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Becker & Poliakoff Wins Multi-Million Dollar Jury Verdict In Landmark Construction Case

06/05/2017 Becker Poliakoff


FOR IMMEDIATE RELEASE
Media Contacts:
Kris Conesa or Andi Phillips
Roar Media
kconesa@roarmedia.com or aphillips@roarmedia.com
(305) 975-5934 or (305) 401-5098

Jury Finds Subsidiary of National Developer Hovnanian Enterprises Inc. Liable for Breach of Contract and Violation of the New Jersey Consumer Fraud Act 

MORRISTOWN, NJ & FORT LAUDERDALE, Fla. – June 5, 2017 – Becker & Poliakoff secured a landmark $9 million-plus jury verdict Thursday against a subsidiary of Hovnanian Enterprises, Inc. (NYSE: HOV). The award includes punitive (treble) damages for violation of the New Jersey Consumer Fraud Act and also entitles the plaintiff to recover attorneys’ fees, costs and prejudgment interest. The jury found that Hovnanian Enterprises used the subsidiary as an instrument to commit a fraud or injustice on purchasers of condominium units. The ultimate recovery against all parties, including the project architect and geotechnical engineer, could exceed $20 million.

After a six-week trial in New Jersey Superior Court (Docket No. HUD-L-2560-13), the jury agreed that Hovnanian, after learning that the condominium building was being improperly constructed with plywood flooring in violation of the building code, chose to nevertheless continue construction. Hovnanian then sought to reclassify the building type. The jury agreed with the plaintiff’s position that the reclassification was never approved by governmental authorities. The units were then sold without disclosing the code violations or the lack of approval to the buyers. The claim arose out of construction problems with the six-story, 132-unit residential and commercial building in Port Imperial, West New York, NJ.

Matthew Meyers, a Shareholder in Becker & Poliakoff’s Morristown office, represented the homeowners and initiated the suit against Hovnanian. “Hovnanian knew that the use of combustible materials in the flooring was in violation of the building code, and instead of fixing the mistake, attempted to change the building’s classification. They then sold units knowing that the change in classification had never been approved. They continued to arrogantly defend their conduct at trial but the jury would have none of it. Hopefully, after this verdict, Hovnanian will get the message.”

“A key point making this landmark case particularly unique is that the parent company, Hovnanian Enterprises, was found to have used its shell subsidiary to perpetrate an injustice on the condominium unit buyers,” said Becker & Poliakoff shareholder John Cottle, who was first chair/lead trial counsel in the case representing the homeowners. “This is a rare instance in which the ‘corporate veil’ was pierced, and we expect the result of this will be that Hovnanian Enterprises will ultimately be held responsible for the judgment.”

In addition to Cottle, the Becker & Poliakoff trial team from Florida included: Perry M. Adair, Miami managing shareholder and a board-certified construction law attorney; and Sanjay Kurian, a shareholder and board-certified construction law attorney. The New Jersey team included Vincenzo Mogavero, a shareholder and litigation Chair and Martin Cabalar, in addition to Mr. Meyers. 

About Becker & Poliakoff
Becker & Poliakoff, with headquarters in Fort Lauderdale, Fla., is a multi-practice commercial law firm with attorneys, lobbyists and other professionals at offices across the United States. More information is available at www.bplegal.com.

David Ramsey Receives CAI Distinguished Service Award

05/12/2017 Becker Poliakoff
Hearty congratulations go out to J. David Ramsey, shareholder in Becker & Poliakoff’s community association practice group. David was recently honored with the Distinguished Service Award at the Community Associations Institute’s (CAI) Annual Conference Awards dinner in Las Vegas.

The Distinguished Service Award is CAI’s most prestigious award and is periodically presented in recognition of longstanding, extraordinary contributions to the Institute. A member of CAI for over 30 years, David served as president in 2003-04 and remains actively involved in CAI’s Government and Public Affairs Committee, chairs the New Jersey Chapter’s Strategic Planning Committee and is a member of the New Jersey Legislative Action Committee. David has spent the majority of his legal career advocating on behalf of community associations, particularly in New Jersey and New York.


CondoMundoUSA

Votación Por Linea - Video

10/18/2016 Martica Miguez Platts



Si usted vive en una comunidad residencial que está dirigida u operada por una asociación, o si usted sirve en la junta directiva de la comunidad, quizás desee obtener la comodidad de votación por línea.   Nuestra firma de abogados acaba de lanzar un breve video de instrucción sobre nuestro producto por línea llamado BPBALLOT.   Dedíquele unos minutos a este video.
La votación por línea le permitirá a su comunidad aumentar la participación de su membrecía a la vez que reducirá la posibilidad de fraude electoral.  Estamos seguros que usted disfrutará y obtendrá beneficios del video.  Si tiene cualquier pregunta, por favor envíenos un correo electrónico a condomundousa@bplegal.como llámenos al 561-820-2870. 

Martica y Marilyn
Sus amigas de CondoMundoUSA






Estudio de Votación y Fraude en las Asociaciones / Community Association Voting and Fraud Survey

06/17/2016 Martica Miguez Platts
CondoMundoUSA les trae el Estudio de Votación y Fraude.  Este estudio tiene el propósito de identificar las preocupaciones relacionadas con el proceso de votación de los miembros de las asociaciones de comunidades.  Los resultados ayudarán a crear materiales educativos y ayudarán a encabezar cambios en las disposiciones legales que gobiernan el método de votación en las comunidades.

Solamente le tomará 5 minutos haga "click" en el idioma que prefiera. 

Español                       Inglés

Gracias, 

Martica y Marilyn


***************


CondoMundoUSA has created a survey intended to help identify concerns of community association members related to voting. The results will help create educational materials and help spearhead changes in statutory provisions governing voting in communities.

It should only take 5 minutes, please click on your preferred language.

Spanish                       English



Thank you, 


Martica & Marilyn

The Community Association Law Blog

"What's in a Name?" Quite a bit, particularly for Association Board Members who have been Defamed.

06/05/2017 Donna DiMaggio Berger
When Shakespeare coined the phrase "the slings and arrows of outrageous fortune" in Hamlet, he probably wasn't envisioning that sentiment could apply centuries later to volunteer board members.  However, the Bard was opining that bad things can happen to a person and, in the present-day context, if you serving on a community association board of directors, those bad things can arrive in the form of defamation:  slander and libel.

Over the years, I've been contacted by far too many board members who recount stories about horrible things which had been said or written about them both during their board service and even years afterwards.  After the tale is told, the next statement is usually, "I want to sue".  This blog post is not about whether or not those harsh words were warranted; it is about whether or not a board member can successfully pursue a defamation claim against his or her detractors. Defamation is a tort which refers to a false statement, either spoken (which is known as slander) or written (which is known as libel) that injures someone's reputation.

Some types of false statements are considered so damaging that they are deemed defamatory on their face (which is known as defamation per se) and thus, do not require the plaintiff to prove the defamatory nature of those statements or the plaintiff's damage. Typical examples of these kinds of statements which are deemed inherently injurious to one's reputation are:

  • Statements that injure another's reputation in his trade, business or profession. For example, if the Board President is a licensed real estate agent and a unit owner alleges that he has cheated other brokers out of their fair share of commissions over the years, his reputation in the real estate industry would be injured;
  • Statements claiming someone has a "loathsome disease";
  • Statements claiming that the person is "unchaste". In one community, a manager was accused of engaging in an extramarital affair with the community's landscaper and thus was the victim of slander per se;
  • Allegations that an individual has been involved in criminal activity.
To state a cause of action for defamation in Florida, a plaintiff must allege the following:

  • The defendant published a false statement. The defendant's knowledge that the statement was or was not false is not the crux of the issue; the defendant's intent to publish the statement to a third party is.
  • The statement was made about the plaintiff.
  • The statement was made to a third party. The defendant must communicate the information with an intent to have someone hear or read it.  For example, if the defendant made the statement with the reasonable belief that no one was around to hear it but the statement was overheard by a third party, that is not slander. The defendant must intend to have the statement read or heard by a third party.  In addition, if the besmirched director is the only one who heard or read the statement, that also does not constitute slander or libel.
  • The falsity of the statement caused injury to the plaintiff.
The following are some of the recognized defenses to a defamation suit:

  • Truth is a complete defense to any slander claim.
  • Opinion as a defense depends heavily on the credibility and reputation of the person rendering the opinion.  If a third party would typically rely upon the person's statements, then simply prefacing the defamatory content with an "in my opinion" qualifier will not be sufficient to shield the statement maker from liability.
  • Consent is analogous to truth as an absolute defense. If the statement maker had the subject's consent to publish the statements than that consent will bar a slander action.
  • Poor Reputation is not a complete defense to slander but can be used by the defendant to mitigate his or her damages in a defamation lawsuit by proving that the plaintiff had a bad reputation for the character trait at issue.
Some problems when attempting to pursue a defamation lawsuit include:

  1. It can be difficult to prove that the statements are false.  Statements that a director is a criminal can be easily proven false by submitting a clean criminal background as proof. However, statements that a director tampered with election ballot envelopes is harder to address unless the director can account for every step of the election process.
  2. "She said, he said" situations can result in a stalemate.  It will be necessary to have witnesses come forward when dealing with slander.  Libel is easier because the written material can be produced.
  3. Online defamation can be tricky.  The plaintiff must prove that the defendant was actually the one making the statement(s) and that may require forensic investigation to uncover the identity of a particular online account.
  4. Proving financial damage in a community association setting is not easy.  Community association directors are typically unpaid positions. Unlike an employee who is slandered and subsequently fired as a result of the statements made, what real financial harm does a board member suffer as a result of statements made to ensure that he or she is not re-elected to the Board?  Emotional distress alone is not enough to mount a successful defamation claim.
  5. Directors may be considered limited purpose public figures rather than private figures. My law partner, Howard J. Perl, authored an article published in the Florida Bar's ActionLine periodical discussing the growing body of national case law which is making it harder for association board members to pursue defamation actions.  According to Howard, "to support a claim for defamation, a private figure need only show negligence by the alleged defaming party, while a public figure must show 'actual malice'." Board members can take themselves out of the realm of a private figure and wind up becoming a limited purpose public figure if they become "a key figure in a particular controversy." For example, if a director takes a very aggressive and outspoken approach on a particular capital improvement project in an attempt to gain membership approval for same and a detractor decides to respond by listing all the reasons that director should not receive support for the project including a regurgitation of past transgressions, the director may have to prove that the statements were made with actual malice. To read Howard's full article on this topic please click here: http://www.becker-poliakoff.com/community-association-board-members-can-be-considered-limited-purpose-public-figures
If you serve on your board and you have been the victim of defamation, speak with an experienced association attorney who can walk you through the steps discussed herein to determine whether or not you have a viable cause of action.

Since I started this post with the Bard, I will end with him:


"Good name in man and woman, dear my lord,
Is the immediate jewel of their souls;
Who steals my purse steals trash; 'tis something, nothing'
'Twas mine, 'tis his, and has been slave to thousands;
But he that filches from me my good name
Robs me of that which not enriches him,
And makes me poor indeed."  William Shakespeare-Othello

Would you know if financial fraud is taking place in your community?

05/30/2017 Donna DiMaggio Berger
I was recently contacted by a condominium client to discuss a growing distrust which had taken hold amongst the board members
and management related to financial functions, particularly with regard to the reconciliation of bank statements I asked my friend and national insurance expert, Joel Meskin, to weigh in on the best way to implement a system of checks and balances to deter and detect fraud. Joel is a fellow attorney, the Managing Director of Community Association Products for McGowan and a fellow member of the prestigious College of Community Association Lawyers (CCAL).


The following is an edited version of our conversation.


DB:    Is awareness of the potential for fraud in a private residential community more important for boards today?


JM:    With the current hyper scrutiny being directed at condominium associations, community association managers and boards of directors in Florida, it is imperative that all involved be very sensitive to the heightened demand and need for transparency.  This should particularly be the case with respect to financial records.


DB:    How do financial crimes occur in community associations?


JM:    Crime in community associations manifests in many ways.  Associations are soft targets and are often lulled into a false sense of security.  Most often, associations are victims of crimes of opportunity due to the failure to use simple checks and balances.  Whether committed by directors or officers, employees or community association managers, even the best can take advantage of unchecked opportunities.  As you know, we provide director and officers' liability insurance and fidelity/crime insurance to community associations around the country, including Florida. With respect to fidelity/crime insurance, it is all about the "Checks and Balances".


DB:    Do you have any recommendations for communities regardless of their size, their budget or their location?


JM:    One thing we have found to be absent from association governance and management is conducting a standard background check on all those who will be handling, managing or involved with financial transactions.  I do not believe that it will be a prohibitive cost and I believe it will be worth its weight in gold to help instill a sense of trust and transparency at this time.  Community associations are often lulled into a false sense of security and informality when it comes to those volunteers who help manage their association. Safeguarding against this false sense of security is simple and inexpensive.


As far as checks and balances go, it is imperative that no single person has control of protocols from beginning to end, especially those who reconcile should not be making deposits.  Many of us have friends or family members who work at banks and we know that they are required to take vacations for specific periods of time to run through oversight cycles. These checks and balances are deterrents more than anything.


DB:    What kind of first party insurance coverage should an association consider when crafting a solid anti-fraud policy?


JM:    You insure the money you have.  You add up all the operating and reserve accounts, add three to six months of operating expenses and that is the limit you need. A Board also needs to make sure it ahs the following coverage:


  • Forgery and Alteration
  • Inside the Premises, Theft of Money & Securities
  • Inside the Premises, Robbery & Safe Burglary
  • Outside the Premises
  • Computer Fraud
  • Funds Transfer Fraud-this is the biggest threat these days as this is when someone hacks into the association's account and then transfers money to another account without authorization.
  • Social Engineering and False Pretense
In my client's case, Joel recommended that the association engage its CPA firm to handle the bank reconciliations for the association rather than having a board member or the manager perform that function. He also recommended an annual audit even if not currently required by statute.


A big thank you to Joel Meskin for his insight and tips on how to prevent fraud in your community association.



Biz Law Today

What Is “Product Hopping” and Why Should You Care?

08/04/2015 Becker & Poliakoff

ThinkstockPhotos-97429646This post was authored by Ann Marie Effingham, an intern for Becker & Poliakoff who is based out of the firm’s Red Bank, New Jersey office.

New Jersey is home to 14 of the world’s 20 largest pharmaceutical companies so when our sister circuit—the Second Circuit Court of Appeals—issued a decision of first impression regarding pharmaceutical patents, we should take notice. To summarize, the state of New York brought an antitrust action against Actavis PLC claiming the manufacturer’s introduction of the once-daily capsule that treats Alzheimer’s disease at the end of the manufacturer’s patent exclusivity period for the twice-daily tablets impeded competition in violation of the Sherman Act. The Southern District of New York granted a preliminary injunction barring Actavis PLC from restricting access to the twice-daily version until after generic competition entered the market, and the Second Circuit Court of Appeals affirmed the injunction.

The Second Circuit Court of Appeals explained that neither product withdrawal nor product improvement alone is anticompetitive. However, when product withdrawal is combined with some other conduct—the overall effect of which coerces consumers and impedes competition—a manufacturer’s actions are anticompetitive under the Sherman Act.

The Actavis PLC case is an example of “product hopping”—whereby a manufacturer introduces a “second-generation” formulation of a drug and removes the previous formula that is nearing the end of its patent lifecycle which then restarts the regulatory approval process for the generic manufacturer. In theory, a manufacturer could keep reformulating its patented product if it can show that continuous improvement in the drug is being made. However, under some circumstances this type of behavior is anti-competitive. Generic manufacturers enter the market at the end of the brand name’s patent lifecycle so when a brand name manufacturer engages in “product hopping” it keeps generic manufacturers from entering the market—which could ultimately lead to a monopolization.

So what does this mean for the biopharmaceutical and medical device industry? The timing and rationale behind product reformulation is key. When product redesign is done simply to coerce consumers and impede competition, it is anticompetitive under the Sherman Act. The Second Circuit Court of Appeals noted that Actavis PLC’s own CEO admitted that the Defendants were “trying to . . . put up barriers or obstacles” to generic competition. Conversely, a large market share that is gleaned from natural growth, development of a superior product while simultaneously giving consumers the option of choice between products, or exceptional business acumen are all justifiable explanations for why a manufacturer may control a significant portion of the market.

A second product hopping case has arisen in the Third Circuit Court of Appeals. There, the Federal Trade Commission (FTC) has filed an amicus brief strongly supporting antitrust causes of action against companies that product hop. Hopefully the Third Circuit can provide more insight as to how to evaluate product hopping cases.

Employers Beware: You May Be Liable to Whistleblowers Without the SEC Ever Getting Involved

07/28/2015 Becker & Poliakoff

ThinkstockPhotos-184747120 (1)This post was authored by Peter Wojcik, an intern for Becker & Poliakoff who is based out of the firm’s New York office.

On June 17, the Second Circuit U.S. Court of Appeals heard oral arguments in Berman v. Neo@Ogilvy, LLC, making it the latest court to venture into the arena of interpreting Dodd-Frank’s whistleblower provision. In Berman, U.S. District Judge Gregory H. Woods of the Southern District of New York held that, before a whistleblower may be protected under Dodd-Frank’s whistleblower anti-retaliation provision, he or she must report securities violations to the SEC. This stands in stark contrast to other district court decisions that have allowed individuals to sue if they only disclosed the violations to their employers.

In Berman, the plaintiff alleged that he was fired after complaining to his employer about seeing transactions that he believed to violate U.S. securities laws, including Sarbanes-Oxley and Dodd-Frank. Never having reported these violations to the SEC, the plaintiff sued his former employer, alleging violations of Dodd-Frank’s whistleblower provision. The provision essentially prohibits an employer from retaliating against a “whistleblower” who:

  • Provides information to the SEC concerning violations of securities laws;
  • Initiates, testifies in, or assists in any investigation or judicial or administrative action of the SEC; or
  • Makes disclosures that are required or protected under the Sarbanes-Oxley Act and any other law, rule, or regulation subject to the SEC’s jurisdiction.

However, the provision also defines a “whistleblower” as “any individual who provides . . . information relating to a violation of the securities laws to the Commission . . . .” The plaintiff in Berman argued that he was entitled to protection because, although subsections (i) and (ii) protect disclosures to the SEC, subsection (iii) includes disclosures to supervisors. Judge Woods remained unpersuaded. In dismissing the plaintiff’s claim, Judge Woods noted that the provision’s language was clear: In order to be a “whistleblower” under the Act, the individual must provide the information “to the Commission,” i.e., the SEC.

District courts that have allowed Dodd-Frank whistleblower protection for individuals who report violations to their employers have essentially followed the plaintiff’s reasoning. Despite the plain language definition of a “whistleblower” under the statue, they have held that subsection (iii) is a narrow exception to the definition and encompasses protection for individuals who report to supervisors.

The Second Circuit is expected to hand down its decision later this year. Although the Fifth Circuit is the only circuit to already decide the issue (holding that whistleblowers must report violations to the SEC in order to sue), district courts across the U.S. are in disagreement. Regardless of how the court in one’s jurisdiction rules, however, the law is still subject to change. If courts continue to disagree, it is likely that the Supreme Court will take up the issue in the future. Until the High Court decides the issue, employers must be aware of the fact that they may be subject to liability under Dodd-Frank’s whistleblower provision once their employees report violations internally.

Construction Law Authority

Becker & Poliakoff Wins Multi-Million Dollar Jury Verdict In Landmark Construction Case

06/05/2017 Becker & Poliakofff

header_news_lauderdale

FOR IMMEDIATE RELEASE
Media Contacts:
Kris Conesa or Andi Phillips
Roar Media
kconesa@roarmedia.com or aphillips@roarmedia.com
(305) 975-5934 or (305) 401-5098

Jury Finds Subsidiary of National Developer Hovnanian Enterprises Inc. Liable for Breach of Contract and Violation of the New Jersey Consumer Fraud Act

MORRISTOWN, NJ & FORT LAUDERDALE, Fla. – June 5, 2017 – Becker & Poliakoff secured a landmark $9 million-plus jury verdict Thursday against a subsidiary of Hovnanian Enterprises, Inc. (NYSE: HOV). The award includes punitive (treble) damages for violation of the New Jersey Consumer Fraud Act and also entitles the plaintiff to recover attorneys’ fees, costs and prejudgment interest. The jury found that Hovnanian Enterprises used the subsidiary as an instrument to commit a fraud or injustice on purchasers of condominium units. The ultimate recovery against all parties, including the project architect and geotechnical engineer, could exceed $20 million.

After a six-week trial in New Jersey Superior Court (Docket No. HUD-L-2560-13), the jury agreed that Hovnanian, after learning that the condominium building was being improperly constructed with plywood flooring in violation of the building code, chose to nevertheless continue construction. Hovnanian then sought to reclassify the building type. The jury agreed with the plaintiff’s position that the reclassification was never approved by governmental authorities. The units were then sold without disclosing the code violations or the lack of approval to the buyers. The claim arose out of construction problems with the six-story, 132-unit residential and commercial building in Port Imperial, West New York, NJ.

Matthew Meyers, a Shareholder in Becker & Poliakoff’s Morristown office, represented the homeowners and initiated the suit against Hovnanian. “Hovnanian knew that the use of combustible materials in the flooring was in violation of the building code, and instead of fixing the mistake, attempted to change the building’s classification. They then sold units knowing that the change in classification had never been approved. They continued to arrogantly defend their conduct at trial but the jury would have none of it. Hopefully, after this verdict, Hovnanian will get the message.”

“A key point making this landmark case particularly unique is that the parent company, Hovnanian Enterprises, was found to have used its shell subsidiary to perpetrate an injustice on the condominium unit buyers,” said Becker & Poliakoff shareholder John Cottle, who was first chair/lead trial counsel in the case representing the homeowners. “This is a rare instance in which the ‘corporate veil’ was pierced, and we expect the result of this will be that Hovnanian Enterprises will ultimately be held responsible for the judgment.”

In addition to Cottle, the Becker & Poliakoff trial team from Florida included: Perry M. Adair, Miami managing shareholder and a board-certified construction law attorney; and Sanjay Kurian, a shareholder and board-certified construction law attorney. The New Jersey team included Vincenzo Mogavero, a shareholder and litigation Chair and Martin Cabalar, in addition to Mr. Meyers.

About Becker & Poliakoff
Becker & Poliakoff, with headquarters in Fort Lauderdale, Fla., is a multi-practice commercial law firm with attorneys, lobbyists and other professionals at offices across the United States. More information is available at www.bplegal.com.

Inside The Nation’s Varying Contractor Licensing Rules — And How They Impact Business

05/26/2017 Becker & Poliakofff

Construction Dive Magazine

This article originally appeared in Construction Dive Magazine, May, 2017, Reprinted with Permission.

Lee Weintraub, Florida Construction Defect AttorneyIn an effort to safeguard their residents against fraud and the chaos that can result from unprofessional behavior or lack of experience and knowledge, most states have some kind licensing procedure in place for professions like lawyers, physicians and real estate agents.

However, when it comes to construction contractors — who practice in an industry that is full of life and death scenarios — there is little state-to-state licensing uniformity.

How do these regulations vary across the U.S., and is there any indication that a strict regulatory scheme results in a higher level of professionalism and quality among contractors?

How licensing rules vary

“We see both extremes where it’s extremely difficult to get a license, and then on the opposite side where anyone with a hammer and pickup truck can be a contractor,” said Chuck Taylor, director of operations for Chicago- area Englewood Construction.

Taylor’s assessment of the licensing landscape isn’t an exaggeration.
Florida and California, for example, license a plethora of trades from pool maintenance technicians to drywall hangers to bridge builders. Along with extensive business and trade knowledge testing, both states have strict financial requirements, which include providing information about the person qualifying the applying company — the one who takes the required exams and assumes financial and professional liability for the its construction operations — other stakeholders and as the business itself.

California also requires a license bond, and Florida mandates that those qualifying a company have a minimum FICO score of 660. Both states also collect applicant fingerprints and run background checks.

Lee Weintraub, chair of the public private partnership practice at Becker & Poliakoff in Florida, said mother nature is partly to blame for the aggressive licensing agendas in these two states.

“My understanding … is that it’s because they are two of the biggest natural disaster zones,” he said. “They get earthquakes, and we get hurricanes.” And with extreme weather events come the predatory contractors who take the money and run, so the rationale behind the first laws was to protect consumers.

From those beginnings, he said, the scope of those licensing regulations grew into what the industry has today — a lot of licensed trades.

On the other end of the spectrum are states like Texas and Illinois, Englewood Construction’s home state. Neither has a state-level contractor licensing system, with the exception of trades that are considered tied to public safety like roofing, fire protection, asbestos and electrical.

In a sector where exceptions are the rule, from state to state, there isn’t one agency that is responsible for that type of licensing, either. It could be a state fire marshal’s office, a public health agency or a financial services office.

But the differences aren’t limited to states. Cities like Chicago and New York also have contractor registration and licensing programs of their own to fill in the gaps that state regulatory agencies leave behind. Even a state with far-reaching state licensing requirements like Florida still has county-level licensing for trades not covered by state law or for those who perform work in only one county.

In the case of, for example, a drywall contractor who only performs work in Pinellas County, FL, they can take an exam and get licensed locally, but, because there is an equivalent state-level license, they must still register with the state and meet the same financial requirements as a state contractor.

The impact of stricter requirements

The leaves the question: How do these rules impact contractors?

Taylor and Weintraub both said the extensive financial and application requirements of licensing systems, like there are in Florida and California, help weed out those financially unprepared to run a construction business.

Regarding the argument that such strict contractor regulations saddle contractors with too much paperwork and associated expense, Weintraub said, “There’s no merit to the argument that it makes it worse for contractors. There are some restrictions that aren’t onerous like putting a license number on a truck … but there’s no burden I see at all on your ability to run your company.”

There are some local requirements, however, that Weintraub said could be considered more fundraising-minded.

For example, Florida licensed contractors are authorized to perform work freely throughout the state, but counties and municipalities still take a bite of the apple by levying registration fees or other charges, even if the contractor’s base of operations is in another part of the state.

Englewood does work all over the country, and strict licensing requirements, he said, sometime seem like a purposeful barrier to entry.

For example, in Arkansas, one of the pieces of paperwork required with
a general contractor’s license application is an audited or reviewed financial statement, which can be a pricey proposition for a company the size of Englewood, as many accounting firms calculate their fees for this service based on company revenue. This is something that could derail a company’s plans to enter the market, Englewood said, but it’s difficult to ascribe motive.

New York doesn’t have a major state licensing program either, according to John Patrick Curran, partner at Sive, Paget & Riesel. Contractors, he said, are licensed at the local level, with the exception of those working in the field of asbestos abatement.

In New York City, Curran said, along with some other cities, only contractor registration is required, but that’s primarily for practical safety reasons.

Registration assures the contractor has adequate insurance and complies with Department of Buildings rules.

For example, the DOB requires that projects between 10 and 14 stories have a Site Safety Coordinator on the job and that a Site Safety Manager must be present during construction on projects 15 stories and higher or more than 100,000 square feet. The DOB licenses both categories of safety personnel.

“It’s more of a safety thing than anything else,” Curran said of the contractor registration requirement.

Where quality comes into play

What about an impact on quality?

“Does the fact that you carry a license have any impact on your qualifications? I don’t think so,” said Andru Ramker, president of Hawkeye Construction of South Florida. His company performs work in many states where licensing requirements vary, and he doesn’t believe there’s a difference in skill level.

The primary reason for that, he said, is that the licensee is not usually the one performing the work, at least in commercial applications. Instead, there are layers of employees, subcontractors and independent contractors completing the actual construction. Quality control, he said, often comes down to whether supervisors have the training necessary to recognize if a crew is capable of doing the work.

Ramker added, however, that a positive license history can send a message to customers. “Where it would have an impact is that if a client comes to you and wants to select you, they have the ability to check and see your license is in good standing,” he said.

In Ramker’s case, he has been a licensed general contractor in Florida since 1979, and that demonstrated longevity, he said, can give clients assurance that he’s not going anywhere until the job is done.

“From the standpoint of [many] of us who have a license,” Ramker said, “we have it for all the right reasons and are proud to carry it.”

Florida Condo & HOA Law Blog

Florida HOA’s Can Change Rental Rules

06/23/2017 Joseph Adams
Question: Our homeowners’ association would like to change our current minimum rental period, which is only three days, to a thirty day minimum. If we receive a majority vote for making this amendment, do we have to “grandfather” current owners, some of which own for investing and not for personal...

This is a summary only. Visit http://www.floridacondohoalawblog.com or click the post title for the full entry.

Can I Run for the Condo Board If I Haven’t Paid A Fine?

06/21/2017 David G. Muller
Question:  My condominium association imposed a $500 fine against me in 2016 for an alleged violation of the parking restrictions. I never paid the fine because I disputed their allegation and because the board selectively enforces the parking restrictions.  When I received the notice for the 2017...

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