The Contractors Group
Newsletter : Issue #21 : November 2001
Editor: Diane Dennis
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The Contractors Group
Newsletter : Issue #21 : November 2001 |
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Hi!
Welcome to our 21st issue, which is absolutely packed with
valuable information for commercial and residential
contractors as well as for home / property owners. There is
a special article about the importance of estimating your
preliminary notice amount correctly, and information on how
to enter a contest in which the prize is a Milwaukee 6509
Sawzall! Enjoy!! Diane |
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IN THIS ISSUE |
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Spotlight: FREE subscriptions to construction magazines |
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Knowing Your Forms Makes A Difference |
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Industry Links: JLC-Update |
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Contractor's
Corner: Feature Article by David Barnier |
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More Free Tools Added To Website: Forums |
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Hosting a Holiday Office Party? Read this first... |
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Please help! We need 1324 new subscribers!! |
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SPOTLIGHT |
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What more can I say other than, it's TRUE, they are FREE full subscriptions to a huge variety of construction magazines! :) One of our guys subscribed to 10 different magazines and they were all free! Click here to see what they have for you! |
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KNOWING YOUR FORMS MAKES A DIFFERENCE |
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** Release of Stop Notice (or Notice to Withhold) ** Triplicate: Estimate, Work Order, Invoice (this is too cool!) ** AIA forms: Unfortunately, I cannot post AIA forms because of copyright laws but I can list information about them and other places to purchase them. AIA Forms |
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Industry Links: |
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JLC-Update is a free monthly e-mail newsletter from The Journal of Light Construction with industry news, and the latest tips on materials, techniques, tools and technology for the residential contractor. They know you're busy, so their e-mail update is designed to be practical and quick to read. In it you'll find: * News stories not yet available in the JLC print edition * Practical computer tips for builders not found in their print edition * Job-Site tips & techniques from the JLC Expert forums * Links to the best JLC features and selected partners from around the web * Online surveys, humor from the trenches, product reviews, and more! And it's completely free to all construction professionals. Click here to visit JLConline. You can also find a link to their site on our Industry Links. |
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CONTRACTOR'S CORNER - Send us your questions... |
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California Civil Code Section 3097(c)(1) requires that a contractor's 20-day preliminary notice ("prelim") include "a general description of the labor, service, equipment, or materials furnished, or to be furnished, and an estimate of the total price thereof." How accurate must the estimate be? Until recently, there was little or no California case law to help clarify exactly how accurate a prelim must be. However, in August 2001, the Second District Court of Appeals of California (located in Los Angeles) gave some guidance to the construction industry on this question. The court held that a prelim by an equipment rental company was defective because the estimated price stated in the prelim was not a true "estimate" in that it did not take into account information that was readily available to the company that would have assisted it in better estimating the total price (Rental Equipment, Inc. v. McDaniel Builders, Inc. [109 Cal.Rptr. 922]). This is good news for contractors, rental companies, and materials suppliers. While the ruling in Rental Equipment was not favorable to the equipment rental company in that case, the ruling was favorable to all other contractors, rental companies, and materials suppliers in California. The explanation behind this irony is that the $10,000 estimate by the equipment rental company in the Rental Equipment case was less than the amount already charged to its customer on that job. At trial, the credit manager for the equipment rental company testified that the estimate was merely a "rounded up" amount from the first invoice related to that job. The court held that this was clearly not an "estimate of the total price" as required by California Civil Code Section 3097(c)(1), as it did not involve an evaluation of any of the information available to the equipment rental company as to the equipment already furnished and the equipment still anticipated to be furnished. In making this ruling, the court stated that it was concerned about the negative prejudicial effect of an underestimated prelim on the property owner. In that particular case, the owner had a $145,000 subcontract with the rental company's customer, but the rental company's eventual mechanic's lien was in the amount of $159,898. The owner (which was the party challenging the equipment rental company's prelim) was able to prove to the court that, had the prelim been $75,000 or more, the owner would have called a meeting with the contractor/customer to address the issue of excessive equipment rental charges. In summary, the court's published opinion made it clear that the estimate in a prelim: * must be based upon the total estimated price to be charged for labor, services, and equipment furnished or to be furnished, but that this estimate does not need to be "substantially accurate" * does not need to include a statement of all rental charges to be incurred throughout the rental period, but instead needs to (be an) estimate of the total charges that are anticipated * can be effective despite "badly [missing] the mark with reference to the total charges as finally tallied," so long as the estimate was reasonable at the time it was made and was based upon information available to the claimant at that time * must be more than a "guess, conjecture, or surmise" The California Supreme Court along with lower California courts have repeatedly recognized that the mechanic's lien, stop notice, and payment bond laws exist primarily to protect those parties that bestow value upon property. The courts have cited this policy in supporting various holdings that favor the contractor over the owner/lender/surety. However, the courts have also recognized that the prelim requirement exists to protect the interests of the owner/lender/surety. It was this recognition of the interests of the owner in the Rental Equipment case, especially the prejudicial effect described above, which led the court to invalidate the rental company's prelim. What should a contractor, rental company, or material supplier learn from this recent court decision? While the facts of the Rental Equipment case may have been extreme, the message from the court is clear. The purpose of the prelim is to give the receiving parties notice of the likely amount of a possible future claim. The court did not hold that the amount of the prelim had to be accurate. It did hold that a claimant must make some effort to review available information when estimating total charges, and not choose an arbitrary dollar amount. To protect yourself, your company should reference all information it has before calculating a prelim amount and keep clear records reflecting what information was considered as part of the calculation. These records would help prove your company's good faith effort to estimate the anticipated total price. This article is intended as a topical discussion of general legal principals. While general rules may exist, there are many exceptions and qualifications to these general rules. No party should use this article as a substitute for obtaining specific legal advice from a qualified attorney. David Barnier is an attorney with the law firm of Barker Walters in San Diego, California. He may be reached at (619) 682-4040 or DJB@barkerolmsted.com or through www.barkerolmsted.com |
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*****************************snippet****************************** According
to the EDD LMI email newsletter, the job loss in
construction
was The labor
force data are available on-line at: The
industry employment data are at: We also
have updated hours and earnings data on-line at: ****************************end snippet**************************** |
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WE'VE ADDED MORE FREE TOOLS! |
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The first forum is designed to help the contractor with his forms and questions. This feature will be especially useful to those of you located in states other than California. I receive many requests for forms for other states, but I don't always have access to them like I do to the forms in California (because we are contractors in Calif.). This doesn't mean that these forums won't be helpful to Californians, heck I am one, it has to be helpful to us! This will be a great place to post your questions on where to find forms that we do not have available, as well as to get questions to answers that we may not be able to answer. Even when we are able to provide answers to questions, we are only one voice amongst many, and it is usually a good idea to get a second opinion (unless of course the second opinion is from my husband about the beautiful, long, leather duster that I want to buy!). *grins* Oh, anyhow..., this forum will help all of us to obtain what we need and to help others to obtain what they need, to keep our construction projects and documents in order. There is also a forum for project property owners (homeowners, etc.). I have been receiving many inquiries from property owners lately so I decided to create a forum for you guys also. Owners can come to the forum and post their questions, and anyone that has an answer for them can respond! This especially gives residential contractors an opportunity to help out homeowners, while at the same time familiarizing the homeowner with their company and services. This forum also gives the homeowner an opportunity to do some checking on the contractor(s) he/she is considering hiring. Plus, homeowners can obtain advice on how to manage their projects smoothly. These forums are brand spanking new, so let's start filling 'em up with info. Oh yes, a bonus on these forums... once you click through to one of our forums, you will have immediate access to all the other forums that are hosted through the same site that our forums are hosted through. Many of these forums are well established forums, and I saw that there is quite a bit of good information posted thru out. Special update to this article: Please visit our forums at your earliest opportunity. Our first forum member has posted a question about clauses in contracts for backcharges. If you have or know of good back charge clauses, please sign in and respond to her message. Don't forget to list your company name and contact information, kind of like a bit of advertising in return for your help! Thank you! New special update: Now there are three postings.... :) Before I go any further, I would like to make sure that I mention that these forums I now have, as well as some features I will talk about next issue, are courtesy of GreatPossibilities.com. GreatPossibilities.com offers the construction industry multiple marketing possibilities including free classifieds and directory listing, free website space, web mail, banner exchange, advertising and more... Now, I mentioned some other features... Because this newsletter has grown so long, I will reserve announcement of our other features for our next newsletter. Do go check out our site though, as the features are already available and waiting for you! |
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HOSTING A HOLIDAY PARTY? |
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PUNCH LIST |
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** Contest! 11/5/2001 thru 1/15/2002 Courtesy of FindPlumbing.com and Ferguson's Santa Monica, CA branch. Win a Milwaukee 6509 Sawzall from Milwaukee Electric Tool. Features: 6.0 amp motor with trigger speed control: 0-2400 spm. Quik-Lok blade clamp system provides fast and easy blade changes - No Tools Required! Easy plunge cutting with no starting holes. Pivot shoe for maximum support against the work surface. The 6509 comes with blades and a case. For more information or to enter their contest, please visit their site at findplumbing.com. You could be their next winner! Good Luck! ** Free powertools from The Handyman Club of America! Click here ** The lucky winners of our survey drawing are Cherri Wise and Kevin Halkola. Congratulations winners!! Cherri and Kevin are both the lucky recipients of $50 SuperGiftCertificates. After searching around, we purchased the gift certificates online at GiftCertificates.com, where they have hundreds of name brand stores for which you can purchase gift certificates! What's more, you can have these gift certificates e-mailed to your recipient(s). No worries about it getting hung up in snail mail through the holidays! If you would like to check out what GiftCertificates.com has to offer, please click here. |
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TheContractorsGroup.com was created to support the construction contractor in his day-to-day administrative functions. We hope that you will find our newsletter and website useful! Help!! We need 1,327 new subscribers by 6:33 am Nov. 24, 2001. Please recommend us to your colleagues and urge them to subscribe. |