Philadelphia Construction Law Blog

We recently reported that the Pennsylvania legislature passed amendments to the Pennsylvania Steel Products Procurement Act that Governor Corbett signed into law. The change, which created automatic exemptions for certain products under the Act, is designed to make compliance with the law more manageable and decrease costs on state contracts.

The Southeastern Pennsylvania Transportation Authority (“SEPTA”) recently released its annual report focusing on the theme of sustainability, aptly titled “SEP-TAINABLE”. In that report, SEPTA commits to partnering with developers, municipalities, and other organizations to invest in various Transit-Oriented Development (“TOD”) projects, which are high-density mixed-used development projects within a half mile of public transportation. Specifically, SEPTA announced that it intends to engage in one TOD per year.

Construction agreements often contain clauses requiring parties to submit their claims to arbitration. These provisions are favorable to the parties, as arbitration has certain benefits. For example, it may be quicker and more efficient than going through the court system and may be more relaxed than the legal process, thereby encouraging compromise or ongoing business relationships between the parties. An arbitrator or a panel of arbitrators is generally chosen by the parties, which typically results in the selection of someone sophisticated and knowledgeable in the construction industry.

The Pennsylvania General Assembly is considering legislation that would require the design, construction, and renovation of certain state-owned or leased properties to comply with specified energy and environmental building standards. House Bill 34, the lead proponent of which is Representative Kate Harper of Montgomery County, is largely identical to a bill introduced last session.

A prior holding by the Supreme Court of New Jersey in Craft v. Stevenson Lumber Yard, Inc., declared that a construction lien claimant has a “statutory duty” under the Construction Lien Law “to allocate payments to the accounts from which they were derived”. In other words, contractors, subcontractors, and suppliers are not permitted apply payments originating from an owner on one project to another project to do things like pay off older debt. The Appellate Division’s recent decision in L&W Supply Corp. v. Joe DeSilva enlarges that obligation to one of inquiry based on reasonable suspicion.

After years with little to no change, the legislature in Pennsylvania has spent a good amount of time making revisions to the Mechanic’s Lien Law recently. Just last year we reported on amendments being considered; and more changes are being proposed to the statute as the General Assembly begins its 2013 session.

The Wage and Hour Division of the U.S. Department of Labor is increasing its efforts to pursue the misclassification of independent contractors under the auspices of Vice President Joe Biden’s Middle Class Task Force. Calling it a serious problem “for affected employees, employers, and to the entire economy”, the efforts are designed to address the improper designation of employees in some other manner.

President Obama has signed the Drywall Safety Act of 2012, which was passed by the House and Senate last year. The legislation is designed to relieve some of the problems associated with tainted Chinese drywall that was, among other things, high in sulfur content. Another goal of the new law is to prevent the defective product from re-entering the U.S. market and causing further damage to property and the economy.

Releases of claims are commonly negotiated and signed by parties involved in the construction process. But the content of a release has significant bearing on the rights of the parties relative to claims between them and should be carefully negotiated. This principle was recently highlighted in a case decided by the Supreme Court of Delaware (Riverbend Community LLC et al. v Greenstone Engineering LLC et al.).

As the legislative session in Pennsylvania gets underway in earnest, the making of laws starts anew. Among those under consideration may be several pieces of legislation that were under consideration last year but never made it to the floor for a vote. An act designed to make revisions to the apprenticeship structure in the state was one such bill.