Developers E&O

April 9, 2019

Lawsuits by condo associations against neighboring developers, builders are new norm

Source: https://www.miamiherald.com, April 7, 2019
By: Lindsey Thurswell Lehr and Susan C. Odess

Every South Florida construction boom brings with it a rise in defect claims by condominium associations against their buildings’ developers, builders and design professionals. The current wave of development has been no different, except that due to the proximity of new condo developments to each other, recently there has also been an increase in damage claims from associations that are neighboring construction sites.

This new litigation trend appears to have especially taken hold in South Florida, where several prominent condominium developers and contractors have been sued by adjacent associations for damages emanating from their construction sites. The lawsuits raise claims for structural damage, fallen stucco, splattered paint, excessive dirt, broken glass/windows, and other damage resulting from the construction practices of neighboring developments.

The insurer for the 1060 Brickell Condominium Towers brought a lawsuit alleging construction debris from Panorama, 1010 Brickell and the Bond damaged the two 1060 Brickell buildings. The lawsuit claims that the construction activities at these properties damaged 1060 Brickell’s facade, balconies, railings, pool deck, roof, cooling tower and other components.…

February 4, 2019

Fundamentals of Real Estate Developers’ E&O

Source: constructionexec.com, February 1, 2019
By: Joe Reynolds, RT New Day

After surging for years, the U.S. real estate marketplace may have finally peaked.

According to the most recent Emerging Trends in Real Estate® report published jointly by the Urban Land Institute (ULI) and PricewaterhouseCoopers, commercial realtors are entering a challenging environment earmarked by reduced construction demands and the prospect of an economic slowdown as forecasted by the Congressional Budget Office.

However, as some opportunities decelerate, others are beginning to emerge. This includes repurposing retail spaces into affordable housing; the expansion of alternative energy sources programs; and the ongoing urban development of brownfields and other industrial sites.

Regardless of type, each project’s benefits are also accompanied by their own set of risks. Common exposures often relate to unhappy clients and tenants, negligent or dissatisfied design and construction professionals, overly-aggressive government entities and other disgruntled third parties, businesses and investors. Under such circumstances, claims can range from the failure of HVAC units and other equipment to the negligent oversight of construction projects, civil conspiracy, zoning violations and just plain old construction defects and delays.…

January 18, 2019

Real Estate Developers (RED) E&O Claims

REAL ESTATE DEVELOPERS E&O

RED policies marry the features of professional liability insurance for design professionals, contractors and real estate development professionals into a broader
solution for the real estate industry than previously available. The following hypothetical scenarios illustrate potential situations in which a RED policy might
provide coverage.

NEGLIGENT PROPERTY MANAGEMENT

A RED policy may provide coverage for property management services provided to both owned and non-owned properties.

  • A developer/owner’s HVAC system goes down and its tenants’ businesses are disrupted. The tenants sue the developer/owner for consequential damages to their businesses, alleging that the developer/property manager was unwilling to permit recommended maintenance after heavy wear was discovered in the cooling system of a building. A RED policy may provide coverage for the tenants’ allegations.
  • At the request of a tenant, a property manager hires a flooring company to replace the carpets and hardwood floors on a stair landing. The tenant’s employee later slips on the landing and falls down the stairs. The employee sues the property manager, alleging negligent hiring and supervision of the
    flooring company. A RED policy may provide professional liability coverage for the performance of professional services as a property manager.
October 19, 2018

Builder sues over $2 billion San Francisco transit center

Source: https://apnews.com, October 27, 2018

The general contractor that managed San Francisco’s troubled $2 billion transit terminal is suing the agency in charge of the project alleging faulty design and mismanagement.

The joint venture of Webcor Builders and Obayashi Corp. filed the lawsuit Tuesday in San Francisco. It alleges design and planning mistakes sent construction soaring and led to overruns that cost the company $150 million.

The Transbay Joint Powers Authority, which operates the Salesforce Transit Center, denied the allegations in a statement Wednesday and said it would hold the contractor responsible for its commitment to deliver the project.

The contractor said it submitted 12,000 requests for information and 1,603 change order requests to officials during construction of the terminal in downtown San Francisco.

The contractor also alleged that tardy responses added to the rising costs.

The project has been mired in litigation.

In May, the engineering firm Skanska USA sued Webcor, saying the contractor’s alleged shoddy instructions led to cost overruns. In addition, the owners of a nearby high-rise apartment building that is sinking and tilting sued the agency. The owners of the Millennium Tower blame the transit center construction project for the building’s tilt.

The terminal opened in Aug. 12 after ten years of planning and construction. It closed a month later after cracks were found in two steel support beams. Agency officials said they don’t when the new terminal will be re-opened.…