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Mechanic’s Lien Reigns Supreme in the Battle of a Project Default? Not for a Waiving General

In what can only be described as a devastating result for a general contractor, the Fourth Appellate District held that a general contractor may prospectively waive the priority of a mechanic’s lien to the owner’s...more

Certificates of Insurance: What’s in Your Portfolio?

On September 24, 2014, a New Jersey appellate court decided Selective Ins. Co. v. Hospicomm, Inc., 2014 WL 4722776 (N.J. Super., September 24, 2014). The dispute in that case arose out of a nursing home construction project...more

Contractors: Beware the Subordination Clause

Did you know that California is the only state in the country in which mechanics liens are a constitutional right? Tis true. Article XIV of the California Constitution states: Mechanics, persons furnishing...more

Construction Case Law Update - September 2014

FLORIDA STATE CASES - Forum selection clause in construction contract will not be enforced where third party defendant would be forced to testify in two venues. Forum selection clauses in contracts are generally...more

Mechanics Lien Subordination: Illinois Further Limits Construction Lenders’ Ability To Ensure Priority Against Mechanics Liens

On July 16, 2014, Illinois enacted Public Act 98-764 (Senate Bill 3023) (“SB 3023”), which amends the Illinois Mechanics Lien Act (770 ILCS 60/ et seq.) (the “Act”) to prohibit subordination of mechanics liens on Illinois...more

Investing in Georgia: Economic Development Newsletter - August 2014

Welcome to King & Spalding's economic development news bulletin, Investing in Georgia. In this edition, you will find: - A report on the volume of private activity bond issuances in the United States generally and in...more

Changes Made to the Pennsylvania Mechanics’ Lien Law to Protect Holders of Open-End Mortgages and Residential Property Owners

Mechanics’ liens grant contractors and subcontractors an interest in improvements made to real property to secure the payment obligations of owners to contractors, and of contractors to subcontractors. While these liens...more

News for Contractors and Construction Lenders in Arizona and Nevada – The Contractors' Lien May Trump the Bank's

In addition to an arid climate and plenty of sunshine, Arizona and Nevada have something more to offer contractors: a potentially advantageous position over lenders when a project goes bad. When a project derails and...more

Construction Lenders Beware: Unbonded Stop-Payment Notices May Be Worth More Than The Paper They Are Written On

A common perception in the construction industry is that the most valuable part of an unbonded stop payment notice is the paper it is written on, at least when it is served on a construction lender. While an unbonded stop...more

Proceed With Caution: Factoring Construction Invoices - Recent Indiana Case Highlights The Risks To Contractors Who Verify...

Invoice “factoring” is a financing arrangement in which a subcontractor sells outstanding invoices to a factoring company. Here’s how it works. ...more

P3 101— Is Your Local Legal Team Ready to Help on a P3 Project?

For many U.S. construction businesses, the term “P3” may conjure images of “the big catch”—much discussed but rarely seen, at least not at your fishing hole. While the public-private partnership model has long been used in...more

White House Backs the $2.2 Billion Purple Line

On Tuesday, March 4th federal officials recommended the Maryland Transit Administration’s Purple Line Public-Private Partnership Project ("Purple Line") to receive $100 million in federal construction money as part of the...more

Court of Appeal Confirms that Laborers and Materialmen Have Priority over Construction Lenders to Funds Used to Develop the...

A California Court of Appeal recently ruled that a construction lender must make available to stop notice claimants those amounts which the lender has already disbursed to itself on the construction loan. (Brewer Corp. v....more

Mortgage Lenders Can’t Jump Ahead of Mechanic’s Liens

In Weitz Co., LLC v. Heth, 223 Ariz. 442, 314 P.3d 569 (Ct. App. Nov. 26 2013), the Arizona Court of Appeals held that the plain language of Arizona’s mechanic lien statute, A.R.S. § 33-992(A), does not allow a lender to jump...more

There’s a Reason Why It’s Called a “Stop Payment” Notice Not a “Let Me Pay Myself First” Notice

In a decision published January 31, 2014 (Brewer Corp. v. Point Center Financial, Inc.), the California Court of Appeal (Fourth District) affirmed a trial court’s judgment holding a lender liable for contractors’ stop notice...more

Homebuilders And Their Affiliates: Unexpected Tie-In Issues May Be Lurking

From my work defending mortgage loan originators, including many homebuilder captives, against mortgage repurchase and indemnification claims, as well in my role as an editor of Bilzin Sumberg’s Mortgage Crisis Watch, I have...more

Arizona Court of Appeals Holds That Certain Residential Developers Are Not Protected By The Anti-Deficiency Statute After...

Nearly three years ago, in M&I Marshall & Isley Bank v. Mueller, the Arizona Court of Appeals held that the Arizona anti-deficiency statute protects a borrower who started, but never completed, construction of a single-family...more

Arizona Court of Appeals Gives Contractor the Edge over Certain Lenders in Mechanic’s Lien Foreclosure Lawsuit

In lien foreclosure lawsuits involving lenders and contractors, priority is everything. Where you stand in terms of priority will not necessarily determine when you get paid, but rather will determine whether you get paid....more

Guarantors Beware! A.R.S. § 33-814 May Not Save You from a Deficiency Judgment

In First Credit Union v. Courtney, 309 P.3d 929, 669 Ariz. Adv. Rep. 18 (Ct. App. 2013), the Arizona Court of Appeals rejected three creative arguments that A.R.S. § 33-814 protected the guarantors from paying on their...more

Changes of Note to Lenders From the 2013 Legislative Long Session

During the 2013 legislative session, several new laws were passed which directly affect the banking and financial services industries. While most of these changes are relatively minor, they are certainly worth noting. Below...more

Preconstruction Deposits Are Lifeblood For Lending: Q&A With Bilzin Sumberg’s Adam Lustig

A few years ago, when condo developers began requiring significant up-front deposits from buyers prior to the finish of a project, it was a work-around for a lack of financing in the market. In the last year, lenders...more

Pennsylvania Seeks To Expand P3s to Local Governments and School Districts

In 2012, Pennsylvania joined the growing list of states with legislation authorizing public-private partnership (P3) projects. Pennsylvania’s P3 legislation related specifically to transportation projects. Recently,...more

Texas Department of Insurance Takes Narrow Interpretation of Code Concerning Construction Payment Bond Claims

Chapter 3503 of the Texas Insurance Code (the Insurance Code) governs the obligations of sureties in handling of claims under construction payment bonds. Recently, the Texas Department of Insurance (TDI) communicated its...more

Lenders Versus Mechanics’ Liens in West Virginia: A Question of Priorities

Finally! After days, weeks, sometimes even months of waiting, you as the lending officer received approval from corporate that underwriting has just approved your borrower and you can proceed with the term sheet. Time to put...more

Contract Provision for Judicial Reference May be Enforced Even Though Provision Does Not Specifically State Right to Jury is...

California law provides that parties to a contract may agree to use alternative dispute resolution methods, such as arbitration and judicial reference, to resolve contract disputes. A recent California appellate court...more

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