Arbitration is an increasingly popular form of dispute resolution in the construction sector, and many standard contracts these days require its use in lieu of litigation. However, last November, the American Arbitration Association (AAA) and the International Centre for Dispute Resolution enacted the Optional Appellate Arbitration Rules, which now permit parties to obtain appellate review of arbitration awards. Simply put, these new rules remove the finality aspect of arbitration, which is what makes the process so appealing.

An arbitration award can typically only be set aside under extremely narrow circumstances involving corruption, fraud or misconduct or where the arbitrators exceeded their powers. But now, under the new rules, review of arbitration awards is permitted by an AAA appellate panel in situations involving alleged “material and prejudicial” errors of law and/or “clearly erroneous” determinations of fact. In other words, the door swings open wider when it comes to questioning the outcome of the arbitration. 

What happens when a new generation of workers collides with an antiquated existing office inventory? A new office development cycle is born, triggering extensive opportunities for the construction and design communities. 

Driven by demand from the  technology, advertising, media and information technology (TAMI) sector, companies are seeking modern workplaces aimed to target and attract young millennial talent and reinforce their brand, culture, productivity and morale. This proves challenging when much of the existing office inventory was designed for another generation of users whose different work habits and priorities shaped the design features of the traditional office space. To meet the needs of the growing segment of TAMI tenants, renovations to older buildings are skyrocketing, generating a surge of new construction projects and a need for creative design, modernized building systems and cutting-edge technology upgrades. To seize on the increased design and construction opportunities resulting from this growing need to update commercial office space, it is important to understand both the existing market and the needs of the new tenants driving these projects.

Modular construction – the assembly of prefabricated modules into a final structure – has been in use the U.S. since at least the early 1900s. Lately, however, the interest in going modular has increased due to pressure on the construction market to produce structures faster and cheaper. The potential advantages of modular construction include increased quality control, shortened schedule, labor savings, material cost savings and improved site safety. However,  modular construction also presents unique legal and regulatory issues.

Which Codes Apply?

First and foremost, applicable construction and safety codes must be considered. Some state agencies have long accounted for modular builds. For example, Florida adopted the Manufactured Building Act in 1979, which describes inspection criteria to be implemented at the manufacturing stage. In contrast, the New York City construction code does not include a specific section on modular construction. Instead, the New York City Department of Buildings (DOB) has established temporary guidelines that interpret the existing code for application to modular construction. Owners and builders should be aware of potential uncertainties in the application of code provisions to modular work and should contract around potential delays and other impacts that may result. The same applies to safety codes. For example, if building modules requires work in “confined spaces” as defined under Occupational Safety and Health Administration (OSHA) regulations, employers must comply with the appropriate permitting procedures and establish training programs and facilities to control potential hazards. 

The construction world is just starting to explore the commercial use of drones – or unmanned aerial vehicles (UAVs). These are smaller aircraft that are often controlled by an operator on the ground and can stay aloft for many hours. Previously, UAVs were used to enhance public safety, support agriculture, help the environment, monitor the climate and mitigate disasters. 

As drone use continues to evolve, the Federal Aviation Administration (FAA) has allocated $63.4 billion for the modernization of the country’s air traffic control systems, as well as an expansion of airspace. Additionally, The FAA forecasts that the number of commercial drones could reach 7,500, and other reports estimate the number could be as high as 20,000 by 2020.

Managing supply chains in the construction industry can be very challenging. Roadblocks have a tendency to develop throughout the chain, which leads to higher project costs, wasted materials and a lower quality of the completed structure. But these pain points can be avoided by making certain choices in logistical planning.

Responsible sourcing is continually becoming more achievable, thanks to new sustainable materials and technologies. This focus not only improves the building process, but also the overall end product. From choosing building materials sourced in innovative ways to reducing carbon in the transport of those materials, there are many facets of supply chains that can be improved.

Nothing in real estate development creates more confusion or poses the potential for more future problems than the decision of when to terminate a single purpose entity (“SPE”) used with the development of a residential project. Although terminating an SPE should be straightforward, the decision of when to terminate is more complex than one may think. 

Consider the following scenario. A developer creates a residential development SPE, which is nothing more than a limited liability company (“LLC”) formed solely to purchase, construct and sell a real estate property project. After much hard work, the SPE completes its project at a substantial profit and the developer now desires to terminate the SPE. The investors in the project have a separate desire to receive (and keep) their shares of the profit. Both the developer and the investors want to ensure that following the termination of the SPE: creditors cannot cause the investors to return their distribution of the profits; expensive insurance policies and contractor/subcontractor/design professional warranties remain in place; and any entity that undertakes the post-termination obligations of the SPE will not be held to be the “successor” to the SPE. So how is this accomplished? 

Schedules are of the utmost importance to keeping projects on track. Everything must be properly documented so that all moving parts and parties are accounted for, and when deadlines or plans change, schedules should reflect these updates instantaneously. 

Construction project planners should know the details of the schedule inside-out. Most can look at a Gantt chart and easily recognize the relationships between tasks, durations assigned and resources committed, recognizing critical paths and how things are performing, whether they are running behind schedule, on schedule or are at risk for delay.

Unfortunately, few others on the team are able to decipher the Gantt symbols and graphs that planners rely so heavily on. Therefore, as soon as the schedule is designed, astute planners practice the art of relaying vital schedule information to their team members. 

Much is at risk in a large construction project. Huge sums of money, time and effort are invested before the first shovel hits the dirt. Ceremonial groundbreaking gives way to critical timelines and a dangerous mix of rumbling trucks, heavy equipment and busy workers. Traditionally, to help manage and finance the risk of loss, owner and contractor were expected to provide their own insurance. All contractors, each with their own insurance carrier in tow, were expected to answer for any loss. Complicated disputes and resultant insurance coverage litigation became as much a legacy of construction industry activity as the high rises, tract homes and condominiums built.

There had to be a better way. With that impetus, the notion of one all-encompassing insurance plan, known as wrap-up insurance, was developed.  

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