Category: Construction Law

Florida Law Requires Inspections in Wake of Surfside Collapse

Posted on | by Brian Zimmerman

Brian R. Zimmerman – Hurtado Zimmerman, SC and Rowan Mason – Ralls Gruber & Niece  wrote and published the following article in the, the American Bar Association,  The Construction Lawyer | Volume 42, No. 2 (February 2023) 

 

Florida Enacts Law Requiring Structural Inspections of Condominiums in Wake of Surfside Collapse

Milestone Inspections

The law creates Section 553.899, under which all condominium associations[i] and cooperative associations[ii] (together “Association(s)”) are required to obtain a “milestone inspection” after 30 years, and then every 10 years thereafter, if the building is three or more stories in height.[iii] If the building is located within 3 miles of a coastline, the inspection must be after 25 years, and then every 10 years thereafter.[iv]

The milestone inspection must be completed by December 31 of the year in which the building reaches 30 years of age.[v] If the Association building is already older than 30 years, the milestone inspection must be completed before December 31, 2024.[vi]

Once a building reaches the age requiring a milestone inspection, the local enforcement agency must provide written notice to the Association, by certified mail.[vii] The Association must complete the “phase one of the milestone inspection” within 180 days of the notice from the local enforcement agency.[viii] Notwithstanding the notice requirement, the Association is responsible for arranging the inspection, ensuring compliance, and all costs of the inspection.[ix] 

A “milestone inspection” is defined as a structural inspection of a building, including an inspection of load-bearing walls and the primary structural members and primary structural systems, by a licensed architect or engineer authorized to practice in the state, to determine whether the condition of the building is in compliance with the Florida Building Code or fire safety code.[x]  The purpose of such inspection is to attest to the life safety and adequacy of the structural components of the building and to the extent reasonably possible, determine the general structural condition of the building as it affects the safety of such building.  If necessary, a determination is to be made of any necessary maintenance, repair, or replacement of any structural component of the building.

There are two phases to the milestone inspection: Phase One and Phase Two.

For a Phase One milestone inspection, the architect/engineer must perform a visual examination of habitable and uninhabitable areas of a building, including the major structural components of a building, and provide a qualitative assessment of the structural conditions of the building.[xi]  If the architect/engineer finds no signs of substantial structural deterioration to the building components upon visual examination, a Phase Two examination is not required.[xii]

A Phase Two inspection must be performed if any substantial structural deterioration is identified in the Phase One inspection.[xiii] A Phase Two inspection may be as extensive or limited as necessary to fully assess areas of structural distress in order to confirm the building is structurally sound and safe for its use, and to recommend a program for assessing and repairing distressed or damaged portions of the building.[xiv] A Phase Two inspection may involve destructive or nondestructive testing, at the inspector’s discretion.

All repairs as required under the Phase Two inspection must be commenced within 365 days after issuance of the report.[xv] If repairs are not commenced, the local enforcement agency may review and determine if the building is unsafe for human occupancy.[xvi] The local county commissioner may adopt an ordinance requiring a specific time to commence repairs.[xvii]

The Phase One and Phase Two inspection reports must be submitted with a sealed copy with a separate summary of the material findings and recommendations to the Association and to the building official of the local enforcement agency.[xviii] The report must include the following:

  1. Seal and signature of licensed architect or engineer who performed the inspection
  2. Indicate the manner and type of inspection
  3. Identify any substantial structural deterioration within a reasonable professional probability based on the scope of the inspection and describe the extent of any deterioration or recommended repairs.
  4. State whether unsafe or dangerous conditions exist under the Florida Building Code.
  5. Recommend any remedial or preventative repair for items that are damaged but do not meet the definition of substantial structural deterioration.
  6. Identify items requiring further inspection

The Association must distribute a copy of the reports to each unit owner, regardless of the findings or recommendation, must post in a conspicuous place on the property, and post on the Association’s website, if required.[xix]

Structural Integrity Reserve Study:

In addition to the inspection requirements, the law further requires that Associations complete a “structural integrity reserve study” by December 31, 2024, and then at least every 10 years thereafter for every building three stories or more.[xx]  The structural integrity reserve study is required to identify the common areas being visually inspected,  The structural integrity reserve study must at a minimum include: Roof, load bearing walls, floor, foundation, fireproofing, fire protection systems, plumbing, electrical systems, waterproofing, exterior painting, windows, and any other items that has a deferred maintenance expense or replacement cost that exceeds $10,000 and the failure of such item would negatively impact the other listed items.[xxi]

The structural integrity reserve study must state the estimated remaining useful life and the estimated replacement cost or deferred maintenance expense of the common areas and provide a recommended annual reserve amount that achieves the estimated replacement cost or deferred maintenance expense of each common area being visually inspected by the end of the estimated useful life of each common area.[xxii]

Structural reserve studies must be maintained for at least 15 years after the study is completed and are open to inspection by Association members at all reasonable times and available through the Association’s website.[xxiii]

As of December 31, 2024, an Association must provide for reserves for the amount estimated based upon the estimated useful life and replacement or deferred maintenance costs of items identified in the structural integrity reserve study.[xxiv]

An Association is not permitted to decline to reserve or under reserve any such amounts.[xxv] Also effective December 31, 2024, Associations may not vote to use reserve funds, or interest thereon, that are reserved for items identified in the structural integrity reserve study.[xxvi]

An Association’s failure to complete the structural integrity reserve study or willful and knowing failure to have a milestone inspection performed, constitutes a breach of an officer’s and director’s fiduciary relationship to the unit owners.[xxvii]

[i] As defined in Chap. 718 Fla. Stat.

[ii] As defined in Chap. 719 Fla. Stat.

[iii] Fla. SB 4-D (2022); §553.899(3), Fla. Stat.   

[iv] Id.

[v] Id.

[vi] Id.; §553.899(4), Fla. Stat.     

[vii] Id.; §553.899(5), Fla. Stat 

[viii] Id.; §553.899(6), Fla. Stat.

[ix] Id.; §553.899(3), Fla. Stat.

[x] Id.; §553.899(2)(a), Fla. Stat.

[xi] Id.; §553.899(7)(a), Fla. Stat.

[xii] Id.

[xiii]  Id.

[xiv] Id.

[xv]Id.; §553.899(11), Fla. Stat.

[xvi] Id.

[xvii] Id.

[xviii] Id.; §553.899(8), Fla. Stat.

[xix] Id.; §553.899(9), Fla. Stat.

[xx] Id.; §719.106(1)(k), Fla. Stat.

[xxi] Id.; §718.103(g)(1.), Fla. Stat.

[xxii] Id.; §718.103(25), Fla. Stat.

[xxiii] Id.; §718.111(12)(a)(15), Fla. Stat

[xxiv] Id.; §719.106(1)(j), Fla. Stat

[xxv] Id.; §719.112(2)(f)(2.a.), Fla. Stat.

[xxvi] Id.; §719.112(2)(f)(3), Fla. Stat.

[xxvii] Id.; §718.112(2)(h), Fla. Stat

Brian Zimmerman to Co-Chair ABA Construction Forum Fall Meeting

Posted on | by Brian Zimmerman

 

Brian R. Zimmerman – Hurtado Zimmerman, SC, and Catherine W. Delorey (grsm.com), of Gordon Rees, will Co-Chair the American Bar Association- Forum on Construction Law’s National Fall Meeting. 2023 Fall Meeting (americanbar.org).  The program will be September 27-29, 2023 in Washington DC.

Join us at the ABA Forum on Construction Law’s 2023 Fall Meeting – Navigating Government Construction: Don’t Make a Federal Case Out of It.

 The program, appropriately set in our Nation’s Capital, offers a journey into the world of government construction. There is no better place than Washington, D.C. to learn to navigate the minefield of requirements applicable to your clients who may be literally trying to drain a swamp. This is a must attend event for all construction/government contracts lawyers, consultants, and those who would like to venture into or learn more about the practice area.

The Program promises to engage both new and seasoned attorneys alike, with plenary sessions and workshops covering both introductory and advanced topics related to government construction. Our sessions are loaded with esteemed judges, sharp in-house counsel, experienced government lawyers, and skilled private practitioners, all with particular knowledge to impart to attendees. Session topics include: Navigating the government claims process and procedures; Delay, disruption, and pricing of claims on federal projects F Green and sustainable government spending; Cybersecurity threats and obligations of government contractors; Termination on government projects; ADR with the government Prior to the main program, we will offer a practicum: “A Guide to Bid Protests.”

At the practicum, our faculty, including Judge Marian Blank Horn, will take a federal bid protest from start to finish and share insight on the process for federal bid protest. In addition, renowned speaker, Bob Kendrick, President of the Negro Leagues Baseball Museum in Kansas City, Missouri, and host of the Black Diamonds Podcast , will speak as a part of the Forum’s Diversity Breakfast series.

Mr. Kendrick is a dynamic and engaging speaker and the leading authority on the topic of the Negro Leagues baseball history and its connection to issues relating to sports, race, and diversity. Washington, D.C. in the Fall promises beautiful weather and a welcoming city with countless memorials, museums, and monuments to explore. Please check out our D.C. Insider’s Guide and Restaurant Guides courtesy of Forum Chair, John Marshall Cook. There is so much to do, you will need an extra day or two!

 

Lots to Think About: Contracting in Response to How Global Events Affect Construction (March 2022)

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Global events have presented an ever shifting set of obstacles for the construction industry. Early on in the COVID-19 pandemic, actual and expected shutdowns created severe uncertainties in the industry. Later, governmental requirements on both public and private projects posed challenges. Beyond the direct impacts of illness from COVID-19, lagging disruptions in the availability of materials and equipment have severely impacted the industry. A string of other adverse events have also contributed to increased prices or reduced availability of materials, including the global micro-chip shortage, import/export tariffs, Texas power grid disruptions, and now the war in Ukraine. Lumber prices may have peaked and are now subsiding, but the war in Ukraine and other events have caused spikes in other commodities, including oil and gas prices. These industry disruptions have plagued progress and pose substantial risks of delays and cost overruns. In response, construction companies need to ensure that they contract to anticipate certain risks.

Material Price Increases

The timing of bidding, ordering, contracting, and delivery of materials are all critical considerations in the evaluation of material price increases on a construction project. Without express contract language excusing performance or permitting a cost increased, Wisconsin law generally does not entitle a party to additional cost or time due to material price increases, even when prices change.

A variety of price escalation clauses can be utilized to transfer risk between parties, which generally include the following forms:

  • Any Increase/Day-One. A clause allowing for any increase allows a contractor to increase its price during the project or after a set date. Because these clauses are open ended, they expose the upstream party to all risks of price increases for all materials, or specific materials if designated. As a result, these clauses function similar to allowances, although potentially not permitting the upstream party the benefit of price decreases.
  • Threshold. A threshold clause sets a specified threshold over which the contractor is entitled to a price increase. With this structure, the contractor will share the risk up to the threshold and the owner (or other upstream party) will bear the risks in excess of that threshold. Parties can also negotiate a cap to the owner’s high-end risk at a higher threshold.
  • Delay price escalation clauses set the triggering milestone at a date within which the contractor has locked prices. The clause allows the contractor to increase its price if the project or portion thereof is delayed beyond a milestone date.

Price escalation clauses are often negotiated to be a combination the three types. For example, a contractor may be entitled to a price increase beyond a certain threshold, provided the project is subject to delay beyond a set milestone date when prices may be readjusted. In addition, the amount of increase to the contract price may be adjusted for the actual costs incurred or to mirror the pro-rata changes in industry material price indexes such as the producer price index.

Delays

Early on in the pandemic, as construction project delays, cancelations, and shut-downs, resulting from COVID-19 first were becoming known, parties turned to the general language of force majeure or “act of God” contract clauses, often invoking “governmental orders” or the catch-all “unavoidable casualties or other causes beyond the Contractor’s control” as the basis for excuse from performance  As the pandemic has continued, the global effects have become more publicized and understood, and governmental shutdowns have largely ceased. In turn, parties have become increasingly limited in their willingness to excuse delays or pay increased costs due from COVID-19.  The result is increased potential for claims and conflict.

Construction companies should proceed cautiously because generic force majeure clause on their own, may not excuse performance related to pandemic or supply chain disruptions, particularly as they may be known at the time of contracting. Generally, for force majeure to apply the non-performance must be “caused by circumstances beyond the reasonable control of the [invoking party] or by an event which is unforeseeable at the time the parties entered into the contract.” Goldstein v. Lindner, 2002 WI App 122, ¶31, 254 Wis. 2d 673, 687, 648 N.W. 2d 892.

Considering information currently available about the means of symptoms, transmission, testing, treatments, and vaccinations, in addition to the material unavailability and price increase issues discussed above, it may be increasingly challenging to demonstrate that delays due to an infected work force are unforeseeable or constitute force majeure.

As a result, a party seeking to excuse performance may need to show specifically how the circumstances of the delay were unforeseeable. 

Conclusion

As the last few years have demonstrated, numerous potential and novel obstacles could affect the success of a construction project. Contractors should work with their counsel to craft contract clauses tailored to each specific project and designed to anticipate risks that may arise during the course of construction.

By: Attorneys Brian R. Zimmerman and Bryan T. Kroes

 

The information contained on this website is provided for informational purposes only, and should not be construed as legal or tax advice on any subject matter. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client relationship between the reader, user, or browser and website authors. You should not act or refrain from acting on the basis of any content included on this website without retaining an attorney.

Construction and Copyright, Part 2: Practical Considerations

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Construction attorneys need to be familiar with intellectual property principles and copyright matters associated with their client’s businesses. In part 2 of this two-part series, Bryan Kroes discusses additional practical copyright considerations, including trademarks and patents.

In Part 1, we discussed copyright basics and architectural plans as one asset that could be protected by copyright. See Construction and Copyright, Part 1: Don’t Forget about IP.

Here in Part 2, we discuss additional practical copyright considerations, including that designs and architectural works aren’t the only copyrightable material to come out of the construction process.

Photos and Videos

Many construction companies want to promote their business using “before and after” or progress photographs of their work. If the construction company hires a third-party photographer or videographer to photo-document the construction site, absent an understanding to the contrary, the photographer owns the photos or video, not the construction company.

In these situations, a contract should be developed identifying the construction company’s right to use the photographs and the rights that are conveyed and retained by the photographer or videographer.

In the construction contract with the owner, the construction company should also identify whether it has a right to use pictorial depictions of the owner’s property, and to what extent it can use those works.

Marketing Materials

Going hand and hand with photographs and videos are a construction company’s marketing materials.

If a construction company creates its own marketing materials – whether website content, pamphlets, presentations, sales sheets, or literature – all may be afforded copyright protection.

Although notice via a copyright symbol (©) is no longer required under U.S. copyright law, it is never a bad idea to label all copyrightable marketing materials with the copyright symbol, to put the public on notice as to the company’s ownership of the copyrighted works.

If a company utilizes its in-house staff to create its copyrightable works, whether designs, marketing materials, websites, presentations, contracts, templates, or company-specific literature, the company should establish either via employee handbook or separate agreement whether the works are works made for hire and as such, owned by the company or the individual author.

Using Outside Copyrighted Material

While a good deal of original content may be created for marketing purposes, companies should be careful to not use any elements in their marketing materials that are owned by someone else.

A common misperception is that if a photo, video or song is found online, then it is fair game to put it in your marketing materials or on your website. On the contrary, just because you found a nice photograph or song online that fits your marketing or presentation aesthetic, does not mean you can use it without permission from the owner. You will have to either obtain a license or find an alternate work to use.

Finding the perfect licensable photo, video, or music for your marketing materials is actually a lot easier than you may think. In fact, Wisconsin is an underrated hotbed of creativity, and there are many wonderfully talented artists, photographers, videographers, and musicians who would love to discuss using their services for your marketing materials.

Other Copyrightable Materials

Copyright protection can also extend to other items a construction company uses in its day-to-day business – including contracts, proprietary documents, and certain forms so long as there is a de minimis expression of originality. If you create an original use or arrangement of words, then there is no reason you cannot claim a copyright in that particular arrangement. In fact, many of the construction contract suites (i.e., AIA and ConsensusDocs®) claim copyright in their contracts.

While many companies use existing project management or accounting computer programs, or software such as ProCore® or QuickBooks®, occasionally, a construction or design company may have an in-house staff person who develops a new computer program or software to aid in project management or accounting.

In such cases, copyright protection for that new program or software – to the extent it is original and does not infringe on another copyright – can and should be explored. A word of warning, however: if the new program or software incorporates or interfaces with elements of another existing program or software to improve functionality, then that new program or software may actually be infringing.

What Cannot Be Copyrighted

While there are many things that can be given copyright protection, a few things cannot:

  • ideas – the expression of an idea can achieve copyright protection, but the idea itself cannot;
  • website domain names;
  • facts and commonly known information, including historical facts;
  • functional aspects of a work. For example, if an aesthetic design has been dictated by functional concerns, that design may not achieve copyright protection;
  • works of the U.S. government; and
  • blanks and forms that do not contain a degree of creativity or original expression.

This list is not exhaustive, but merely representative.

Trademark (Not Copyright)

Another misconception is that you can copyright a business name, title, slogan, or logo. Trademark, not copyright law, affords protection for those items.

Like copyrights, trademarks are a federally protected intellectual property right. The Lanham Act1 defines federal trademark protection and trademark registration rules, in addition to granting the United States Patent and Trademark Office (USPTO) administrative authority over trademark registration.

Trademarks – along with their closely-related cousins, service marks, and trade dress – include any word, name, symbol, device (including even sounds and scents), or any combination thereof, used to or intended to identify and distinguish the goods or services of one seller or provider from those of others, and to indicate the source of goods or services.

Simply put, a trademark is a brand name. Generally, a person or entity obtains trademark rights and ownership via continued use – registration makes a public record that a mark is being used. To obtain a federal trademark registration, the registrant must show use of that source designator in interstate commerce.

Wisconsin also has its own state-specific trademark registration, codified in Wis. Stat. chapter 132.

Patent or Trade Secrets (Not Copyright)

Copyright law also does not cover methods or systems of operation – for those, look to patent or trade secret law.

United States patent law is codified in Title 35 of the U.S. Code, and is authorized by the U.S. Constitution, Article One, Section 8, clause 8. The United States Patent and Trademark Office (USPTO) holds administrative authority over granting patents.

Any person who invents or discovers a new or useful process, the machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent after a successful patent prosecution.

Wisconsin’s Uniform Trade Secret Act, located in Wis. Stat. section 134.90, is meant to provide rights and remedies for espionage, theft, bribery, misrepresentation, and breach or inducement of a breach of a duty to maintain secrecy over information, including a formula, pattern, compilation, program, device, method, technique, or process.

Conclusion: Something to Keep in Mind

Copyrights and other intellectual property may not be the first thing to come to mind in the context of construction law, but they certainly are important to ensure a well-rounded and complete set of legal services.

This article was originally published on the State Bar of Wisconsin’s Construction and Public Contract Law Section Blog. Visit the State Bar sections or the Construction and Public Contract Law Section web pages to learn more about the benefits of section membership.

Endnote

1 15 U.S.C. §1051, et seq.

 

The information contained on this website is provided for informational purposes only, and should not be construed as legal or tax advice on any subject matter. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client relationship between the reader, user, or browser and website authors. You should not act or refrain from acting on the basis of any content included on this website without retaining an attorney.

Construction & Copyright, Part 1: Don’t Forget About Intellectual Property

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Construction attorneys should be familiar with intellectual property principles and copyright matters associated with their clients’ businesses. In part 1 of this two-part series, Bryan Kroes provides an introduction to copyright and how it intersects with construction projects.

Construction projects, by their very nature, operate in the world of tangible property. Quite obviously, tradespersons use machinery and tools to fit building materials together to construct physical buildings.

With material goods acting as both the figurative and literal foundation of the industry, construction companies, and by extension, their construction contracts, could easily focus solely on the tangible elements of each project.

While the tangible property is absolutely essential for a successful construction project, construction companies should not overlook the equally important world of intangible intellectual property. Intangible property rights not only comprise the basis of a commercially successful construction company but are also critical in providing ongoing revenue streams.

Construction attorneys similarly should acquaint themselves with intellectual property principles pertaining to their client’s business and be prepared to advise or refer those clients accordingly.

There are four general categories of intellectual property: copyrights, trademarks, patents, and trade secrets. An exhaustive survey of each category would far outweigh the scope of this article, so I will focus solely on copyrights.

Copyright Law – an Introduction

United States copyright law is contained in Title 17 of the United States Code, with protection being afforded to original works of authorship fixed in any tangible medium of expression, now known or later developed, either directly or with the aid of a machine or device.1

Works of authorship include the following categories:

• literary works;
• musical works, including any accompanying words;
• dramatic works, including any accompanying music;
• pantomimes and choreographic works;
• pictorial, graphic, and sculptural works;
• motion pictures and audiovisual works;
• sound recordings; and
• architectural works.

Copyright in a work protected under copyright law vests initially in the author or authors of the work.2 Works can also be considered “works made for hire” in which case, the employer or other person for whom the work was prepared is considered the author for purposes of copyright law, and, unless the parties have expressly agreed otherwise in a written instrument, that person or entity for whom the work was created owns all of the rights in the copyright.3

The owner of a copyright has the exclusive rights to do and authorize any of the following:

• reproduce the copyrighted work in copies;
• prepare derivative works based on the copyrighted work;
• distribute copies of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
• in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;
• in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and
• in the case of sound recordings, to perform the copyrighted work publicly by means of digital audio transmission.

The author of the work (whether the person who created it or the person for whom it was created, in the case of a work made for hire) does not have to register the work with the U.S. Copyright Office in order to have copyright ownership right.

Instead, copyright vests in the author the moment the work is fixed in a tangible format, and, for works created after Jan. 1, 1978, last for the life of the author plus 70 years.4 In the case of joint works prepared by two or more persons, the copyright lasts for the life of the last surviving author, plus 70 years.5 For works made for hire, copyright protection lasts for 95 years from the year of its first publication, or 120 years from the year of its creation, whichever expires first.6

Benefits of Copyright Registration

Although the owner or author is not required to register a work, registration with the U.S. Copyright Office does have its significant benefits.
First, registration means prima facie evidence of the validity of the copyright.7 Registration also gives the owner of the copyright the ability to bring a civil action for infringement, and the owner could be awarded statutory damages of $750 to $30,000 per infringing work, together with attorneys’ fees and costs.8

As actual damages can be difficult to prove, and litigation can be long and complex, the ability to collect those statutory damages, costs, and attorneys’ fees are a significant reason to register a copyright. With the passing of the Copyright Alternative in Small-Claims Enforcement (CASE) Act in late 2020, a small claims procedure is now established that, once up and running, may provide an affordable remedy to copyright owners for infringement.

Application to the Construction Industry

Because so much of copyright law applies to the creative arts, it is easy to see why some may not immediately recognize application to the construction industry. However, the opportunities are many.
Perhaps the most obvious application is that “architectural works” are called out specifically in copyright law as a protectable class. An “architectural work” is defined as the “design of a building as embodied in any tangible medium of expression, including building, architectural plans, or drawings.”9 This includes the overall form, as well as the arrangement and composition of spaces and elements in the design, but does not include individual standard features.

Regardless of a company’s business model, there is great value in protecting any architectural work. For example, a design professional creating a unique architectural work should protect their plans to preserve rights and remedies if an infringing work emerges elsewhere. Certain companies with a portfolio of architectural works (for example, subdivision homebuilders) also may want to protect their architectural works as a company asset. Since the duration of copyright protection lasts for many years, the owner of an architectural work can both protect and exploit their work to their own financial gain and stability well after initial creation.

Considerations for Copyright Provisions in Construction and Design Contracts

Construction and design contracts should include copyright provisions by clearly identifying who owns the design and what types of uses are permitted.
Although an end-user may sanction and pay for architectural work, they may not be the owner of the design – a fact that could create quite a bit of misunderstanding or lead to a dispute if not addressed at the initial contracting stage.

If a work is going to be work made for hire, then that needs to be unequivocally stated. If the designer is going to retain the copyright ownership in the work, however, there is nothing stopping them from using that same design or elements thereof later on in a similar design, subject to scenes a faire (standard element) restrictions.

As such, if an owner has sanctioned a highly unique building where the design professional retains copyright ownership, the owner needs to address whether or not the same design can be reused again, if there is a geographical restriction on such use, and if there will be consideration for such restriction. If the design professional grants a license to another person to use the architectural work, any limitations on that license should also be clearly stated in the contract.

Due to the exclusive rights afforded to copyright owners, if a particular design is going to have any building life-cycle use, these additional uses need to be addressed at the initial contracting stage.

For example, if someone other than the copyright owner will create as-built drawings or utilize the drawings for operations and maintenance purposes, derivative work issues could potentially arise, if not addressed in the contract.

Building Information Modeling and Copyright Considerations

Building Information Modeling (BIM) presents its own unique challenges when it comes to copyright.

In fact, ConsensusDocs has created a Building Information Modeling Addendum (ConsensusDocs® 301) to accompany its suite of construction contracts. The default language in the addendum contemplates that each contributor grants to the owner and the other contributors limited, nonexclusive licenses to reproduce, distribute, display, make derivative works of, and otherwise use certain model elements for that particular project only. However, that language can be negotiated and modified to expand or limit rights.

BIM, by its very nature, includes multiple people contributing to what is intended to be a unified end result. As such, considerations of whether the resulting model will or will not be considered a joint work need to be addressed. Similarly, risk allocation among the various model contributors must be addressed.

Read more in Part 2

Endnotes

1 17 U.S.C. §102(a)

2 17 U.S.C. §201(a)

3 17 U.S.C. §201(b)

4 17 U.S.C. §302(a)

5 17 U.S.C. §302(b)

6 17 U.S.C. §302(c)

7 17 U.S.C. §410(c)

8 17 U.S.C. §§ 504-505.

9 17 U.S.C. §101

 

The information contained on this website is provided for informational purposes only, and should not be construed as legal or tax advice on any subject matter. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client relationship between the reader, user, or browser and website authors. You should not act or refrain from acting on the basis of any content included on this website without retaining an attorney.

3D Printing in Construction: The Intersection Between Law and Innovation

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With the recent move of 3D construction printing out of the research labs and onto construction jobsites, there is a disconnect between the available technology and construction law. Bryan Kroes discusses the future of 3D printing and construction law.

Bryan T. Kroes, Hurtado Zimmerman SC – Wauwatosa, Wisconsin

3D printing is sometimes referred to as additive manufacturing, because of the ability to create three-dimensional solid objects by layering materials on top of one another.

While 3D printing was once futuristic technology, it is now commonplace throughout a variety of industries. Because 3D printers can print any shape that can be imagined, the applications are almost limitless.

Many toys, models, and knick-knacks can be simply designed and quickly mass produced.1 The automotive industry has started using 3D printing for certain vehicle parts and even entire cars, starting with “Strati,” the first 3D printed electric car printed in 2014. The health care industry has been using 3D printed medical devices and implants that can be custom-made for a patient’s specific physiology.2 In fashion, Adidas is currently marketing a shoe with a 3D printed sole and Nike markets a shoe with a 3D printed textile upper. Average consumers can even purchase a simple desktop 3D printer for personal use starting as low as $250.

The construction industry is no exception, and one where 3D printing innovations are advancing at a rapid rate. A number of companies around the globe have been experimenting with 3D printed building components such as bricks, structural components, and even full structures.

Even NASA has experimented with building 3D printed habitats on Mars.

 

Constructing with 3D Printing

In 2018, two companies named ICON and New Story joined forces to claim the title of the first companies in America to secure a building permit and build a 3D printed home. Located in Austin, Texas, the 350 square foot home was printed using a single Vulcan I 3D printer, in approximately 48 hours at a cost of $10,000.

The structure was printed using a proprietary concrete-like material, however, the roof, windows, doors, electrical wiring, and plumbing were not. After the success of the first home, ICON released its Vulcan II printer, which it says can produce homes measuring up to 2,000 square feet in size, or multiple homes in the same time it took the Vulcan I printer. The companies have reportedly started to print a community of homes to an underserved population, with each home running from 600 to 800 square feet with a targeted cost of approximately $4,000 per home.

In early 2019, Sunconomy LLC of Austin, Texas, announced WePrintHouses, an all-in-one 3D printed home technology system that will be licensed by select builders across the U.S. The company boasts that it is the first 3D home printing system that is able to readily obtain permits and meet U.S. building codes.

WePrintHouses’ printing system is comprised of a movable platform containing a proprietary printer head that prints entire houses with a “hydrophobic, self-binding, geopolymer cement,” which tends to operate more like an inkjet printer. The geopolymer cement is claimed to be sturdier and less environmentally harmful than concrete made with Portland cement. This allows for reinforcing bars to be designed into the floors, walls and roof systems to meet building codes. The company says that its system eliminates the need for masons, drywall installers, roofers, carpenters, and other trades, which results in not only quicker overall build time, but also elimination of labor shortages and materials waste. According to the company, the walls are designed and tested to withstand “fire, hurricane and tornadic force winds, 8.0+ earthquakes, hail and flooding.”3

In October 2019, Apis Cor announced that it completed the largest 3D-printed building in the world in Dubai. The two-story administrative office building stands 31 feet tall, has an area of 6,889 square feet, and had its walls printed using only one printer in 21 days. The insulation, roof, foundation and windows were installed using traditional construction methods. This build comes on the heels of the “Dubai 3D Printing Strategy” mandate that by 2025, every new building will be 25% 3D printed.

Arizona-based Armatron Systems in December 2019 announced that it secured a patent for an on-site 3D printer that reportedly can create a concrete slab as long as 60 feet in less than one minute. Concrete slabs can range in thickness from a quarter inch to 30 inches. The company reports that its printer uses a “slip-form mold extrusion system” that limits bubbles and air in the concrete that shortens the curing process, allowing the concrete to be ready to support weigh moments after being laid.

Armatron further boasts that the printer system is lightweight, with no piece weighing more than 70 pounds, and can be set up and ready to cast concrete in 35 to 45 minutes. An added benefit is that any concrete can be used. While the system can create a concrete slab as long as 60 feet in less than one minute, the company says the average operating pace is about 20 feet per minute. As such, the company estimates that the printer can build a 1,500 square foot space in two days, from foundation to roof.

New York-based SQ4D, an offshoot of S-Squared 3D Printers, completed in January construction of a new building, in what it claims is the “largest permitted 3D printed home in the world.” The structure is 1,900 square feet, and was built over an eight-day period with a reported 48 hours of print time. The home was reported to be entirely printed and built on-site using less than $6,000 in materials.

 

Law Lags Behind Innovation

The challenge, as often happens with new technology, is that the law sometimes cannot catch up with innovation fast enough.

With the advent of 3D printing in construction moving out of the research labs and onto construction jobsites in the last few years, there is a disconnect between the available technology on one hand, and building code, permitting, inspection authorities, and contract provisions on the other hand.

All of this technology is moving at a lightning-quick speed. However, as of this writing, most municipalities do not have any codes relating to 3D printing or additive technology.

Additionally, while suites of construction contracts from ConsensusDocs and AIA have recently-adopted Building Information Modeling addenda, they do not anticipate actual construction to be completed by 3D printing techniques. If someone wants to build a 3D printed building, they have to work by analogy. Similarly, case law has not yet been documented addressing issues that may come up with 3D printed structures. Building inspectors will encounter similar hurdles.

 

New: The 3D Printed Building Appendix

In one major step forward, in April 2019, the International Code Council introduced the 3D Printed Building Construction Appendix 4 to modify the 2018 International Residential Code (IRC). The 2019 Public Comment Hearings were held in October 2019, and the Online Governmental Consensus Vote on the Public Comment Hearings was closed in December 2019. Both vote tallies showed that the 3D Printed Building Construction Appendix was approved as modified by public comment. The ultimate results are not final, however according the preliminary results, it appears that the Appendix may ultimately be incorporated into the IRC.

If the 3D Printed Building Appendix is adopted, buildings and structures fabricated in whole or in part using 3D printed construction techniques will finally have one benchmark for design, construction, and inspection.

Most of the proposed IRC Appendix incorporates by reference the Underwriters Laboratories’ UL 3401, Outline of Investigation for 3D Printed Building Construction. The first edition of UL 3401 was published Oct. 25, 2019, and can be purchased through the UL Standards Sales Site.

According to an April 2019 news story, “UL 3401 covers the evaluation of building structures and building assemblies such as panels, walls, partitions, floors, ceilings, roofs, columns, and beams fabricated using an additive manufacturing process.”5 It includes requirements to monitor, display, and provide reports on key production parameters that are critical to ensure that building assemblies are consistently produced within certain design specifications and tolerances. It also requires documentation to be available to confirm the production parameters used during the build.6

In addition, the UL 3401 evaluation examines the fabrication process, and establishes production controls to determine that 3D printed structures consistently meet certain criteria for mechanical strength, fire performance, air and water barrier, thermal insulation, indoor air quality, and durability.7

 

Just the Beginning

While the proposed IRC Appendix shows one small step toward the law catching up with innovation, there are still multiple hurdles to overcome at every step. Local building codes will have to be tailored to accommodate 3D printing, with permitting and building inspectors being educated in the mechanics of 3D printed structures.

Architects will have to quickly become familiar with possibilities and limitations of 3D printed components and the interface with traditional construction techniques. Insurance coverage may have to be tailored accordingly. The major suites of construction contracts may also want to consider developing an addendum related to 3D printed structures.

Construction attorneys will further have to be careful to think through the additive manufacturing process, taking into account exact method of 3D printing, manufacture and design when writing contracts.

Despite the innovation, a potential countervailing view is that the legal issues may stay very much the same, such that construction contracts may not have to be modified much at all. Disputes will still likely be over the same general categories of cost, schedule, and defects. If a 3D printed building comes in over budget and behind schedule, with a roof leak added in for good measure, the owner will still be looking at the general contractor for correction and contribution.

 

Get Ready

As 3D printed structures become increasingly a part of the construction industry, these issues will undoubtedly be tested. While the innovation is still ramping up, construction attorneys should become familiar with the various 3D printing techniques in use, so that if a client comes in the door with an idea to construct a 3D printed building, potential liabilities can be evaluated and a proper measures put in place to ensure a successful project.

This article was originally published on the State Bar of Wisconsin’s Construction and Public Contract Law Section Blog. Visit the State Bar sections or the Construction and Public Contract Law Section web pages to learn more about the benefits of section membership.

 

Endnotes

[1] See, e.g.,Top 10 toys to make for your 3D printed Christmas, 3Dnatives.com; 19 3D Printed Toys You Can Print for Your Kids Today, tutorial45.com.

[2] See, e.g., 3D Printing of Medical Devices, FDA.gov.

[3] WePrintHouses.com.

[4] The proposed code at issue is located at p. 789-791 of the Appendix.

[5] Evaluation of 3D Printed Building Construction. Coming Soon?, UL.com.

[6] Id.

[7] Id.

 

The information contained on this website is provided for informational purposes only, and should not be construed as legal or tax advice on any subject matter. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client relationship between the reader, user, or browser and website authors. You should not act or refrain from acting on the basis of any content included on this website without retaining an attorney.

Waiving lien rights without waiving your legal rights

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In Wisconsin, construction liens are one of the most powerful means that general contractors, subcontractors and material suppliers have of securing payment for work on construction projects.

Often, a payment is exchanged at the same time that a contractor or supplier waives their rights to a lien against a project. Sometimes, however, lien waivers are submitted before payment is received.

The result is that contractors or suppliers give up their rights to a lien against the project, regardless of whether they ultimately receive payment. In January, The Daily Reporter ran an article in part questioning why someone would be willing to sign and submit a lien waiver before receiving payment.

The offered reason was “because they believe they have no other choice” – a statement which, if true, has detrimental legal repercussions for the unwary contractor or supplier. Although contractors and suppliers may hold this belief, the truth is that Wisconsin’s construction lien law offers protections to lien claimants.

Wisconsin lien law provides that anyone “who performs, furnishes, or procures any work, labor, service, materials, plans, or specifications, used or consumed for the improvement of land, and who complies with (the Wisconsin lien statute requirements), shall have a lien therefor on all interests in the land belonging to its owners.”

A lien claimant may waive his or her rights to a lien by signing a written statement waiving that lien, commonly known as a “lien waiver.” When it comes to lien waivers, the law is strict — a waiver of a construction lien is valid and binding, whether or not payment was made, and whether the document was signed before or after the work was performed, furnished, or procured, or contracted for.

A lien waiver is deemed to waive all lien rights of the signer for all work performed at any time on the project, except to the extent that the document specifically and expressly limits the waiver to apply to a particular portion of the work. Practically speaking, if someone submits a lien waiver without accepting any work, that person has effectively given up his or her right to file a lien against the owner’s property — even if the lien claimant has not yet been paid a dime.

Quite often, lien claimants are required to submit a waiver of lien rights along with an application for payment. Why? Perhaps it is because the title company, general contractor or owner require it as a prerequisite to payment. Or, perhaps it is just industry custom.

Problems arise, however, when the lien claimant does not receive the payment requested in its application for payment. Ordinarily, the lien claimant’s legal recourse would be to file a lien on the property to secure whatever is owed.

However, if the lien claimant already submitted a lien waiver along with its payment application, it may have voluntarily given up its rights to that lien, and as a result, the leverage and additional source of payment that a lien provides.

Wisconsin lien law has dealt with some of the difficulties facing contractors and suppliers. Contract provisions that require someone to waive a right to a construction lien before receipt of payment are unenforceable and deemed void.

The law also allows a subcontractor who has signed a contract containing a waiver provision to refuse to furnish the waiver unless paid in full. The Wisconsin Court of Appeals has interpreted Wisconsin lien law statues to give contractors a choice: they can either give a lien waiver before being paid (thereby extinguishing lien rights before payment is received) or refuse to give a lien waiver until paid. In addition, a contractor or supplier from which a waiver is requested is entitled to refuse to furnish a waiver unless paid in full for the labor, services, materials, plans, or specifications to which the waiver relates.

A word of caution is in order: Any ambiguity in a lien waiver is construed against the person signing it. As a result, lien claimants should be careful not to inadvertently waive lien rights for work that has not yet been performed or for which they have not yet been paid.

For example, a lien waiver that waives rights to work performed within a certain period of time could be held to cover retainage or change-order work that has not yet become due or billed.

To ensure that lien rights are properly preserved and to protect against the consequences of lower-tier lien claimants, all parties should be aware of the rules relating to construction liens and the waiver of rights to those liens.

Bryan Kroes is an attorney at Wauwatosa-based Hurtado Zimmerman and practices in the areas of commercial and residential real property development and acquisition, construction and real estate litigation, construction contract preparation and related intellectual property law.

The information in this column has been prepared for general information purposes and is not legal advice, is not to be acted on as such and should not be relied upon for legal advice in any particular circumstance or situation.

Reprinted from The Daily Reporter 02/28/2016 By BridgeTower Media Newswires

 

The information contained on this website is provided for informational purposes only, and should not be construed as legal or tax advice on any subject matter. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client relationship between the reader, user, or browser and website authors. You should not act or refrain from acting on the basis of any content included on this website without retaining an attorney.