School’s out for the summer, and with the majority of kids and teachers spending the summer months away from campus, it’s the perfect time for school renovation projects. But as school construction heats up along with the summer temperatures, it’s a good time for construction companies to make sure that they’re doing everything they can to secure their payments, including leveraging their lien or bond rights. And when it comes lien rights management on school-based projects, finding essential information such as the project type (i.e., private-commercial, or county/state) and the project owner, can be a challenge.
Project Type – Why it Matters
Since we’re talking about school construction, it’s probably a good idea to start with a (remedial) lien rights management lesson: what are the different types of construction projects, and why does it matter?
There are 3 main types of projects:
- Public – State
- Public – Federal
Since the federal government is almost never involved with school construction projects, we can simplify this even more and state that a school construction project type is almost always either a private-commercial job or a public-state job. And why does this matter? Because private project payments are secured through lien rights management, and state project payments are secured through bond claim management. Furthermore, the requirements, documents and deadlines all vary according to the type of construction project. Pretty easy to understand so far, right? Well you better sharpen those pencils and sit up straight in your chair, because this lesson is going to get harder.
Public, Private, and Parochial Schools
But before we get to the difficult stuff, let’s dispense with the last of the easy parts. Who can tell me the project type on a public school renovation project? Anyone? Yes, you are correct – since public schools are almost always owned and operated by the state or county, any construction on a public school is almost always considered a public project type, with the project bonding requirements set on a state-by-state basis and known as each state’s “Little Miller Act.”
Private school construction projects are typically just as easy to classify – a private school project is almost always going to be a private-commercial project type. And since a private construction job almost always takes place on a piece of privately-owned property, you’re going to need to know the property owner in order to manage your lien rights on just about any private school project.
But what about parochial schools? While the distinctions for religion-based schools can be a little blurrier than true public or private schools, parochial schools, like churches and other houses of worship, are almost always private, commercial projects.
And Now for the Hard Part of Today’s Lesson – Charter Schools
And that boys and girls is where the easy part ends because determining the job type for a construction project on a charter school can be a huge challenge. Education can be a controversial, politically-charged subject, and one of the more controversial aspects of educational policy is the emerging trend of charter schools. In certain parts of the country, including Levelset’s hometown of New Orleans, Charter schools are fairly common in certain parts of the country. (In New Orleans, 93% of the city’s 48,000 public school students are in charter schools, a drastic change that was exacerbated by Hurricane Katrina. This is the largest percentage of charter school utilization in the country, by far).
Setting aside the controversy with charter schools, let’s consider all of the ways that charter schools exist and operate, and how that might impact a construction company’s ability to secure their payments.
A charter school can operate:
- In a building owned by the city or state
- In a building on land owned by a church or other house of worship
- In a building owned by a private university
- In a building owned by a public university
- In a privately owned building
- On a military base
- On Tribal land
- In a planned community with an HOA
… along with a few more scenarios not listed here.
Bottom line? If the school construction project that you’re working on is a traditional private school or public school, then your lien/bond rights management requirements are probably pretty straightforward. The same is true for parochial schools – as stated above, a construction project on a religious-based school is almost always going to be classified as private – commercial.
But if the project you’re working on is for a charter school, then extra caution must be taken to find out who the hiring party is, the project type, and how both of those things affect your rights to get paid.
And no matter what type of school construction project your company ends up, it’s essential for you to get all of the important job information at the beginning of the job, before breaking ground. That way, if any payment issues come up down the line, you’ll be in a much better position to defend your rights.
And now in the immortal words of Van Halen from their seminal album, 1984, “Class Dismissed!”