What Are the Most Common Causes of Construction Disputes?

In Maryland, the construction process is largely smooth. However, there can be problems even with the most well-organized construction projects. Many parties are involved in construction projects, ranging from contractors and subcontractors to property owners. With so many parties involved, the circumstances are ripe for disagreements.

In addition, a substantial amount of money is involved in new construction as well as remodeling projects. Disputes commonly occur in construction projects due to the large sums of money involved, and the complexity of new builds and remodeling work.

Common Disputes in Construction Projects

There are various reasons due to which construction disputes arise. But there are some commonly occurring disputes that arise during ongoing construction projects. The following are some of the most common reasons for construction disputes:

Disputes over Contract Terms

The reasons for a conflict over the contract terms may be unique in every case. For instance, conflicts over insurance agreements can be a reason for contention. One of the parties involved in the project may feel that they deserve some compensation while the other party or the insurer may disagree.

Contract disputes can also manifest themselves from disagreements on each party’s scope of work. This is one reason why a proper understanding needs to occur before the project begins. Moreover, one party may feel that the assigned tasks are not a part of their job description and demand higher pay for the completion of these tasks.

Disputes over Construction Quality

It is a judicious idea to develop a detailed contract that explains precisely what the construction work will involve. However, conflicts commonly occur on whether a contractor provided an acceptable standard of workmanship.

If developers and property owners do not find the work provided by a contractor or subcontractor to be of an appropriate standard, they can sue those who completed the sub-standard work. A contractor may also file a lawsuit if a customer refuses to pay for work they believe to be substandard.

Disputes over Materials Used

This source of conflict is related to disputes on construction quality. A comprehensive construction contract can help mitigate the risk of the occurrence of such disputes. But if a contractor does not use the materials enlisted in a contract and instead, uses lower quality material or any material unacceptable to the property owner, it can give rise to conflicts.

Disputes over Delays in Construction and Timelines

Often, construction work takes much longer than expected. A property owner or developer could file a lawsuit if a contractor or subcontractor does not deliver work by mutually agreed-upon deadlines specified in the contract. Even in the absence of specific deadlines in a construction contract, the work should be performed in a timely and effective manner.

Disputes over Construction Project Abandonment

Sometimes a property owner may feel that a contractor has abandoned the project prior to completion, which often leaves the owner suing to recover money paid for unfinished work and left in a position where substantial additional funds need to be paid for the work to be completed as required.

Disputes over Nonpayment

At times, a contractor or subcontractor delivers satisfactory work using good quality materials, but the property owner does not pay as agreed upon. In these situations, contractors can sue the property owner for nonpayment. Another way for contractors to get a property owner to pay is through Mechanics’ liens. The contractor could place a lien on the owner’s property until the unpaid amount is not cleared in full.

Before starting any commercial or residential construction, it is vital to have a comprehensive construction contract in place. In addition, if you feel you have a problem on hand, you should promptly consult an experienced construction dispute lawyer.

Reasons for Construction Conflicts by Clients

  • The mentality to get the lowest price when hiring a contractor
  • Inadequate management supervision
  • Failure to respond on time
  • Contract document discrepancies
  • Poor communication
  • Failure to engage a project manager

Reasons for Construction Conflicts by Contractors

  • Poor understanding and lack of agreement in contract procurement
  • Delays in execution of work
  • Failure to comprehend and appropriately bid or price the works
  • Improper CPM scheduling and update frequency
  • Inability to plan and execute changes of works
  • Being reluctant in seeking clarification

Reasons for Construction Conflicts by the Consultants

  • Increase in costs due to over design
  • Failing to understand its scope of responsibilities under the design team contract
  • Changes due to design errors
  • Incomplete drawing and specification
  • Design and specification inaccuracy and mistakes or omissions from specialists

Legal Help from an Experienced Construction Disputes Lawyer in Maryland

At Evans Law, our Maryland construction disputes lawyers offer solid legal guidance on conflict resolution to property owners, contractors, subcontractors, and developers, among others.

In order to save money and resolve your construction-related problems as soon as possible, our skilled and knowledgeable attorneys can help you identify the most effective techniques to settle the disputes that have arisen. To learn more and speak to an experienced construction dispute attorney, call today at (410) 626-6009.

Buying a Vacant Lot to Build a Home – What to Watch Out For

If you can’t find your dream home, you might have decided to create paradise from scratch by purchasing some vacant land and constructing a house. But before you get serious about looking at vacant lots, it’s important to know what surprises a transaction like this might bring to the table.

Dealing with a land purchase comes with its own set of complexities that range from zoning and easement restrictions to the property’s environmental conditions. Some of these issues can be costly and will transform your affordable new home project into the stuff of financial nightmares. Before you start down this path, here are several things to watch out for when you buy a vacant lot.

Review Local Government and Amenities

The first place you should start is at the town or city hall where the vacant lot is located. When you buy a piece of land to build a home, you will want to investigate many of the same issues that you would if you bought an existing home.

Some of the things that you should research online and figure out downtown include:

  • How are the schools in the area?
  • Is the local government well-run or are there budget and infrastructure problems?
  • What is your proximity to shopping, healthcare, and entertainment venues?
  • Is there public transportation?
  • What about parks, recreation, and other green spaces?

Understand Zoning and Environmental Issues

You also want to find out if there are going to be any zoning or easement issues where you wish to build. Is the land already zoned for a single-family home or will you need to apply to have this zoning changed? If you have to change it, find out what expense is involved. Also, find out about future zoning projects. You may not wish to build a home next door to where there is an airport or shopping center planned.

Is your land subject to an easement? What this means is that there might be a road going through the land that you will share in the cost to maintain. Do neighbors have the legal right to cross your land?

If you are building in the country, there may be some environmental issues that could be costly. If you are planning to change the elevation of the land, can you do this and how much will it cost? Are there any environmental hazards on the land or protected wildlife or wetlands that will prevent you from carrying out your plans?

Check Out Land & Building Permit Obligations

Finally, before you buy any vacant lot to build a home on, you should make sure that you will be able to get all of the approvals and permits associated with your project. These include but may not be limited to:

  • Public Water & Sewer. Does your land already have access to the town or city water and sewer service? If a hookup is available, confirm that you will be permitted to do this. If not, you will have to explore other options.
  • Private Water & Sewer. Even if you decide on a private well and septic system, getting a permit for these isn’t guaranteed. State and local regulations will determine your eligibility based on factors such as soil quality, distance from lot lines, and height of groundwater.
  • Building. Confirm that you will be able to access the building permits for the size and type of home that you want to have built on the lot.
  • Title issues. Research the historic ownership of the land to make sure that there aren’t any issues with the title that could jeopardize your purchase.

Experienced Real Estate Attorneys in Maryland and Washington

Real estate matters can be complicated, and this is particularly the case when you are dealing with issues related to land development. At the Evans Law, our real estate attorneys have more than 20 years of combined experience assisting clients with a variety of real estate issues.

Contact our office now at 410-626-6009 or reach us online to schedule a consultation and learn more about the ways our qualified legal team can protect your rights and help you achieve your goals.

3 Legal Issues to Consider Before Listing Your Home

Perhaps you’ve finished all the remodeling projects, updated the appliances, and applied a fresh coat of paint to your home, and you think you’re ready to call a listing agent to put your home on the market. Before you do, there are a number of important legal issues for you to consider, many of which will need to be resolved before you can sell your home, and some of which will simply be easier to resolve before your home is sold. Read on to learn about the top legal questions you’ll need to resolve before you sell a house in Maryland.

        1. Figure out how the sale proceeds will be divided

Perhaps you share your home with a romantic partner to whom you’re not married. You may have contributed to the mortgage or to other household expenses, but do not have your name on the deed. While it’s unpleasant to consider, now is a good time to create an agreement laying out the share of the proceeds to which you’re each entitled. This amount should not only include any payments you made toward the mortgage, but also the amount you paid toward renovations, as well as the value of the time you spent doing work on the property. A knowledgeable real estate attorney can help you determine the value of your contributions and can draft an agreement that provides a legally-binding division of the proceeds.

         2. Any liens against your home must be resolved

If you’ve faced any major consumer debt while you’ve owned your home, and one of those creditors succeeded in a legal claim against you based on the debt, there may be a lien filed against your home. Likewise, unpaid taxes, child support, or alimony could also result in liens against your title. You’ll need to resolve these outstanding debts before you’ll be able to sell your home.

         3. Make sure you have copies of or can locate all the documents you’ll need

There are so many important legal documents that you’ll need to have on hand before you sell your home, such as a copy of your deed, any land surveys, contracts with tenants or co-owners, or any restrictive covenants that apply to your property. Since you may need to order copies of some of these documents, make sure to begin the process of gathering what you need well in advance. An attorney can walk you through exactly what you’ll need when selling your home.

For assistance with questions regarding real estate transactions, contract disputes, or land use in Maryland, contact the knowledgeable and detail-oriented Annapolis real estate attorney Matthew S. Evans III for a consultation, at 410-626-6009.

What is the Process for Obtaining a Zoning Variance?

When purchasing commercial real estate with the intention of using it for a new business, it can be difficult to find a property that perfectly suits your needs. You may find the ideal property, only to learn that the parcel’s zoning requirements would prevent you from designing the ideal structure to house your business. With skilled legal help, you may be able to nevertheless execute your vision for your commercial property by seeking a zoning variance. Learn more about obtaining a zoning variance below, and speak with an experienced Maryland real estate attorney for further assistance.

Zoning basics

Every county dictates the permissible uses of each parcel of land through its zoning code. The zoning code identifies which property can be used for commercial, residential, industrial, or mixed use. Within this zoning code, counties will also apply certain zoning regulations or ordinances on how the land may be used. Examples of zoning regulations include limits on building height, the setback distance, parking requirements, and density of development. Zoning variances allow property owners to obtain exceptions to the zoning regulations applicable to a given lot. Changing the permissible use of a lot, i.e. from commercial to residential, is known as rezoning. We’ll discuss rezoning in a future post.

What is the process for obtaining a zoning variance?

In order to obtain a variance, property owners will have to prove to the local zoning board why a variance is necessary to make optimal use of the lot. Property owners will need to prove that there is no way to develop the property without the variance, and that it will not harm the character of the neighborhood or the use and development of neighboring lots. Owners seeking a variance will need to post details of the requested variance on the property, so as to provide notice to neighbors.

Zoning variances are typically the subject of a public hearing, where the property owner will have the chance to explain the need for the variance, and members of the local community and zoning board can learn more about the proposed plan for development or present reasons why they do not feel that it should be granted. Due to the importance of these hearings, many property owners choose to be represented by an attorney at these hearings. Decisions on whether or not the variance will be granted are issued within a short time after the hearing.

Lots located in areas subject to environmental protections will often need to meet higher standards to prove that a variance will not cause excessive environmental harm to the area. For those in Anne Arundel county, special rules on obtaining variances apply when a lot is in a bog protection area or within 1,000 feet of tidal waters, considered to be the Chesapeake Bay Critical Area.

For assistance with applying for a zoning variance, or if you are facing another legal issue regarding commercial real estate in the Maryland or Washington, DC area, contact the experienced and knowledgeable Annapolis real estate attorneys at the Law Offices of Matthew S. Evans III for a consultation, at 410-626-6009. 

Investing In Commercial Real Estate for the First Time

Perhaps you’ve long wanted to generate a revenue stream from real estate investments and finally have the capital to do so, or perhaps your investments have so far been more hands-off, but you’ve found an opportunity to buy that’s too good to pass up. Real estate can be a stable investment alternative to an uncertain market. If you’re planning on purchasing real estate for investment purposes for the first time, there are certain things you should know to ensure that your interests —and money—are protected. Read on to learn important tips for first-time real estate investors in Maryland.

Ask lots of questions about the property and where it’s located: It is critical that you understand the history of the property you’re considering, any defects, and any features which will need to be repaired before it can begin to generate income. Additionally, you’ll need to look into the neighborhood in which the property is located—are businesses flocking to the area, or moving away? What are the crime rates in the neighborhood? Are there unusual or restrictive zoning laws? Are there any upcoming construction projects which could affect the neighboring real estate values?

Do the math on the complete costs of the property: All real estate purchases involve more costs than the initial asking price, but investment properties go beyond a standard home purchase in supplemental costs. Be sure you understand the additional costs of insurance, regular repairs, landscaping, and a property manager, as well as any prepayment penalties or short-term financing costs, if you’re planning to quickly “flip” the property.

Understand the liability involved with an investment property: Any real estate ownership brings some risk of liability, since property owners may be liable for injuries that occur on their land. These risk can be even greater where the owner doesn’t occupy that property and cannot personally inspect it for hazards. Be sure you’ve found a skilled attorney who can represent you in any actions for civil liability prior to making a purchase, and have your attorney explain the particular liability concerns for the types of property you’re considering before you invest. For example, the risks of liability will be very different for an apartment building full of tenants, as compared to a retail store front occupied by a business.

Get help from professionals: As when embarking on any new endeavor, you should surround yourself with people who know more than you and can support you as you learn the ropes. This means consulting with an experienced sales agent and seasoned real estate attorney who can guide you through the process of making a sound purchase.

For assistance with real estate and real property legal questions in Maryland, contact the effective and seasoned Annapolis real estate lawyer Matthew S. Evans III for a consultation, at 410-626-6009.

Disclosure Obligations in a Maryland Home Sale

If you’re attempting to sell a home or condo in Maryland, you want your home to appear perfect and move-in ready to potential buyers, so that you can get the sale price you feel that you deserve. Defects in your home, even if they’re small and inconsequential, could scare off skittish buyers, so disclosing every little issue in your home could unnecessarily impair your chances of making a sale. That said, Maryland property sellers have to make certain mandatory disclosures under the law as to any major defects in the property they wish to sell, and could face legal action if they fail to disclose a defect that a buyer later discovers. Learn more below about the process of making disclosures in home sales under Maryland law. 

In Maryland, home sellers have the option of either disclosing known defects in the home or providing a buyer with a disclaimer regarding the condition of the house. However, sellers cannot do both. Whether or not you choose to provide a disclaimer regarding the home’s condition or a full disclosure of the home’s defects may depend on the real estate market in your neighborhood. If buyers have become accustomed to receiving a full disclosure of known defects from the other homes they’ve viewed in your area, they may not be satisfied to receive only a disclaimer regarding your home. The specific defects in your home may also influence your choice toward one disclosure method or the other. Home sellers are required to complete the Maryland Residential Property Disclosure and Disclaimer Statement to be provided to any potential buyer, with sellers completing either the disclosure or disclaimer portion of the form, depending on what they choose.

The disclaimer statement provides that the seller is selling the home “as-is,” and provides no warranty that the home is in good condition. This means that buyers cannot take legal action against a seller should, for example, a major pipe burst in the home shortly after the sale. That said, sellers remain obligated to disclose any “latent defects” in the home—defects which a potential buyer would not be able to uncover through a visual inspection—of which the seller has actual knowledge. In other words, if a seller had a problem with their HVAC system and was recently told by a repair contractor that the system would soon need to be replaced, they could be held liable for failing to disclose that fact in a disclaimer.

The disclosure form asks the seller to state whether there are or are not any major defects in various parts of the home, such as the foundation, roof, plumbing, electrical system, or structural systems. Sellers will have an opportunity to explain what sort of defect is present. The form will also ask questions about any zoning or renovation limits on the home, and whether the seller has had to contend with wood-destroying insects or the presence of hazardous materials. A knowledgeable Maryland real estate attorney can walk you through the completion of a disclosure or disclaimer form.

If you are in need of legal help with a real property issue, sale contract, or landlord/tenant issue in Maryland, contact the knowledgeable and experienced Annapolis real estate attorney Matthew S. Evans for a consultation, at 410-626-6009.

New Federal Rules on Discrimination in Housing, with Impact on HOAs, Established

On October 14, 2016, new rules created by the Department of Housing and Urban Development (HUD) on the topic of harassment in housing entered into effect. These rules define the claim of “hostile environment harassment” and establish a protocol for how such claims should be handled.

For years, homeowners and tenants who believed they were facing harassment due to their race, color, national origin, religion, sex, disability or familial status had the right to make a claim for that harassment in court. However, while these claims were based on the Fair Housing Act, they were evaluated in court based on the same standards included in the Civil Rights Act regarding harassment in the workplace. HUD created the new rules to tailor to the particularities of those facing discrimination in the housing setting.

Under the new rules, residents will be able to make a claim in court that they are facing “hostile environment harassment.” This is defined by the law as:

Unwelcome conduct due to race, color, national origin, religion, sex, disability or familial status, is sufficiently severe or pervasive as to create an environment that unreasonably interferes with the availability, sale, rental, use, or enjoyment of a dwelling, the provision or enjoyment of facilities or services in connection therewith, or the availability or terms of residential real estate-related transactions.

Residents who claim that they have faced harassment will need to show that they were subjected to unwelcome spoken, written, or physical conduct; that the conduct was the result of their race, ethnicity, gender, or another protected trait; and that the conduct was severe or pervasive enough that it interfered with the resident’s ability to use and enjoy their housing or other facilities. This harassment could take the form, for example, of vandalism, threats of physical harm, threatening imagery, or actual violence.

The rules obligate homeowner associations’ (HOAs) directors and officers to investigate claims of harassment among homeowners or tenants. Should HOA board members and officers be found to have contributed to the hostile environment harassment, to have failed to take any necessary action to prevent harassment occurring within the complex or development, or failed to prevent a third party such as a management company from engaging in harassment, then the board members and directors can face personal liability under the new law, as can the HOA. If you are a member or director of a Maryland HOA, speak with a real estate attorney to learn what you should do to be prepared for this change in the law.

For assistance with real estate matters in Maryland, contact the experienced and knowledgeable Annapolis real estate and construction law attorney Matthew S. Evans III for a consultation, at 410-626-6009.

New Law regarding Quiet Title About to Take Effect in Maryland

As we discussed in a prior post, there are three types of real estate deeds, each offering the deed-holder different rights and degrees of ownership of the property described. There are times when an owner discovers that they do not, in fact, hold a general warranty deed, but believe that they are entitled to hold complete and total ownership over property. In this situation and others, the owner would likely file what is known as an action to quiet title. The Maryland State Legislature recently passed a new law governing actions to quiet title which will go into effect on October 1, 2016. Learn more about quieting title and the changes brought by the new law, below.

Actions to Quiet Title

The fundamental purpose of an action to quiet title is to clarify what rights of ownership the person bringing the action holds over a given piece of land. Generally, owners file quiet title actions after some other individual or business entity claims to have a partial or total ownership interest in that property. A “cloud on title” is the term used to describe some assertion of ownership interest in a property that interferes with the complete ownership of the current deed-holder.

Title searches are part of the process of purchasing property. In a title search, an attorney will examine the public records on the property to determine if there are, for example, any unpaid liens against the property or loans taken out against the property, and to ensure that the chain of title (i.e., the history of prior owners) is clear and complete. While these searches are largely successful in determining that the buyer would have complete ownership free of liens or encumbrances, sometimes things manage to slip through the cracks. For example, a lien may not have been properly recorded against the property, making it so that the title search did not uncover it at the time of purchase. The owner would file an action to quiet title to clarify that they are the sole owner and are not responsible for the lien. Alternately, if the owner was unaware of an easement (i.e., a right of the government, the public or a private party to access a portion of the property), the owner could file an action to quiet title to clarify the existence or extent of the easement. In order to avoid these sorts of disputes, buyers typically purchase title insurance, so that the insurer is tasked with litigating quiet title actions.

What will the new law do?

In Maryland, owners had the right to bring quiet title actions for many years, but there was no section of the Maryland code of laws which directly addressed what was required to bring a successful action to quiet title. This resulted in uncertainty, especially for title insurance companies. These companies sometimes declined to insure title if they were unsure whether the title would later be challenged. Now, the process for filing an action to quiet title will be laid out in the law, eliminating the uncertainty surrounding how these lawsuits work and what the owner needs to prove to be successful. Additionally, the law clarifies what the effects are of a judgment in a quiet title action. Overall, the law should offer greater assurances to a good-faith buyer that their title is free of any liens, encumbrances, or other defects.

If you are in need of a Maryland real estate attorney for a purchase, sale, or quiet title action, contact the knowledgeable, experienced, and trial-ready Annapolis real property lawyer Matthew S. Evans III for a consultation on your claims, at 410-626-6009.

Is a Short Sale a Good Option for Me?

If you’re in the market for a new home in Maryland, you may have seen homes listed as “short sales,” but you may not have had a chance to learn more about how these sales differ from conventional home sales. In a future post, we’ll explain why a seller might consider short sale or foreclosure when behind on their mortgage, but read on for information about short sales in Maryland from the buyer’s perspective, and some of the pros and cons to buying a home via short sale.

What is a short sale?

When a homeowner owes more on their home’s mortgage or other loans attached to the property than the home is worth, the owner can, with their lending institution’s approval, attempt to sell a home through a short sale. Whether or not the seller will owe the difference between the home’s value and their debt (known as the deficiency) depends on the contract existing between the seller and their lender. Generally, the homeowner attempting to sell their home via short sale will not be formally approved for a short sale until they receive an offer that the bank deems worthwhile. While a seller is not allowed to receive any portion of the profit from a short sale, they may be motivated to accept the highest offer possible in order to reduce the amount of any deficiency they could owe.

Pros and Cons for Purchasers

Pro: Buyers are often able to get a home for under market value.

Since the owner in a short sale is seeing the debt they owe become more and more unmanageable by the day, they don’t have the luxury of waiting for a lucrative offer to come around. Provided the homeowner’s bank is motivated to complete the sale, this can result in a good deal for the buyer.

Con: Short sales can take time, and are more complex.

In a short sale, there is an additional lender approval hurdle that must be cleared before a sale can be completed. Both the buyer’s lending institution and the seller’s must approve of the sale price reached by the buyer and seller themselves, since the seller’s bank may end up taking a substantial loss on a short sale. Banks have been known to take weeks or months to decide whether or not to approve of a short sale price, leaving an eager buyer stuck in limbo. Since the timeline of a short sale can be protracted compared to a conventional sale, the standard deadlines in a sales contract for the buyer to obtain inspections and approval on a loan generally need to be made contingent on approval from the seller’s financial institution. It is important to hire a real estate attorney who is familiar with short sales and can draft a sales agreement that will protect your interests and help you make the right purchase for the right price.

If you are considering purchasing a home in Maryland, seek a qualified, knowledgeable, and experienced attorney to assist you in the complex process of purchasing property, and contact Annapolis real estate lawyer Matthew S. Evans III for a consultation at 410-626-6009.