” meetings
• Consistent communication throughout the project with status updates, etc.
• Resolving issues as close to their occurrence as possible
• E-mail confirmations of field changes
• Payment “reminder” letters

Setting realistic and understandable expectations for a project, and reinforcing them on a regular basis throughout, keeps all of the players in a commercial or residential construction project on the same page.  Following these relatively simple steps will keep expectations in line and avoid most issues on a construction job site.

I hope you have a great 2012.  Resolving to keep expectations and reality in line during construction will help.

I am happy to hear any other items that should be added to the above list in a comment or e-mail.

As always, I welcome your comments below.  Please subscribe to keep up with this and other Construction Law Musings.

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