Often, legislative changes won’t go into effect until the first of the year. This means that, while recovering from the holidays and New Years festivities, construction industry members must be on their toes. Failing to abide by new laws could prove costly. We regularly discuss legislative changes on the Lien Law News blog, so some of these changes have caught our eye. This may not be a full list of all the construction or even lien-related legislative changes across the country, but here are a few of the highest-profile changes we’ve discussed.
New Construction Laws Going Into Effect in 2018
Here’s a look at some of our recent posts on legislative changes set to take effect next week. Click the headlines for the full post on each topic.
Pursuant to Indiana Senate Bill 505’s passage, Indiana raised recording fees back in July. That bill also provided for online filing to begin in 2018. The full text of the Bill can be found here, but be warned – it’s a long read.
Beginning January 1, 2018, for purposes of recording: (1) an electronic document satisfies any legal requirement for an original paper document or other medium; and (2) an electronic signature satisfies a legal requirement that a document must be signed, notarized, acknowledged, or verified. Senate Bill 505 also created the electronic recording commission to adopt standards before January 1, 2018, to implement the Uniform Real Property Electronic Recording Act.
California AB 534 affects Common Interest Developments (“CIDs”). This refers to self-governing groups of common property owners, such as condominiums or apartments. When the ownership of units within one physical property are broken up, a CID will typically be present. Even some neighborhoods of detached, single-family residences may be CIDs.
Here are the changes under AB 534:
- Authorization for work is simplified – once a CID association has approved a project and hired someone to provide work, the CID’s authorization will be imputed to all owners for the purposes of supporting a potential claimant’s right to lien.
- A claimant may now send notices directly to the CID association instead of individual owners. The CID association would in turn provide notice to each individual owner within the CID.
- An owner may now bond off their portion of the lien by posting a removal bond equal to 125% of their pro-rata share of the mechanics lien. Of course, if an owner owns multiple units, the amount would multiply.
The above link in the headline provides a more general overview, but here are the Nuts and Bolts of AB1701.
AB 1701 has gotten plenty of press since it’s passage, and for good reason. Under AB 1701, a general contractor is jointly liable for the unpaid wages, fringe benefits, or other benefit payments or contributions of a subcontractor (at any tier). The goal of the legislation is to incentivize the use of responsible contractors and to secure laborer’s rights to payment.
Upon a general contractor’s request, a subcontractor, along with lower tiered subs, must provide award information, including: project name, name and address of the subcontractor, hiring party, anticipated start date, duration, estimated journeymen and apprentice hours, and contract information for their subs on the project. If that information is not provided, the direct contractor may withhold as “disputed” all sums owed if a subcontractor does not timely provide the information requested until that info is provided.
There were some other new California bills passed, too.
This post came out just 2 weeks ago, actually. After Hurricane Harvey battered Texas earlier this year, Harris County (which took much of Harvey’s brunt) enacted new building regulations to try to minimize the effect of future flooding. Here’s a quick breakdown – but remember, this only applies to the unincorporated areas of Harris County, Texas. Houston is not affected.
- For those in the floodway, new construction must be at least 3 feet above the 500-year floodplain.
- For those in the 100 year floodplain, the construction must be built 2 feet above the 500 year floodplain.
- Also, for those in the 100 year floodplain, new houses will not be able to be build slab-on-grade. Instead, the homes will have to be built on piers.
- For those in the 500 year floodplain, the first finished floor of a new construction must be at least as high as the 500 year flood level.
As mentioned earlier in this post, this is not a top-to-bottom list of every new law affecting the construction industry, nationwide. Still, the above changes are some of the most impactful and newsworthy changes. What’s more, it’s extraordinarily common for states to copycat other states when creating laws, so these changes may provide some insight into the future of your state’s construction laws.
Head over to our resources page then select your state – we’ve got a virtual library of construction payment laws and FAQs.