February 18, 2008

EDITOR'S NOTES

When homeowners move into a newly constructed home, the home usually comes with a warranty that gives the owners a certain amount of time to submit warranty correction items—structural settling, HVAC issues, appliance malfunctions, etc. A developer in one California community required homeowners to sign the closing documents, which included mention of the warranty clause, but did not provide a copy of the actual warranty until several weeks later. The booklet contained several questionable items, including an arbitration clause that greatly favored the developer. When warranty problems arose and the developer tried to compel arbitration per the warranty clause, two courts determined that the clause was one-sided and therefore unenforceable.

Paperwork is the bane of any manager. Many managers complain that there is usually too much of it and not enough time in the day to complete it. Despite the drudgery, however, it has its purpose. For example, if change orders are requested and approved, an owner needs to complete the necessary paperwork to fulfill the contract requirements. Otherwise, he may find himself in breach of contract, as one owner discovered.

Liability for professional services is an area of construction that causes confusion and dissent among the various state and federal courts. An Arizona court is the latest to tackle this issue.

Finally, don't miss the Construction Law Conference in London on March 5th and 6th. Construction Claims subscribers receive a 10% discount. Links to the brochure and the discount coupon are available at www.constructionclaims.com.

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