Archive of ‘News to Know’ category

2018 CREW Network White Paper: Achieving Pay Parity in Commercial Real Estate

CREW Network has maintained its title as the leading producer of research on women in commercial real estate with the newest white paper, focusing on barriers that continue to affect women’s advancement in the industry.

The 2017 White Paper titled Diversity, The Business Advantage: Best Practices for Gender Equity and Inclusion in Commercial Real Estate looked at 10 commercial real estate companies that have benefited from greater gender equity and a more diverse workforce. The 2018 White Paper titled Achieving Pay Parity in Commercial Real Estate builds off the findings of the 2017 White Paper and presents data, expert insight, and action items for companies and women professionals to close the gender pay gap.

The White Paper explains that “pay parity is when employers can show there is no pay gap across the entire workforce between individuals when it comes to gender, race or ethnicity.” The dictionary definition of parity as the “quality or state of being equal or equivalent.” Commercial Real Estate is under more pressure to address equality issues as companies are striving to meet the goals of quality and diversity inclusion.
Below, are the highlights and key takeaways from this year’s white paper:

Facts and Findings
• The gender pay gap in commercial real estate has decreased since the 2005 study, however, it still exists and is strongest for respondents earning less than $100,000 and above $250,000.
• Studies show that women in commercial real estate are 54% less likely to have a sponsor that can provide career advice or help compared to their male counterparts.
• The pay gap widens as years of experience increases.
• The software company specializing in pay data, PayScale, believes women are less likely to ask for raises compared to men, having a cumulative effect on women as they progress in their careers.

Benefits for Women and Companies
• Companies where women account for most of top management show superior sales growth and higher cash flow return on investment.
• The McKinsey Global Institute stated, “if women—who account for half the world’s population—do not achieve their full economic potential, the global economy will suffer.”
• The Institute of Women’s Policy Research noted that the poverty rate for all working women would be cut in half from 8% to 3.8%.
• 25.8 million children would also feel the benefits of equal pay, decreasing the number living in poverty from 5.6 million to 3.1 million.

Achieving Pay Parity
• Each year, Wells Fargo conducts a pay equity analysis of its US employees, which is 93% of its total workforce.
• The analysis is conducted in the fourth quarter, syncing with the annual pay review cycle, and compares the compensation of employees performing the same work to ensure employees are being paid fairly.
• In February 2018, Wells Fargo’s results showed that their female US employees make more than 99 cents on the dollar than their male counterparts.
• The head of compensation at Wells Fargo, Michael Branca, noted the five lessons learned from the process.

1. Equity starts at the top; leadership must have a commitment to reaching this goal.
2. Cultivate and nurture a diverse workforce. It’s important to pay attention to equality with current employees, but it’s important to keep diversity in mind when hiring and training employees to maintain a diverse workforce.
3. Pay equity is an ongoing process; it’s not a onetime event, it is something that must be a long-term commitment and goal.
4. Engage an expert. It’s important to have someone there to advise the work along the way.
5. You must be competitive. Wells Fargo has created three separate programs for employees to use to help balance work and family life that include options for paid parental leave or caregiving leave.

• Adobe reached equal pay in 2017 after reviewing the job structure of their US employees and analyzing the compensation practices and made the appropriate changes.
• Starbucks has reached 100% of pay equity after 10 years of efforts.

Actions Going Forward

Korn Ferry released an article titled “Equal Pay for Equal Work: The Status Quo is Not an Option” and created a five-step process called “EQUAL” that helps identify possible pay gaps and how to address the root cause.
1. Establish Parameters by scoping the work, developing a plan, identifying data, and assessing perceptions
2. Quantify Gaps by analyzing the data, building pay models, and identifying gaps
3. Understand Drivers by reviewing the root cause and analyzing rewards programs, talent acquisition and management, and governance
4. Action Planning by introducing pay remediation and strategy, design, and culture changes
5. Lead Change by aligning leaders, communications, changing road-map, equipping leaders, and keeping a sustained effort. 

You can read the full 2018 White Paper: Achieving Pay Parity in Commercial Real Estate here.

 

A Note from Your President: CREW News and Updates

Hello CREWBaltimore Members,

We had the pleasure of representing CREWBaltimore at the Spring Leadership Summit in Cleveland on June 21-22. We heard a lot of great ideas that we are excited to try in our Chapter. We also have some information from CREW Network that we would like to pass along to our Members.

1. Leadership Summits are not just for delegates or board members. Any member can attend. The leadership summits have time dedicated to leadership development as well as to talking about issues faced by chapters and learning what other chapters have tried with success or hardship. There were over 300 attendees in Cleveland. Convention is wonderful, but you get more in-depth leadership training and knowledge of the business side of chapter management and close contact with CREW Network Board of Directors at leadership summits. Upcoming leadership summits are:

2018 Fall Leadership Summit – San Diego, CA – October 17, 2018 (prior to Convention)
2019 Winter Leadership Summit – New Orleans, LA – February 14 & 15, 2019
2019 Spring Leadership Summit – Kansas City, MO – June 6 & 7, 2019

More information can be found at http://www.crewnetwork.org

2. Speaking of Convention – Who doesn’t want to go to San Diego in October? We hope to see many of you there October 17-19, 2018. As always, this Convention will have great networking opportunities, keynote speakers, and breakout sessions.

3. CREW Network dues will be increasing in 2019. This increase was approved by the Delegates in 2018. The increase is from $180/year to $210/year. Even with this dues increase, CREW Network remains one of the more affordable organizations for individuals in commercial real estate. The CREWBaltimore board of directors will discuss the increase and the impact on our annual dues as we begin budgeting later this year. We will let you know the impact on your cost of membership as soon as the information is available.

4. The topic for CREW Network’s 2018 whitepaper was announced. It will be on Achieving Gender Pay Equality in Commercial Real Estate. CREWBaltimore Member Karen Pecoraro is a chair of the industry research committee and CREWBaltimore Members Michele Cohen and Karen Sugar are on the committee. We look forward to release of the whitepaper in September!

5. Serving on a CREW Network committee is another way to learn more about the Network and gain leadership experience. Applications will open in late summer and are generally due in September. You can learn about committee experience here. Many CREWBaltimore members are currently serving on CREW Network Committees or have served in the past. You do not need experience as a CREWBaltimore board member to apply. We encourage you to consider applying for a CREW Network committee.

There is so much more we could share with you about our experiences at the Leadership Summits and as members of the CREWBaltimore Board. Please do not hesitate to contact us, or any of the board members, if you have questions or would like additional information.

Thank you,


Karyn Tasker
2018 President


Nikkia Fitch
2018 President-Elect

Guest Blog Post: Blockchain and What You Need to Know


by CREWBaltimore Member Katherine Pinkard

You probably heard of the digital currency Bitcoin because of its headline-making and extremely volatile valuation against the U.S. dollar in recent months. But what you may not know is how it works or why it’s so groundbreaking. In case you’re not yet a cryptocurrency-trading-millionaire, what makes Bitcoin possible is the revolutionary software technology upon which it is based, known as blockchain. In their book Blockchain Revolution, authors Don and Alex Tapscott summarize blockchain as “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions, but virtually everything of value.”

The blockchain-based idea for Bitcoin was first released in 2008 via a whitepaper, “Bitcoin: A Peer-to-Peer Electronic Cash System,” by an author known as Satoshi Nakamoto. Since then, others have developed Nakamoto’s idea by creating blockchain, the electronic system that ensures the security and integrity of the electronic data that make up Bitcoin and other, similar digital currencies.

Blockchain is what’s known as a “distributed ledger technology” – essentially a big, shared database, constantly reconciled and updated so that every copy of that ledger is the same and is reconciled. These blocks of digital information are not stored in any one location, but rather on millions of computers all at once, which all agree on each block of transactions in the chain. Thus, no single, central location houses the data, and no governmental entity issues the currency, in theory making blockchain a safer way to transact anything of value and less vulnerable to both hacking, manipulation, and the myriad political factors that can influence the relative values of more traditional currencies.

Blockchain technology is consensus-based, so every computer on the blockchain network verifies that each block is valid and accurate before adding it to the chain. Once a transaction has been added, its electronic record becomes an incorruptible, unchangeable, and a public record of that transaction, which exists forever on that block of the chain. This technology also means that it’s transparent – every computer on the network maintains and can see the record of the transaction.

Why should we, as women in the commercial real estate industry, care about blockchain? Because blockchain is one of the next big technology advancements, it could have a big impact on commercial real estate, and women can play a role in that impact.

In traditional real estate deals, multiple intermediaries – brokers, government offices, title companies, escrow accounts, appraisers, etc. – create friction (and extract payments) that slow the settlement process and increase costs. Blockchain has substantial potential to speed up transactions when buying, selling, and leasing real estate. Moving transactions to the blockchain can create a more efficient and transparent peer-to-peer system that would allow title transfers to be completed quickly and safely, without the need for third-party involvement or verification. 

Does this mean doomsday is coming for many of us in commercial real estate? Almost certainly not. There will simply be more efficient systems to transact real estate business, and the various roles in a transaction will shift and adapt accordingly.

Blockchain allows for the creation and use of “smart contracts,” which execute according to a predetermined, mutually agreed-upon set of parameters and exchange of value. Transactions would be transparent and verifiable, drastically reducing fraud and non-performance. Common tasks like collecting and paying rent, returning security deposits, and managing contract terms would become more streamlined and transparent, which would be especially helpful across international borders.

While it’s currently possible to pay rent, send a security deposit, or buy a property with electronic funds transfers from your laptop via a bank transfer, or through PayPal or Venmo from your smartphone, the “smart contracts” that utilize blockchain and cryptocurrencies are more than just electronic payments. All of the transactional terms of the lease—from the initial security deposit, to maybe a few months of free rent or tenant improvement allowance payments, standard monthly rent payment, annual rent escalations, tenant billing obligations, and the lease termination or renewal and security deposit refunds—can be coded into the cryptocurrency token contract to automatically execute when each condition, be it lapse of time, receipt or payment of money, or other conditions, is met. This mechanism can help to prevent fraud on both sides of a transaction and transparently ensure the mutually agreed-upon conditions are fulfilled by both sides. Further, the parties to the transaction do not have to depend on a trusted third party (such as PayPal or a bank) to guarantee and verify the transactions and to provide any necessary proof of funds. While cryptocurrencies have their challenges due to still being very new and evolving, they offer many advantages over existing systems both from a technical standpoint and from a transparency and efficiency standpoint.

There are many more ways that blockchain will transform our industry. From transacting real estate using cryptocurrencies such as Bitcoin, which allows us to cross borders and more freely transact across the globe, to issuing token-backed real estate funds, allowing fractional ownership in newer, more transparent and efficient ways, I believe that we will continue to see more growth and rapid development using blockchain in the coming years.

So who is actually working on applying blockchain technology to commercial real estate? The technology may still be in its nascent phase, but success stories abound and the future looks bright. Currently, the state of Vermont is working with tech startup Propy to be the first state to successfully pilot a program to record land and property transactions using blockchain. Other start-ups continue to pop up around the world like Ubitquity engineering a blockchain system to securely record and track property title and ownership; Rex MLS creating a new multiple-list service; Propify rethinking how real estate is marketed; Factom ensuring and validating digital assets; RealBlocks tokenizing real estate assets; and BuildCoin changing how public-private construction and infrastructure projects can come together more efficiently and with greater transparency.

So how would a blockchain system differ from other electronic systems that have existed, such as a Torrens? Blockchain would not be dependent on a trusted third-party (a government, municipality, etc.) to verify and guarantee title to a property. A blockchain-based system is different because of its trustless, distributed, and transparent nature. A blockchain system could make a U.S.-based title system more efficient and transparent, but also change the game in the developing world where there is much greater opportunity for government-sponsored fraud and deception related to private property rights and ownership.

It’s certainly still the Wild West when it comes to blockchain and the commercial real estate world. We’re some ways off from full enterprise-level development and adoption, and we don’t know exactly what that will look like when the time comes. But it is imperative that women play a significant role in shaping this next phase of the intersection of technology and commercial real estate. Seek to actively learn about this new technology so that you can participate in its development and application. New technology means opportunities to get in on the ground floor and have an impact on early development. 

If you can dream it, VR can make it

Technology is a huge part of everyday life for each of us.  Businesses that embrace the newest forms of technology give themselves an edge over competitors and provide services to their clients that revolutionize the way business is done.  The commercial real estate market is no exception.

While the internet and social media have presented numerous opportunities for businesses to grow without ever having face-to-face contact with a client, a newer form of technology known as virtual reality has the potential to make an even bigger impact on marketing and sales within the industry. 

Virtual reality is a three-dimensional environment generated by a computer which can be viewed and interacted with by a person with special equipment, such as a headset and speakers. The computer generated environment replicates a real environment, generates realistic images and sounds and allows the user to look and move around within the artificially created world.
 

This technology presents a wide array of advantages within the commercial real estate industry, as it can be shared through web applications, email and mobile devices.  It reduces time required to design a project because all important team members can access the technology from their own location on their own schedule.  Plans come together quickly and changes to existing designs and plans can be viewed, analyzed, and made at a quicker pace. Clients can tour a property virtually and see and experience a space without ever leaving their office.  It can often be difficult for a client to step into an undeveloped space and envision the final layout.  However, with virtual reality, clients can instantly have an accurate depiction of the space and depth of an area, including the space’s dimensions, flow and possibilities.  This is something that doesn’t convey as well with a drawing or a video.  Virtual reality can also provide a useful tool in the decision-making process, as potential clients can show the space to others who may not otherwise be able to physically visit the property.  They say a picture is worth a thousand words, but a three-dimensional first-hand virtual tour is something no amount of words can convey as well. 

It appears this technology is growing rapidly and will be used on a widespread basis in the future despite several disadvantages. The most important of these may be cost, as companies are required to purchase software and equipment that is powerful enough to capture a three-dimensional video and is compatible with the required accessories, such as a headset and speakers.  Some companies may choose instead to work with a virtual realty production company, which could be costly. In addition, some people who use the systems have reported motion sickness or a dizzying experience after several minutes of using the technology.  Despite these factors, the industry is moving in this direction.

Numerous commercial real estate companies across the country are already taking advantage of this technology by offering virtual tours of properties under construction.  With drone technology and digital video becoming more widespread, the possibilities for sales and marketing within the commercial real estate industry of the future appear to be endless.  Business owners would be wise to embrace this technology so they are not left behind.

CREWBaltimore plays part in the CREW Network White Paper release

It is no secret that our Chapter is abundant with wise, talented members who are engaged in the overall mission of this organization, so it was no surprise to see two of our local women step up and join the CREW Network Industry Research Committee. Michelle Cohen, principal at Miles & Stockbridge P.C., and Karen Pecoraro, ATC Group Services LLC, volunteered on the committee in 2016 and relayed back to us some inside info on what really went into this year-long project.

Here’s what they have to say about the experience:

What support went into making this happen? This full year project was based on work done by CREW Network in 2015 as part of its industry survey – we used the results from that survey to create the topics for the white paper and as part of the basis of our research.  Committees of 20 members each, including representation from the CREWNetwork board and staff, divided into smaller teams for research (gathering information to support the thesis from our survey findings), editorial (writing and editing the paper) and outreach (generating internal and external publicity once the paper was distributed).

How can members get involved in a project of this magnitude? The industry research committee is one of several CREWNetwork committees. Any CREW member can apply for a position on this or another committee by providing information regarding their expertise and skills and how their experience makes them a good fit for a particular committee. For example, referencing specific research and/or writing skills if you are applying to participate on the industry research committee. CREW Network also looks for  participation in internal/external organizations (other than CREWBaltimore) where you have worked on related issues.

Did you learn anything throughout the process? Some of the research was fascinating, particularly as it related to self-bias. Learning what internal factors cause women to stop reaching for the executive suite and how much of this is tied to our own perceptions and needs (rather than external factors).

Following the release of the 2015 Benchmark Study Report: Women in Commercial Real Estate, CREW Network focused on digging deeper into issues that persist and stymie women’s advancement in commercial real estate. Closing the Gap: Addressing Gender Bias and Other Barriers for Women in Commercial Real Estate, CREW Network’s 10th annual white paper, details both statistical data and personal accounts previously unmeasured and unrecorded in our industry – and largely unaddressed.

To gather more detailed and anecdotal data on the commercial real estate workplace in 2016, CREW Network conducted an industry research survey and several interviews. A total of 1,019 industry professionals – both men and women – participated in the survey, which included questions about gender bias, compensation practices, mentoring and sponsorship, ageism and the aspiration gap. 

Read the 2016 CREW Network White Paper “CLOSING THE GAP: Addressing Gender Bias and Other Barriers for Women in Commercial Real Estate” here.

Key Messages of the White Paper:

  • Nearly 2,200 comments and open-ended responses detailed both positive (mentor success stories, supportive environments and workplace practices) and negative (blatant gender bias, unequal benefits and exclusion) experiences in commercial real estate. 
  • While women are gaining ground in the male-dominated commercial real estate profession (as evidenced in the 2015 Benchmark Study Report), the majority are experiencing advancement barriers including gender bias.
  • Of 1,019 commercial real estate professionals surveyed, 65% have personally experienced or observed gender bias against women in their workplace in the last five years.
  • 55% have personally experienced or observed gender bias against women outside of the formal workplace in the last five years (i.e. women excluded from colleague sporting events, hunting or golf trips).
  • 91% of respondents said they have not displayed gender bias against a woman as a hirer or manager in commercial real estate.
  • 32% of respondents believe the lack of support for women in the C-Suite and/or at home is the #1 reason for the industry’s aspiration gap; the second most popular response (26%) was that women believe being in the C-Suite will adversely affect their commitments and responsibilities outside of work.

What We Need From Our Industry Leaders Going Forward

  • Be honest (with yourself) about bias in your hiring, promoting, assigning of challenging projects, compensation practices and inclusion in high-profile client relationship development. Utilize an assessment tool and engage a diversity consultant to recognize bias, take action to overcome it, and put accountability measures in place.
  • Support women in your workplace and speak up when you see biases or unfair treatment. Seemingly small and consistent actions can have a huge impact.
  • Make mentoring and sponsorship of women a priority. Encourage women to strengthen and expand both their internal and external networks, and ensure that mentoring and sponsorship activities include building relationships with high-profile/high-value clients. Mentors and sponsors should also help women become more comfortable with taking the risk of moving to new companies and accepting commission-based compensation in order to advance in their careers.

Donations made to the CREW Network Foundation make it possible to fund industry research and allow CREW Network to remain the leading publisher of research on women in commercial real estate- research that is helping to close the compensation and advancement gap for women. In non-benchmark years the organization budgets approximately $25,000 for industry research expenses and in benchmark years that figure is closer to $67,500. Join us in completing the Chapter Challenge by donating today through this link, CREWbiz or when you check out for your next event registration. For more information regarding the use of Foundation funds, you may contact CREWBaltimore Outreach Committee Liaison, Kim Hogan, Cushman & Wakefield.

CREW Network Social Media Playbook

CrewBaltimore is excited to announce the CREW Network Social Media Playbook! This brand new guide was created to help chapters implement best practices in their social media strategies, and help members understand the basics of modern communication. As a leader within the  CREW Network Community, CREWBaltimore is proud to have contributed our Public Relations Committee’s efforts on the chapter’s use of Facebook, Twitter, Instagram, and of course, our incredible content-rich blog! We encourage you follow us on social media and use this guide to enhance your own knowledge of social media and take pride that you are a member of one of the most advanced chapters in communications throughout       CREW Network!

Find the Social Media Playbook Here!

(Please note, you must be a member and signed into CREW Network to view)

CREW Network Foundation – What It’s All About

Many of you have seen our posts on LinkedIn concerning the CREW Network Chapter Challenge – and thanks to your support, CREWBaltimore has completed all three goals! The goals are outlined below as a recap.

Goal 1: Chapter to contribute at least $1,000 directly to CREW Network Foundation

Goal 2: Have 100% of your Chapter’s Board give an individual donation

And Goal 3: Have 50% of your Chapter’s membership give an individual donation

But why was completing all three of these goals, and hence the Chapter Challenge, so important? And what does the donated money fund? The Chapter Challenge is an initiative created by CREW Network Foundation to introduce women to commercial real estate (CRE) and opportunities available in this industry. Specifically, Foundation is the charitable arm of CREW, and supports the career success of women through scholarships, industry research, and career outreach.

Since 2008, Foundation has awarded scholarships to 91 women totaling $685,000. These scholarships are designed to encourage women to “pursue an education that will lead to a career in the commercial real estate industry” by giving them a paid internship opportunity, an 18 month CREW Network membership, and matching them with a CREW Network mentor.

In 2015, CREW Network released its third industry survey, funded through Foundation, in the 2015 Benchmark Study Report. The study examined compensation, experience and position, and success and satisfaction for women in commercial real estate, and compared the findings with the results from the 2005 and 2010 surveys. The largest inequalities between men and women are still the income gap and the number of women in C-suite positions, although progress has been made over the past 10 years.

Foundation also supports career outreach by creating programs that “educate women and girls about the career opportunities available to them.” At our local level, the CREWBaltimore Outreach UCREW committee has partnered with the Johns Hopkins Carey School of Business to host the UCREW program. The event allows students direct interaction with current CRE professionals who can provide insight and advice about opportunities in the industry post-graduation. The event has taken many forms, including a speed dating session with different representatives from each trade available to talk with students, and a Q&A panel with industry leaders.

Both CREW Network Foundation and our CREWBaltimore Outreach committee greatly benefit from the expertise and generosity of our members. Once again, thank you to our 70 CREWBaltimore members who donated to CREW Network Foundation. Supporting these initiatives accomplishes lasting changes for women in CRE, and gained us recognition as one of the chapters to complete all three challenges!

*Data and quotations taken from the 2015 CREW Network Foundation Annual Report and CREWNetwork.org

2016-chapter-challenge

News to Know – 10 Things That Can Go Wrong on Construction Projects

10 Things That Can Go Wrong on Construction Projects

C. Jaye Berger, Esq.

C Jaye Berger head shot

C. Jaye Berger, Esq. is the founder of Law Offices C. Jaye Berger, a New York City law firm specializing in real estate, construction law and litigation. Berger handles construction contracts, disputes and litigation; commercial and residential closings; leases, business contracts and other business related matters. She is a member of CREW New York.

 


 

There are certain types of problems that seem to arise with regularity on both residential and commercial construction projects without regard to the city or state. If you see the warning signs of any of these problems, you may be able to prevent the problem or do something to mitigate it before it escalates. Here are some situations to consider:

 1. The general contractor and the subcontractors stop showing up regularly and little work is being done. Sometimes there is just one lonely painter showing up on the job site. This can mean that these companies are angry about not being paid or that they are busy on a new project and are not giving your project the time and attention it needs, but want to make an “appearance.” This can result in the project falling into the “grey zone” where it lingers on and on and never seems to end. This situation cannot continue and requires immediate consultation with knowledgeable legal counsel to review the contract and any options.

“Slow or stalled payment is rarely due to lack of funds. Usually it is a sign that something bigger is wrong on the project.”

2. The owner slows down with paying the contractor. Slow or stalled payment is rarely due to lack of funds. Usually it is a sign that something bigger is wrong on the project. It may not be progressing on time or is costing more than expected and the client is silently brooding about it by not paying the contractor. As a contractor, the problem should not be brushed aside. Sitting down and trying to talk it out can be more productive than filing mechanic’s liens, slowing down the work or using threats.

3.The general contractor tries to quit. He sits the owner down at a meeting and says he wants “out” and tries to make it sound as though the owner is really at fault. This is usually a sign that he has underbid the job and it is taking longer than he planned. He wants to start a new, more lucrative job. Sometimes this is met with enthusiasm from the owner who can make better and sometimes less expensive arrangements to finish. This strategy only works when there is so little work left on the job that the owner makes a judgment call that litigation would not be worth it. However, usually there is still a lot to be completed and re-done and it often does lead to litigation, because it will probably cost a lot more to finish the job with a new contractor due to this breach of contract.

Construction crane

 4. A leak occurs and the project site and other areas in the building are damaged as a result. Everyone on the project should have their certificates of insurance and alteration agreements ready in their files. There may be multiple insurance policies that might apply, since there are various subcontractors, tenants, shareholders and others in the mix. There may be overlapping policies and the project still needs to be completed and the damage repaired. Sometimes the original contractor handles the completion of the project while the insurance companies are sorting out the damages. Legal counsel must be contacted immediately to handle communications with the insurance companies and counsel to the various parties involved.

5. A mechanic’s lien is filed against the building by the general contractor, a subcontractor, materialman or an architect. This is usually the tip of the iceberg. It may mean that the general contractor is using the money he has been paid by the client for purposes other than the project and is not paying the subcontractors and suppliers on this project. It also shows that the owner has not been obtaining waivers of mechanic’s liens throughout the project.

6. The owner is unhappy with the quality of the work. Walls are crooked. Doors don’t close well. The millwork does not fit properly. This may indicate that shop drawings have not been prepared and reviewed. The architect or interior designer may not be coming by to observe the work frequently enough. This may be due to the owner not wanting to pay for this service and services may need to be added.

7. The general contractor and the architect do not get along. The general contractor is refusing to follow instructions and thinks he knows better and that the architect is being too fussy. Architects and contractors are not paired up based on compatibility. Often they have very different styles of working. Sometimes this can lead to problems, since a key player cannot be fired just because someone cannot get along with them. This is a good reason to consider interviewing professionals who may have worked together successfully in the past.

Construction vertical

8. The job never ends. A six-month job turns into a “one year and counting” job. Often the owner has not consulted with an attorney yet. This goes back to the provision in the contract for completion time. Sometimes it turns out that the parties do not have one or have not included liquidated damages. This is important not only for the owner, but may relate to provisions in the Alteration Agreement in a co-op or Work Letter in a commercial lease for per diem damages to the building due to late completion.

9. An accident occurs on the job and a workman is injured. Legal counsel should be contacted immediately for guidance. Prompt notice to the appropriate parties is crucial in order to comply with certain insurance policy requirements and prevent disclaimers of coverage due to late notice. Sometimes people think the problem is not that bad and that nothing will come of it, so they do not report it to the insurance carrier. When a lawsuit is commenced a year later and the insurance carrier is contacted, they may claim they did not have appropriate notice of the “occurrence” and will likely disclaim coverage.

 10. Having insurance does not mean that there will be coverage for every situation. A common example is when an employee of the contractor or subcontractor is injured. There may be a policy exclusion. Other times there may be a disclaimer due to late notice. In certain situations, an attorney will need to commence a special lawsuit to ask the court to determine the rights and obligations of the parties.

This article was originally posted on CREW Network.