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Macbride Principles Certification Nj Form Appeal Advice

okay we're going to start up with the.back half or two-thirds of the a201 we.will get through all the remaining.provisions today we ended with Article.five your apartment subcontractors.effectively the concept of the.relationships with subcontractors is.they owe the same duties as a general.large picture they are going to owe the.same duties to the contractor as the.contractor owes to the owner the concept.is what's called what they use is what.called flow down for them and so.important key provisions in this.document will be flow down and will be.in the contract between the contractor.and the subcontractor one of the reason.why I mention this concept the flow down.and incorporation that's one of the.things that is really good about the a.suite of documents what what often.happens that you guys might find this.when you're out there in the industry.you'll have a standalone contract that.the owner and the contractor want to.enter into sometimes contractors take.this document a full one and they modify.it and they change things and they make.it their own or they write one from.scratch whole cloth the owner enters.into that agreement you want to make.sure that you're saying terms the same.language is being used for the same.definitions.the same ideas between the contractor.and the subcontractor if you don't have.those flow down provisions the.provisions that the contract sorrows the.owner so then go down to the.subcontractor then you may have a.problem in a lawsuit where the owner.says that the contractor you're supposed.to be doing acts and the contractor says.I didn't do that that was my electrical.subcontractor so he turns to the.electrical subcontractor and they say we.weren't going to do ax we were going to.do Y beers the provision so this is.something that's important.happened to stay with architects if you.guys venture into agreements with your.consultants downstream the electrical.engineer mechanical engineer you want to.keep the same terms and conditions so.that's why the AAA documents are great.because all the definitions are already.the same as we've seen we went over this.last week article four it was almost a.repetition of the exact same things.because that's the architects role in.the project is what we all learned in.the p101 so okay moving forward on.article six we're going to talk about.construction by owner or by separate.contractors so separate contractors here.is going to be a defined term that's.again it's interesting here they have in.quotes sometimes so much as a certified.in contracting sometimes you'll see it.in quotes separate contractors but the s.and the C or Keppler sometimes you just.need see a capitalized so I'm just as.the drafting methodology but a separate.contractor sameen contract is retained.by the owner under separate agreements.and the owner reserves the rights from.construction or operations related to.project with the owners own forces so.there are times some projects for the.owner actually has their own team you.know they may so for example you may.have a company that has their own.specialized equipment and that equipment.is proprietary they don't want the.general public to see that so they'll.hire an architect to design the building.and the connection points and all of the.electrical and all those requirements.they need to power the factory and the.space they need to power adapter and.then the contractor will build that.project from the drawings and then the.project is completed as far as what the.contractor in the architect are.responsible for and then the owner comes.in and they may even manufacture some of.their own equipment or they may have.specialty people making equipment and.the owner has their own team to install.that so sometimes it's owners own forces.and sometimes with separate contractors.that they bring in and so that happens.more often than you can imagine.I mean sometimes like I'm staying in a.factory works the whole gut of the.building or sometimes is the example.used from time to time here inquire is a.company building hotel and they have the.architect that the hotel designer.designed the hotel and they have the.contractor build it but they want some.fun end piece like a signature.restaurant and they may actually work.with some either maybe a star somebody.like you know like a Michael ara.Tom Colicchio he's the guy that I've.ever seen the show Top Chef he's very.famous for crafts skates this his name.of his brand and he's got restaurants.all over the world and he has a hand in.making design and so we're live interest.and ideas and so sometimes you have.specialty eyes one of my clients.actually that's all they do is specialty.food services and they'll go in and be.retained by the owner to specifically.design a food court or specifically.design a restaurant or something to that.effect so that would be a separate.contractor because the owner gets.something more than what this.straight-up architect will provide six.to just talks about who the terms are.six point one five sites this one hoping.to 6.1.3 the owner shall provide for.coordination of the activities of the.owners own forces and each of the.separate contractors for the work of the.contractor who shall cooperate with them.now this is an interesting provision.because this places the onus on the.owner to coordinated a coordination is a.specific term and if ever connotation in.the industry of how these things are.supposed to work.coordination is near do the plugs come.in where do the electrical lines come in.where do these that the HVAC system how.does that all work and when you.coordinating normally the architect.hires an electrical engineer a.mechanical engineer some other the.various engineers and they get all their.subcontractors two sub consultants to.provide all the information for the.architect.design and the architect has to make.sure and if we look in this room so.here's a Dutch for the HVAC and then we.have this red line up here this is the.fire protection and then you have the.white pipes that are going here that's.for your electrical when the drawings.came in there were three different.trades that did this and if they all had.their lines running right where the duct.was then you couldn't fit them all in.the same spot so what the Clark effect.does is they move things over and they.coordinate where they are going in the.space and this is about our green here.it gates open but a lot of times you.don't see is what's behind the tee and.sometimes we have a big wide open take.sometimes there's not that much room if.you remember my discussion last week.when we had the I was talking about the.jail of 26 in California where they were.pumping that toxeus.started coming out of these pipes in the.back room that's one of those junctions.that's one of those circuit breaker.boxes and see all the pipes leading into.that well what happened was they said.there was both plumbing and electrical.that were side by side and they were in.camp and they were losing everywhere but.that was because it was partially a.coordination issue coordination is.family to make sure they're not in the.right space but as the project goes.along has the work done to cap things.off so here the owners defending owner.to have it separate contractors the.owner needs to provide the coordination.now I think you see because it makes.this concept of does the owner have the.sophistication to know one to understand.what's in the drawings you know this is.really saying odor says the architect.give me your drawings but I don't take.my drawings from my kitchen designer and.I'm going to coordinate them that.normally doesn't happen so if this.provide for the coordination so.sometimes the owner will pass that off.to supper contractor and that and the.responsibility for the contractor and.the the main contractor is just to.cooperate so that's a little bit.different and the architect is not even.the main art.because they even identified here if you.remember in the b101 there's a similar.provision that says the owners separate.contractor shall coordinate and the.architect will cooperate and as I said.what I often do because I represent a.lot of order what I often do is I flip.that and I make the architect.responsible for all the coordination and.the owners separate contractors will.cooperate and that's what I'll do in.this provision as well for purposes of.exam purposes straight out of what.learning this is you need to go on here.that it's the owner's responsibility to.coordinate which they will have up to.separate contractors but you as a matter.of course or practicality and.construction you can ormally want to.have just one entity doing so for the.design coordination the architecture do.everything for the construction.coordination of the contract it should.do everything they'll charge you extra.for coordinating your separate.contractors but that's worth the money.most of the time because it's only.wanted to be doing that while carrying.the responsibility risk it goes further.though because the contractor had to.cooperate the latter part says the.contract should make any revisions to.its construction schedule being.necessary after a joint review so the.contracts are can't completely pull back.and say well they were coordinating and.I had to follow them there was a delay.and so their fault in this case the.contractor at a minimum has to recognize.that work being performed by separate.contractors the kitchen installer or.whomever it is may impact for the.contractor schedule and there needs to.be communication between the parties.with respect to that schedule impact so.the contractor can't come back a year.later and say well the reason why we're.late is because I didn't realize how.much time your contractor was going to.take well you have an obligation.contractor under 6 1 3 to recognize that.a firm yeah so what the contractor is.going to do sequential is if he has um.if the country recognizes them state.that in the contract that shouldn't be a.problem recognizing that there could be.a schedulers or whatever yeah what the.intent of this and some other provisions.in the section and all of article 3.which is the contractors are relation if.the foster communication and so the goal.here is to make sure.shall make revisions to its construction.schedule.after there's this joint review and.mutual agreement so there's this.discussion this is obligating a.discussion between the contractor and.the owner separate contractor the owners.kitchen installer and they're obligated.to communicate with each other and then.the contractor because it own the whole.project schedule must adapt its project.schedule to include what the parties.agree you think about it I'm a.contractor I get the drawings that I see.this box that's open where the kitchens.going to go on building a hotel I build.my schedule out oh my god well I know.how much it normally takes to install a.kitchen and we've done many hotels and.everything else so I plug in X number of.weeks for all that work depending on you.know how its sequence and everything.else well if it turns out it's some.specialty kitchen with very high design.and like completely different things.it's going to take much longer to barrel.and so the contractors initial Prada.this is going to be a basic kitchen and.how to build this ed rule will be.changed after this discussion majority.view to agreement when the contractor.learns that the owner wants something.more and so if the contractor gets this.understanding and they should learn this.and fails to adopt adapt or adjust the.schedule for the more detailed.construction effort here the contractors.on the hook because if this shall make.any revisions to a schedule.so you want to make sure that the.contractors in their up front modifying.or dis ting the schedule to whatever.that work that's being performed by.other contractors again another example.I have a client that um they they are.there.very nice home and they built a cool.house and a pool and it was a very.specialized design it was a saltwater.pool lack of other things for swimming.and stuff but it was the whole pool.house and pool was them I an entirely.different entity than the main.contractor for the project this was a.multi-million dollar project the pool.house and pool itself was a two million.dollar separate contract they had to.adjust their schedule to reflect because.there was going to be a new crew coming.in not the contractors crew a brand new.crew that was going to build in this.pool to us so it's not just kitchens and.I think if anything where the owner.wants to bring in their own specialty.entity okay six one four unless.otherwise provided in the contract.documents that goes on through the owner.or separate contracts shall have the.same obligations and right the.contractor has under the conditions of.the contract and this is separate.contracts officially contractors I.apologize for the typo there so.basically if you remember what I was.just saying the beginning of crass.article 5 is the continent sub contracts.obligations and as I said you want to.build or you want to write the sub.contracts.so whatever the contractor owes to the.owner the subcontractor owes the same.obligations it's the flow down.provisions between owner to contract to.the sub-project this provision is the.same thing this says hey if I'm a.contractor and I have to do a B and C.for the owner and order you bring in.your own contractor they should have to.do a B and C as well we all want to be.on the same page I don't want them to.have any more or left for me I want to.make sure that their obligations of.safety and site management and.scheduling and all those things that are.built into this agreement.you or have an obligation to make sure.your subcontractors are followed or your.special separate contractors are.following the same rules it makes sense.anything about I use this example the.time that that the contract is just like.the rules to play Monopoly you know so.you start playing Monopoly and.somebody's the dog and somebody's the.shoe and somebody's the iron and you.start playing and the third person the.fourth person comes in and they want to.be how many remember what else is there.little toys on them whatever somebody.bags they want to be the money bag that.they keep middle playing by different.rules that wouldn't be there so that's.all that this thing is we all need to.play by the same rules.that's what six one four cents six to.you to respond off the building the.contractor shall board afford the owner.and separate contractors reasonable.opportunity for addition introduction of.storage of the materials and equipment.for that activity which helps connect.and coordinate the contractors.construction operations with theirs as.required by the kinds of documents to.get a very basic simple concept but it's.good that it's in there what this says.is very commanding you're going to.install that kitchen well I know you're.going to need a way down here you're.going to have to worry where you going.to store your here's your stove your.oven Joe clubs where you're going to.love your electrical cord towards your.tightly going to be we're here for them.they'll work and go all the things that.the specialty contractor is going to.bring in to build after have a location.so supper contractors need to have this.for storage of the materials and.equipment there has to be this.coordination is from working together.between the contractor and the cut and.those separate contractors and in fact.our large projects and I work on many.many large projects sometimes the lay.down area can be one of the most.critical things in the construction you.know we think about it like I got the.plant going out for Wisconsin that's a.hundred point seven acres I got plenty.of places spread out there steel there's.not going to be a problem of.coordination but another project I was.working on was there was a there working.on potentially doing the renovation of.Belmont Park Scotia place.New York State so if you guys all.familiar the Belmont Stakes they course.race one of the Triple Crown events so.that's a beautiful stadium that we're.going to do a huge renovation if they're.kind of going through stuff it's on.where Belmont is that's all it's on an.area where the access road is very.narrow and the New York Islanders jump.in ahead of the game and they're.building a new 1.6 billion dollar hockey.arena.Hakeem's and concert arena everything.else there is one main access road to.the site because the hockey arena is.going to be right next to where the.curved belmont stakes are one main road.and so the logistics of when the trucks.are going in and out there's a big.discussion going on right now with the.Islanders because during the week into.the Belmont Stakes of whether they can.actually have construction during that.time because there's only hundreds of.thousands of people that come in to walk.the liveries so there's all these things.that come in with coordination and.that's also what happened to here so I.had a project in your state and your.city and it was actually they were it.was for a pumping reroute a pumping.station that actually comes all of the.wastewater for the upper half of.Manhattan and followed the pumps were.seven stories underground and it was on.this tiny little site it had no space.around it and they were able to offer.like a parking lot like three blocks.away and that's where they had to have.all this equipment and there was a huge.pumps and so the logistics and the.timing of who got this one parking lot.at what time during the construction for.coordination was huge and if it didn't.flow right for example if one entity was.late in their delivery and the timing of.wind map say for example to steel how.long it took for the steel to be put.onto the elevators and lower down so.that the next day somebody could bring.in their electrical pumps or whatever it.might be it could potentially throw the.whole project.days or weeks and so as realm of those.times money so coordination is really.important and that's what to talk about.here coordinate the contractors.construction and operation of is.required by the contractor and you.figure all those out in the beginning.constructibility logistics you have long.discussion on a tight site something.like this six to two the part of a.contractors work depends on proper.execution or results from construction.or operations by the owner or.subcontractor the contractor shall prior.to proceeding were that portion of the.work promptly notify the architect of.the impaired discrepancies and effect of.the construction or operations by the.owner or subcontractors they would.render it them suitable for proper.execution results for the contractors.work what does that all mean all that.means is if the contractor sees.something that the owners separate.contractor is doing wrong or incorrect.that impacts the general contractors.work general contractors are independent.then I think a responsibility for it but.they have to keep an eye on it they have.to give you those now most contractors.will do this without much prompting.because anytime they can push the blame.onto somebody else they'll write a.letter and that's good and that's okay.too.the order wants to know that but this.actually mandates them to do that they.have to make sure and they have to say.hey what's going on here they're doing.something and it may be at the Rea issue.or it may be that their work is.defective and they see that and they say.racket impact you know if your specialty.contractors putting up a post and beam.system and I'm building on the second.floor and I think that there's problems.with that construction that could cause.a failure I need to point that out now.further though it says the contractor.shall not be responsible for the.discrepancy of the defect in the.construction operations so that are not.apparent.so this is again that shit's the math.type thing where the contractor.efficient if it's reasonable and they.see it and a good proven contractor.would recognize these things and there's.a defect or a discrepancy they need to.point it out if it's hidden if they.can't see it if they didn't know that if.it happened while they were working on.another side of the project.they aren't responsible for and.ultimately a separate contract will.always be responsible for any of its own.failures it's just the first paragraph.is first part of the paragraph make sure.that the contractor can't completely.remove it so they have to have some.obligation because they're running the.overall project any questions on it six.to three the contractor so reimburse the.owner for costs that incur that it's.because of the contractors delay so if.the contractors late contractor can't.manage its site and your specialty.contractor comes in the pool design the.pool contractor comes in and the hole.hasn't been dug because the general.contractor didn't do it right and the.pool contractor has to sit around for a.couple weeks and incur cost the.contractor has to pay the owner for.those additional costs paint a yellow.egg if the owner thought if the.contractor thought that the pool and the.pool house were going to be completed on.a certain date and the contractor was.going to been bringing this landscapers.can finish out the project that the pool.is completed and the pool contractors.delays and the landscapers have to sit.and wait for two or three weeks the.owner has to pay the contractor for.those delays pretty basic stuff and what.could happen with that well the owner.has to pay the contractor is delayed the.owner is going to turn around the point.to its pool contractor and say I had to.pay the contractor 100 grand because.your delays you owe me a hundred grand.plus my movies something to that effect.six to four it just talks about if.there's issues with partially completed.construction so it's similar what we.talked about six to three.um six three the orders were to clean up.this is actually in this business if the.owner walks with site and there's.language in these contracts that they.want to broom clean they were neat.orderly whatever it might be and if it.turns out that the odor fields the.contractor is not teaching that's right.properly clean Co dark expecting to.bring its own crew was probably going to.come in or come into place is lots of.times in seasonal changes you know maybe.they need to have snow fences up maybe.they need to drain the water maybe.there's areas where it could impact the.owners business so the owners who are.bringing somebody else because the.contractors not maintaining a clean site.they always allowed to do that that's.what this does here at six three and the.contractor has to pay for those.additional costs if they didn't keep.their project where it needs to be all.right any other questions on odors.separate contractors good article seven.changes of the work I use the word.change order throughout the semester.many times we're finally getting to find.out exactly how a change order works and.what it's for that's what this articles.for okay changes in the work may be.accomplished by the execution after the.execution of the contract by one of.three ways by a change order by a.constructive change directive and then.by a minor change in the work which is.like sometimes we call the field change.okay a change order is based on ablative.feeding order the contractor and the.architect the architect is involved in.change order a construction change.directive requires agreement between the.owner and the architects only and may or.may not be agreed to by the contractor a.minor change of the work can be just.issued in the field by the architects.okay so what's the difference between.them is not a big level change order.it's kind of the end of the culmination.of everything else I'm going to do for.you the architect designed a 3-bedroom.2bath house and the contractor price.without going to build that 3-bedroom.2bath house for two.$500,000 and then there's a change they.wanted to be a three-bedroom three-bath.house so the architecture makes a design.change that results in a pricing and.schedule change and that has to be.written up architecture the drawings the.contract your prices without and they.write it up for the additional bathrooms.with the locator on the second floor.this is the additional cost and you.write it up and all three owner the.architect of a contractor a brief they.sign it and it's a change order a.construction change directive same.scenario but when the contractor comes.back if it's going to be seventy five.thousand dollars for the additional.bathroom the owners love are you crazy.and he wants the architect and said what.did you design for me what is on that.what's gold plated in that bathroom if.the architect says look my costing looks.like that this is going to be about a.thirty five thousand dollar change I.don't know where their additional 40.grand is and so the contractor says well.but its effect my schedules and it's.really busy in the industry and I can't.get this especially partisan I really.think it's 35 grand and for a.constructive change directive that.instance the older in the architect.agree that if the $35,000 change and.they give a directive to the contractor.do the work I know you don't agree and.we don't agree on the price well maybe.it's the schedule issue but the three.parties are not in agreement so they're.giving an order as directive to perform.the work and there's provisions later on.the contract to figure out how we're.going to pay for that how is it really.good is it going to be the 35 is going.to be this coming fibers to be somewhere.in the middle but the work needs to be.performed until the parties come to an.agreement that the constructive change.directive that's the difference between.the change order where everybody agrees.and they sign and a constructive change.order with a given directive let's.figure out the price of scheduled later.on.and the the work order is like the minor.change of the field.architects there you know I don't like.this a shell life I need some ways.that's a simple change gives the.directive in the field it's got a clock.impact not a schedule impact because.they only painted up one half of a wall.that's it that's going to be a field.change something that the architect can.just do with an aesthetic thing it's not.going to be across your schedule impact.okay if the fits more expect that there.is a cloth impact then you need a change.order or a constructive change.corrective so a field change the minor.change in work is no cost no time okay.and in fact if it was I don't like the.white I want it blue that would be.something that the older should probably.get approval on that wouldn't be a minor.field change either it's so it's minimal.impact as a substitution no cost no time.that's what a work record appeal that.requires no signature okay so and then.under 7 1 3 changes in the work the.contract should be probably with the.change of the work go to a little a bit.visit so that just means you got to keep.grooving if there's a change you got to.keep moving the schedule what's going on.get back here I'm not gonna touch this.again separable.let's try this again okay see the switch.again alright smart as that don't know.what happened.okay so 7.2 change or the change in the.work to change in the amount or change.in the schedule so the scope we added.the bathroom cost $35,000 it's going to.add three to the project it can be one.of any or all three together it doesn't.have to be all three does it have to be.two it can be one of all three or any of.a combination but it has it's a change.to any one of those that causes the.reason or need for a change order that.you have to have a right 7/3 the.constructive change directive as I said.it's a written order to prepare by the.architect and signed by the only.architect but the adjustment to the sum.or contract time that comes later when.they figure that out and so it's just to.continue to keep the work moving along.ultimately you're going to figure out.you can figure out how much time or time.the patient how much more cost it is.it's just you want to keep the work.grounded go ahead push it yeah what will.happen is that the architect will issue.a change order request that there can be.an odor eventually it while the.architects issuing it's an odor directed.change contract is going to prices all.the work any change order is going to be.priced out before the work happens or.almost all but sometimes it's mandatory.you got to do it you got to go emergency.but by and large is a process by which.and so when the contract to come back.with a price of the schedule that the.architect and the owner don't agree with.then you have to negotiate and so what.you don't want to do is delay the.project until you figure out what those.prices are and so the contractor is.given this directive to continue to work.and proceed donate on this and what the.work done we're an agreement that it's.got to be done you understand what the.scope is let's just figure out price and.time as it most.so that's what 731 says 732 if you.construct occasionally usually absence.of a total agreement and the adjustment.can be based on the following so here's.how we're going to adjust it eventually.they're going to come to a mutual lumps.knob so the country comes back and says.I can do it for 75 the owner says as an.architect that should be 35 and.somewhere along the way they agreed it's.going to be 50 that's the negotiation.but you don't want to wait to the.negotiations done by already worth doing.the work the enterprise's can be done so.unit prices is say for example how many.linear feet they're not sure how many.linear feet of piping is going to be.used for the bathroom so we've agreed.that it's going to be five dollars or in.your foot and we're all agreed on that.price and then the contractor should.come back later say it was 100 linear.feet as opposed to 75 and then they'll.know what the price is that they've.agreed to that unit prices upfront cost.to determine the matter agreed upon.between the parties so they just figured.out should it be a percentage should.there be as actual cost do they actually.do a time and material so that's one.it's provided in seven three four which.we'll get there in a second and seven.three four so the contractor does not.profit does not respond properly or.disagrees with the amended for the.adjustment of the contracts own the.archetype shall determine the adjustment.so the architects going to say what.really Derek is gonna pay 35 and the.contractor says I don't agree with the.35 but that's what you write up in the.constructive change directive so the.odor in the architect kind of state to.their place it put their foot in the.ground this is where we are and then the.contractor though comes in and it keeps.itemized accounting with the actual work.being performed back up here how many.hours my neighbors did here are the.actual cross from of materials.here's any permit for the Hat and so.what they're going to say I don't agree.with your $35,000 mr. owner and.architects but I'm going to cost track.my actual clots and I'm going to give.you back up for everything.and we're done that's what you're gonna.pay me may not be 75 it may be 90 but.I'm going to keep that track so that's.how you kind of go through it so.sometimes the owners you know sometimes.the owners what I want if they will - do.I really want to take the risk of saving.my rounds of 35 and I could maybe get.the deal done and negotiated for 50.instead of the 75 because if I take the.risk if they cost me 90 or something who.knows so sometimes there's like that's.part of the art of the the negotiations.kind of how you want to get the deal.done so and what they crack and seven.34.1 it's the cost of labor the cost of.materials point to rental costs of the.shearing cost the premiums or bonds and.compass supervision lay the people in.the home of projects way all of those.will be tracked the contractor keeps all.those a separate line item hands the.builds the owner and says your new.bathroom cost you eighty two thousand.six hundred seventy three dollars and.fourteen cents I'm not taking the 35 I'm.taking the 82,000 that's how that works.so if the contractor if you disagree to.the construction is an adjustment to the.time because the art desk if they were.all probably adds about three weeks from.schedule if the contractor disagrees.with that the contractor has an.obligation to make a claim on the.article 15 which we'll get to a little.bit later on but it's a profit for which.they make a claim so in that case it.will necessarily track the same way in.hand it you're automatically allowed to.but they do need to track how the impact.is you had a question.yes yeah the seeds are most often the.shapes the constructive change directive.is going to come in place this is almost.95% of the time they construct a case.director vision change orders drawn up.the scope is defined the contractor.comes out gives the time and schedule.and it's bid coming back most of the.time the disagreement is over the price.sometimes the disagreement they say oh.we can do it for 50 grand but it's going.to take up an extra six weeks from the.others like that's crazy because my.architects that that's two three weeks.to add that bathroom sometimes that.happens but it's in the fiery Basinger.minority most the time it's the price.and so what you want to do is to.preserve maybe the architect says three.to four weeks or two to three weeks and.the contractor says three to four weeks.you don't want to quibble about that.because if you can lock down the price.for that even if the schedule gets.extended they're not getting any more.money - time is money if it's six weeks.every week that the contractors on they.get paid at the end of the job but if.they so what you'll do is you'll you're.not going to necessarily a hundred.percent agree that's three to four right.out of the box but that's where you want.them to start the work they're working.on it while you continue to the go she.ate you may say you know it's not worth.the negotiation I'm really confident.that your numbers are going to come in.close to the mine and yours just giving.your TNM breakdown but if you think.there's a risk because who knows then.you continue to negotiate while the.works being performed and you say I want.to hedge my bet I want to secure this.risk I'm gonna do it with you for 50 we.agree with a fifty five fifty yes well.built for fifty and then if the.contractor spend 70 or 80 well that's.their problem not yours you've already.locked it in at 50 so that's kind of how.the process will work seven five three.five the country girl disorder said if.there's time issues they can make a.claim under 15 we'll get the 15 of how.to make there.a claim for time 7 3 6 upon receipt of.constructive change structure here's the.answer the country official promptly.proceeded with the change of the work.and then they'll by the architect of the.contractors disagreement with that.intent so 7 3 6 says contractors you.gotta you got to go you know start.working if we want to people schedule on.and then a constructive change directive.that's ultimately signed by the.contractor whatever is written on that.CCD is sometimes what they call TVD.what's written our man when the.contractor signs it it becomes a change.order because now all three people.decide that the owner of the architects.of the contract are all there and that's.what it's written it immediately shall.be recorded as a change order now if you.want to talk about why this is important.gear in the project in the process of a.construction project you're going to.have pay applications I'm going to build.your house for $1,000,000 original cost.million dollars your first pay.application your invoice contractor is.going to be invoice them for $250,000.amount remaining in contractors 750 and.that's what your traditional pay.applications going to look like but.let's say there was a hundred thousand.dollar change order to add just a more.family so it's going to state original.contract amount one hundred thousand.amounts paid to date two fifty amount of.change or zoast a hundred thousand.amount remain newer just a contract.amount 1.1 million about remaining to be.finished eight hundred fifty thousand.dollars with work so that change order.is going to be identified that one.hundred thousand you may have another.chase that first just to the family room.there at the bathroom then it's a.plumbing issue then a roofing change who.knows what they might be and so you need.to track these change orders and they're.tracked by numbers and so what you're.going to have is you're going to have it.sometimes and then sometimes there's a.whole bunch of main change order.requests that they lump all together so.you're going to have this schedule is.going to have all the changers and a CCD.is it go beyond that schedule it's going.to be sitting out there on its own so.you need to convert it.to change order there will be not much.change or six and it's identified and.those become part of the contract so.it's it's a mechanical process more than.anything else okay yeah let me cut there.just like the F yeah so what will happen.is there will be the initial they'll be.initial order drive motor driven change.request the physical cor change order.request and it can be an older cor it.can be a contract for cor you do the.both sides can answer them contractor.may be like as I've used as an example.dig and I find soil problems so I wanted.to cor because nobody knew that so you.gotta pay me more money in the week ago.but in the instance where a CPD comes in.the place the owner has this directive.they all want it done and you write up.the CCD new bathroom here's the drawing.be attached thirty five thousand dollars.three reschedule extension that's what's.written up contractors like I don't want.to do that on a green blah blah blah but.they start doing the work when they.eventually is a negotiator on the fifty.thousand dollar deal or eventually the.contractor comes in and says here's all.the invoices for $82,000 that CCD is.modified and it comes to be whatever the.prices goes from 35 and goes 50 or.becomes a 80 mm the schedule goes from.three weeks before or whatever that.might be and then you write it up as a.change order.if however sometimes it stays the same.doctors like okay fine I'll do it.and then they find it you have to create.it but when you find it but you still.have to call change order six but.sometimes that CCD doesn't look the same.when it's finally signed at the end but.the answer your question okay great.seven three nine pending a final.determination of whole cloth for the ccd.in the cost to the owner the contractor.may be pressed a massive or complete.under the constructor change directive.its application for payment and the.architect will make it in terms of.termination this comes into play in two.instances one it's a very long drawn-out.negotiation and so the contractor is.like you know this is taking once a.month because we're not sure I can't.carry your class container it had 32,000.dollars worth of labor and materials so.you gotta pay for that even though we.haven't decided whether the final fight.is going to be 35 or 50 or 80 - here are.my invoices and you must pay you for.that and the owner does have to pay.that's what's going to happen they get.the page during that then the architect.can make a determination and information.make sure that those bills are valid but.if they are bills for the work being.performed by and large that the owners.going to have to pay for it so that's.one infants with them the negotiation is.taking a really long time another.instance is the same thing where those.from K that pay application the.application but they've agreed to a.number to see architect and the.paperwork hasn't been done so the.contractors like okay we've all agreed.to $50,000 but you still have to pay me.for last month 32 grand and whatever I'm.going to spend this month I know I'm not.going to spend any more than an.additional 18 I'm never going over 50.but we're not going to wait two months.for me to be paid for the work I did.last month so that's all the good thing.7:39 says hey and I compute since we.haven't agreed for the pricing I can't.knock your base.I do work I got to pay my subs you got.to pay me to pay my shows pretty simple.and the owner has to bind to them and.that's what instead of again like I said.why the owner wants to try to negotiate.that maybe that $50,000 number because.if it continues to go on if it month to.one is 32 and they haven't walked in the.50 plus two maybe another 40 who knows.what it is so that's one of the reasons.like and as the months keep going and.you haven't locked down that ccv the.owner has to keep writing checks so.that's given Center to keep the owner.movement as well 7 through 10 when the.owner contractor agree in determination.has been made shall be effectively.immediately in the Arctic will prepare.the changer so that's the physical thing.that that 32,000 $35,000 CCD that will.physically rewrite it as a change order.and then that's going to be issues to.take place of the CCD okay seven four.minor changes in the work they're.consistent with the intent of the.contract documents they don't involve.adjustment and the sum or the time and.if the contractor believes that a minor.change of the work will affect the.contract some more time the contractor.has to notify the architect and does not.perform the work so this is a little.different with a constructive change.directive everyone knows there will be.an impact to time or money or both and.the contractors as we all know we just.haven't figured out locals are the.contractor must perform the work the.architects go when they order a minor.change in the work if the contractor.believes there's going to be an impact.to time or money the contractor stops.and doesn't perform the work so your.example what happens if we went from.eggshell right to dub light and the.doublet much more expensive.the contractor has an obligation to say.that paint is twice as much I need a.change order for that this is not just a.fieldwork directive and so I'm not going.to do that work until you either writing.a CCD or your idea changer so that's the.obligation of the contractor is they.need to stop and then it says if the.contractor performs or without this.notice right here if they do the work.without notifying they waive any.adjustment so the contractor listens the.architect on the architect says change.this a shell to dub light the contractor.says great painter goes out by the build.light comes back paint the room dub.light and the paying costs are three.times as much if the contractor didn't.tell anybody they can't charge that.contractor has to eat that loss those.contractors will fall into this trap but.occasionally about pathid and this is.why this is here litigation this is one.of those provisions I guarantee you that.woven around where the first distractive.it was put in because there were.lawsuits where the contractors like wow.it was one more expensive I didn't know.and some the mayor like yeah but you did.it you did the work you got a tell if.it's going to cost more and then I'll go.back to my architect that they I'm.really flying with the eggshell white.mountain of one.the constructive change directive so.what's going to happen is the contour.contractor doesn't issue a ccd.contractors receive the confer the.reason why the constructive change.director is because the contractor.doesn't agree with the owner of the.architect just to stop the work yeah yes.there's really two options here under.under minor change of the work seven.four.the question is is what what basically.the question I think if I gather is that.this issue comes up and the contractor.knows it's more expensive is that one a.constructive change directive comes in.the place it can there's going to be.true one of two things that will happen.if the contractor is directed by the.architect in the field to do a certain.change and the contractor if there's.going to be no price impact and there no.time impact we'll just do the work at.the field order no big deal but if.there's going to be a price impact or a.schedule impact the contractor says dot.here's what the price impact is for the.scheduled impact the architects then.must issue either a change order because.the architect agrees with the price and.schedule impact that the contractor has.identified or if the architect doesn't.agree they'll issue the ccd they'll.direct the contractor to do the work and.we'll figure out the price and time.later so let me give you an example.happened to me so I bought my very first.condo or townhome I bought was the it.was a four-story townhome and the pad.had been poured and they had already.trained the first level when I purchased.and they had already cooked Florestan.they were starting to frame up the.second and third level I came in and.made some changes there were a half wall.in the kitchen I blew it out to be more.loft open like and some other stuff that.some of my design and I drew up the.designs and I presented them to the.Builder developer and the one thing that.was infuriating to me was in the hallway.in the upstairs in the third level.between the two bedrooms.I had them throughout the teeny tiny.little 1 foot wide linen room for the.ceiling and it literally brought it had.them because there was going to be a.wall there they had to put two more two.by fours here that was all it was I.wasn't and they wrote a change order for.that because there was two more two by.fours I'm like this is crazy I thought.that should have been a field chase but.their perdition and I think it's right.with but we had two more too much work.that material at the very least now of.course they charge me a lot more and.there was labor involved everything else.that it was a mom work here was the most.expensive one foot by one foot linen.closet I could ever imagine but that's.next his wife but that was where I.thought it shows that a field change.taking back instead should have been a.change order the are kids that the.developer came to me and said here's a.change or you can assign this and I find.that we move on but that was where.that's how that went along that's one.way to come into play.okay all right that's it for what they.change with a difference between a.change or a CCD and a field order by the.Arctic right art of waiting time so now.we will talk about time so are we going.to do about time here.okay let's otherwise provided the.contract is a period of time including.authorized adjustments a lot into the.contract documents for substantial.completion accident seek a price.substantial completion as a term that he.gets in like nine point eight is when.the building is fit for its intended use.of purposes the store factory can make.stories the homeowner can live in the.home the hospital can receive patients.it's going to operate as its function so.the time is the contract time capital C.capital T is from the beginning when the.contractor first starts mobilization.shows up with its first truck so the.building is substantially complete.that's your project schedule and those.are two critical days that's the date.substantial completion date there may be.all these little milestones in between.but the two most important our.commencement substantial completion in.every construction contract okay and the.date is substantial completion if the.date certified by the architect so the.contractor is going to come in there and.say we're substantially complete you can.start making your toy and the architects.going to walk around the site one of you.guys and you're gonna walk around here.and say yes or no no I don't think it's.substantially complete they are finished.with excavation right substantial.completion is not final it is not 100%.it is the building is fit for its.intended use and purposes but it's not.100% complete and may need some touch-up.paint they need some fixing floor tiles.touchless type stuff that substantial.completion and if the architects who.makes that determination not the.contractor contractor will waive it and.I'm substantially complete the.architects the person is going to say.yes or no.8:22 progress and completion time with.its state in the contract accidents are.of the essence of the contract and the.contractor confirms that the contract.kind is a reasonable period for.performing the work so the time limit is.an interesting thing like I said we have.commencement and we have substantial.completion 18 months 274 days whatever.it is beginning to end there may however.be what's called in from milestones.other triggers in the contract and when.it says on the exit that means if they.miss a date that has been identified as.a critical date a milestone days or.substantial completion the contractor is.in breach of contract they have failed.to perform because they have blown the.schedule so an order is what a state.connector can give you schedule the.contractor breaks up the schedule.instead say well here's electrical start.here the plumbing stars and here's where.carpentry starts and here's where the.widows install the doors installed the.floors and all really the things that.are going on a construction project for.the owners for the same every single.date on this contract on this schedule.every single one are critical because of.this contract provision h 2 h 2 1 says.the time limit there's no definition of.what that is are the efforts now that's.not practical in the real world because.sometimes things get shifted and moved.around so you want to have discussions.with your contractor to figure out what.are the real critical milestone dates.but a literal interpretation of 8 to 1.that every single date on that contract.or set in stone and the contractor.failed to the anyone there breach of.contract license that practical does.make sense but that's the literal.interpretation lives it's also the.contract says this page reasonably.contracts is agreeing in this provision.in series what you all need like to make.these kinds so that's their agreements.they're buying off into it a to to the.contractors are not knowingly suffer.grievous by the owner lighting commence.work prior to the date of the effective.date of the insurance being required so.you don't want to contractors start the.project without being sure you know so.he could slip and fall on day one and if.they don't know their shirts place.that's bad because somebody can pick up.those costs so that's important seven to.three they shall bring proceeded as.expeditiously with the adequate forces.they got to have enough manpower enough.people doing the work to achieve.substantial completion within the.contract huh yeah I gotta have time and.materials labor and everybody else to.make sure I can hit that two hundred.fifty seventy four day schedule or.whatever it might be delays of extension.this is what the contractors write.letters all tied up if the contractor is.delayed at any time or the commence with.the part of the work by an act or.deflective the owner the architect or of.a separate contractor or by changes in.the order of work a labor disputes by.the way authorized the owner or other.Clause then the contractor shall be.extended for such reasonable time as the.architect they determined so what's.going to happen if any one of these five.things happen contractor should write a.letter or an email or some type of.notice to provide and say hey.there was a delay that the order offered.because there was a mediation selected.there was a dispute over something on.the project in the older sir well let's.hold off on continuing work because we.need the heavy nation to figure out to.have real-time mediation of the project.or there's a change.you added a bathroom all those things.are reason and it says the contract I.shall the extended the contractor is.given an extension to schedule but the.architect is kind of the final one to.make that decision remember in the B 101.we had this term called the initial.decision maker the architect was going.to be wearing that hat of a neutral.here's one of the times which the.architect steps in says high pressure.says for use I say three I don't agree.with that we're going to give an.extension of the contract for three.weeks that may result in a CCD as they.figure out what that is but the.architect we kind of had that.decision-making authority any questions.on that.yeah go back to title very good okay a.2/3 up.that's a great question what are.adequate forces to make sure you get the.project done on time.really good question because every.contractors going to say when they ban.the Pao when they man up for projects.whether it's a kitchen renovation like.my wife and I had that was supposed to.be done in six weeks that it took almost.thirteen or whether it's a two hundred.million dollar facility the contractor.is the obligation to make sure that that.is adequately stamped and they are all.going to go in thanks.we think this is how much time it's.going to take and this is what we.believe there are enough people and.there were the project is delay and the.owner is now incurring costs because.they can't start making their toys or.they can't eat in the kitchen or.whatever it might be to the extent that.the owner incur losses or damages from.that the owner is going to argue.you didn't properly stamp the project.and then that becomes when it comes on.my desk if it's a dollar figure large.enough to hire a lawyer then I'm going.to hire a scheduling expert and that.scheduling experts going to get somebody.in there to look at the manpower graphs.and they're going to see how many man.the women are actually performing to.work and was it reasonable we have.projected for a power plant in Missouri.and they had this one they were putting.in a boiler boiler to superheat the.water to get the steam flowing that.turns the turbine to make electricity.okay the boiler had thousands of.thousands of pipes like you see in the.back of the room and those pipes though.because they're he's they're having.water at a super super critical point if.it's water within the thousand degrees.it wasn't an esteem it wasn't you know.boil employee of Twitter V this is in 14.1600 degrees so they had to have these.very specialized Wells for the pipes.when they connected pipe the pipe the.pipe the contractor believed that they.had sufficient number of welders on the.project site when they put together.their project constructability plan it.turned out that the type of welders that.they had enough manpower for were not.available for the project to remove.especially well then with all the issues.with the type of material that the pipes.were made out of there was a new a newer.alloy and so we required a special weld.and a special type of welding and that.weld took longer and they needed more.people and so the whole project the.whole litigation is group because this.was millions of dollars of additional.time and Kaufmann came down to whether.the contractor adequately had enough.welders to support the completion dates.for that one element of the project and.this project had a number of milestone.dates so we didn't have to worry about.whether they can make it up on the back.end and get substantial completion we.were talking about the cost in this very.narrow window of the installation of the.spoiler and the super critical issues of.that and that was based on adequate.forces contractor said we had enough we.said we didn't and then we brought in an.expert to try to show why one side is.right over the other that's work so the.question is who determines what adequate.forces is at the outset the contractor.if something goes wrong if the lawyers.the experts look for the judges to the.jury that figures out in which side you.want to agree which is adequate and more.than too many yeah so that's another way.you want to look at it so sometimes.they'll be over staffing or they've.having too many people on it and how you.want to handle that is you want to.handle that in the beginning of the.project of how you negotiate so if you.negotiate a lump sum project I'm going.to build this facility for you for two.hundred and twelve million dollars the.owner doesn't care if they have so many.workers on the project site because it's.not going to go over two hundred twelve.million dollars because they got a.wealth um it's got a care if it's exert.if it's cost plus for the guaranteed.maximum price which we talked about a.little bit about so the actual cost of.the work but it's still got this.guaranteed maximum price cost cap the.owners not baby's much worried either.because there's still a cap Fiona would.like it to be lower than that that's the.whole point but it won't be as less but.if it's a cloth buff and it's an open.end agreement but of course the owner is.going to have an issue with that and are.there going to be issues or reasons why.the contractors trying to pad it so.there are ways that you need to go see.it up the front of what the deal is that.can impact whether you care whether the.two many workers or not obviously you.always want to have enough so if there's.too few that's going to be an issue.regardless of letting you go.in the front but if it's too many.because sometimes through mating can.impact other workers if there's too many.people in one area yet too many welders.in one spot you don't have room for the.other carpenters near the people to do.the work around it and that could delay.the project so too many is out of goods.but for certain reasons and so then as.the projects get larger the risks are.higher the owner is often going to hire.their own people to do what's called.project controls and that holder is.representative a separate third party.that the owner it's going to have them.sitting on their site not the architect.of the engineer but a separate entity.that individual or that company is going.to be being the watchdog and checking.the man of the various people and.numbers and time and manpower and all.this other stuff and that's very.critical for large project that is could.potentially tens of billions of dollars.of how they're staffing a project budget.manager well the project manager can be.in the contractor side could be an owner.of the architect every every project.every discipline contractor design.professional owner are all going to have.their own project manager this.individual this entity that's going to.be doing what's called project controls.or overseeing it could be the owners.representative and the owners project.management could be wearing multiple.hats project manager is normally just.the person that we identified kind of.the point person but but yes that is a.project management element of managing.time and money and schedule and and.power and the stuff called earn value.this is all these things that we could.spend an entire class or entire semester.on on the specialty elements of project.controls on how to manage large-scale.project in fact various universities.they are engineering schools have.classes just is that one of my partner's.teaches the client the door question on.this very issue it's the whole semester.so okay moving on.article 9 payments and completion so how.do we get paid what do we get paid well.here the context on capitalized term is.the total amount payable to the owner in.the contractor for performance of the.work older and contractor only doesn't.include the architect so if you remember.the cost of the work is just the cost to.build it it's not the real estate clause.not the architects fees so when a.contract when an owner goes in and says.I got two million dollars to build this.house and that's all in where they got.to remember they got to pay an architect.they got to pay the fees they got to.have the real estate and then whatever's.left over for the cost of the work and.that becomes the contract son 9:22 unit.prices the stages of the contract.document and there are quantities.originally contemplated if they're.material change such that there is a.substantial inequity to the owner of the.contractor that the attea practice shall.be equity adjusted so what is this.they're so unit prices as I said is so.for sometimes sometimes piping copper is.going to be priced out of the linear.foot how many how many dollars per.linear foot sometimes bricks how many.per liter per unit brick concrete.roadways how many cubic yards of.concrete in a report that's how you.price things out five units which.happens here so you got to have you got.to state that upfront.now you to prices for the various.elements if you have that not every.contract there's your prices but if.there is a change that has an equity to.the owner or the contractor that you can.adjust that so where this comes into.play.this paint is a good example of 9-2 is.so going back in the in the early 2000.third over 2000 there was a lot a lot of.work going on in China I mean there.still was a lot of destruction in China.but such that the day of buying almost.like a huge percentage of the rare.metals that were being on the world in.the planet copper gold silver for wires.for plumbing for for various electronics.thing.going into the buildings they're buying.all the raw materials and as a result of.that or even steel drywall was going to.do because there wasn't enough supply.because it was all being bought the.prices were through the roof.and so if you priced out in fact they.were buildings out of East Coast but.remember the New York had started under.construction hi Ryder.that couldn't be finished because the.contractor was going to lose so much.money is that all build you this.high-rise for 128 million dollars they.priced it out at market rates they.started construction China came in and.bought up the market that's a steel.drywall copper silver tin width of the.roof that 120 million dollar of high.rise with the 250 almost doubled in.submissiveness was ridiculous and the.contractor just walked away and left a.bunch of super structures just sitting.there because they couldn't do that.now hopefully it's not so bad but that's.what has to happen a myth is that if.there is a price that's outside so if.the unit price is agreed to and it.adjusts for escalation then lifts as.they need to be equitably adjusted now.sometimes the orange is stable it's not.equitable to be - if the cross.rebuilding is quite as much you promise.to do it from the 120 I'm not going to.pay you the 200 whatever it is this is.all different things you can add clauses.for escalation and if to look at the.market and this is somewhat of a.forecasting of communication between the.owner and the contractor but the purpose.of nine shoe is to make sure we excited.on this unit cost there was too much.later need to make an equable just one.other area that night you will cover the.prices if you're doing I think I got a.project right now that's going where.they're doing tuckpointing and sealing.the building they're fixing the brick.and everything else and they're doing it.for brick for some of the per square.foot and some of its actually four.pieces of masonry unit we're pulling out.this brick and put a new one.sometimes when you pull out that brick.what you find behind the wall is.suspecting the bricks on the back side.they look really nice on the front but.your thought you're a native three now.it's going to be twenty that would be.another place where the prick price.stays the same but the number of bricks.that have to be replaced go up and.therefore there's an equitable.adjustment there to the country schedule.the values nine point two so schedule.values is a list it's a stipulated.summer and when you're doing a.stipulated colleges would lump sum or.guaranteed maximum price the contractor.needs the submit what's called a.schedule of values and that's before the.first pay application and then it's.going to be pointing out with the prices.of the work are for the project so the.schedule is subjected to which of the.users the basis for reviewing the.contractors applications for payment and.a change to the schedule value should be.submitted to the architect for review so.a schedule of values is going to be a.unit of all of the work that's going to.be done on the project's going to say.excavation footings concrete steel rough.carpentry finish carpentry electrical.plumbing lighting every single.discipline that's going to be in the.building you're going to identify it in.the category and then the next column is.going to have a price and then the next.column after that may actually have a.time frame but it's going to be.ultimately show whether it's percent.complete or how much is coming out of.the price it's just a list of all of the.trades and all the disciplines that that.when it gets to the very bottom if it's.that million-dollar house it's going to.add up família dollars.all the various things is called a.schedule value that the value of each.line item of work being performed and it.includes even the contractors overhead.properties all going to be listed there.in the schedule does so they need to.submit that so the owner knows what the.project price is going to be and see how.the builder going reason why it's only.in a sub lump sum or a guaranteed.maximum price is because if it was just.a cost of the work but they open-ended.and the contract is just one by one.every month giving you his back of the.voices so they don't have the schedule.value strapped some expense with that in.this is one of the most what I'm so if.you if you have any that when you put.together the exhibits for a construction.contract here to have the drawings and.specifications that's the most important.here they need to build that build from.that they're going to have the project.schedule that's the second most.important your timing there to have the.price and then they're going to have the.schedule values those are things you.want to have on every contract so you.know who what we're home with and the.schedule values is the what and how much.that's going to be listed there.by three for payment otherwise there is.a contractor's invoice now they caught.fittingly enough they call an.application for payment as opposed to an.invoice because we may submit it as.we'll see as we go through that the.architect gets to review and may not.agree with it so that's like an.application for payment and it may also.may be revised and change but by large.that's already been operating agree to.associate the contract there so.submissive architect and itemized.application for payment prepared in.accordance with the schedule values so.it's going to look so even schedule.values with 25 line items and it's going.to have in the beginning the very top.excavation foundations feel so the very.first calf ever to go down it has.carpenter your finish carpentry some.windows and things that very first pay.applications can have their very same.line items as if scheduled I'll use.they're going to looking back the right.each other epic for the first half it's.only going to have money being requested.for excavation and foundations so that's.all the work that's been done.you're not going to speed and let they.had their like pre-order windows and.doors anything down below so that's.what's gonna do it's going to reflect.them look like the schedule values and.it's to support all the data but Stan.shading the contractors right for.payment that the owner or the architect.shall require sometimes the order was.the thing very detailed back up I want.to see all the sizes sometimes they just.want to see an invoice from.subcontractors so this is kind of gifted.determine with the owner in the.architect require what's the backup.necessary sometimes an application for.payments especially on a lump sum would.be based only on what's called the.percentage of completion.so I got a schedule of values it says.excavation $300,000 and the first.payment application comes in and said.excavation you will be a hundred and.fifty thousand dollars presumably that.means that 50% of the work was done so.the architect picks up a station they.walk out the project site and they see.half a hole or maybe they don't see any.hole and they make a determination is it.really percentage complete they're not.asking for the backup they're not.looking for the invoices from the.excavator and how much sir the backhoe.rental was and how many the man-hours.and how much dirt cubic yards of dirt.would work hold on the architect on the.percent complete will make a visual.inspection to determine whether in fact.the art of the contractor has finished.fifty percent of that so there's that's.one of the specialty things that.architects for them and actually banks.they have the whole construction running.office they walk the project site and.look to see percent complete so they may.require very minimal backup but if it's.a monster GMP they want to fee every.invoice so just depends on what your.deal is left with the computer.any questions on then ninety three point.one point one as provided in seven point.three point nine that was like that the.change order sections the applications.may include request for payment on.account of changes in the work that have.been properly advised authorizes a CCD.but are not yet as a change order so as.I was saying before you may have not.agreed to the price of the CCD or the.change order but the contractor doesn't.want to be the bank so they are allowed.to invoice before that CCD has been.approved and so you're allowed to put.that price on your application for.payment.nine point three point one point two.application for this shall not include.requests for payments which the.contractor does not to attend and tend.to pay a subcontractor now that's kind.of like why would they have them on.there why would they stay well it's.because sometimes contractors who over.invoice and they have a dispute with the.subcontractor that the work wasn't.performed.we're holding or maybe they are.invoicing in advance I know I'm going to.be paying my subcontractor I have a deal.with my steel supplier for $200,000 that.steel is currently being fabricated I.have a contract I have an invoice or I.have a proposal but I haven't been.invoiced by that steel fabricator the.contractor cannot pre bill you for work.that they are not intending to pay what.next pay application there's all this.prompt payment language everything else.but you will find that contractors try.to front-load projects try to put as.much billing up front as they can long.lead items and otherwise but if they.have Mac or don't have an obligation yet.to pay a sub they can't English you.eventually they will but not at that.point early 93 - unless otherwise.provided - cactus k.michelle be beta to.counter material equipment delivered and.suitably stored at the site so this is.actually kind of an important point that.often is lost on odors and how this is.written up by we tweaked it a little bit.when I do my contracts I had a project.once where an owner ordered a adhesive.equipment that was worth about thirty.million dollars.it was delivered to the project segment.and it was stored the fence right.outside the project slave the owner paid.for it that didn't get title because it.had not been brought over and there was.a dispute because the language didn't.talk about idle training over until the.project was completed and so there was a.huge dispute in the project about the.owner and contractor and who was going.to do certain work and the owner had.already paid the 30 million for this.piece of equipment that you can see it.was literally on the other side of a.chain-link fence.but the owner didn't own it didn't have.title that was a big mistake by the.owner obviously for the contractor.ultimately in the dispute used it as.leverage to get more money said you paid.on these change orders and I'll put that.piece of equipment on your property and.you can use it and they look like I.already pay for it like yeah but the.contract doesn't require me to turn it.over until the end of the project and.you owe the elsewhere and they use it as.leverage so this one talks about it.needs to be they have a kind of.materials equipment delivered and.suitably stored at that price so here.you want to make sure that the owner.doesn't pay for until it's delivered and.they have it and then we talked about.getting title and everything else you.could also have things stored off the.site but suitably stored off the site at.a location agreed upon in writing in.this instance it was literally off the.site by effect link but it wasn't agree.to who was to have ownership so what we.put into there are contractors we talked.about that if there is off-site storage.title passes to the owner upon payment.of in Belize so you don't care where it.is in the world the owner owns it and.you'll find himself in this position so.that's what you want to do make sure.that you have your owner and that.security of them give a position some.time the Barrett victimizing your owner.about that and.you make sure they understand payment.doesn't mean you get title you need to.write that in upon payment title is been.transferred 933 and this is what if.there's a missed contract which helps.with the contract awards that all title.to all work covered by the application.for payment will pass to the owner no.later than the date of payment so this.contract covers them this contract is.written in to say when you pay title has.transferred other ones do not the one.that we had which is 30 million dollar.piece of equipment off-site did not have.that language you look at a form like.this and then it also says the.contractor is making on best knowledge.information belief that the type of.property it's free of all lien claims.here the interest encumbrances in favor.of the contractors subcontractors me.nobody else has a claim to that.sometimes you may find a situation where.that big piece of equipment that's being.delivered the manufacturer of that.hasn't been paid themselves and so they.may have a lien against that and so here.the contractors saying hey when you pay.me you get it I'm telling you that you.getting it free and clear the deck gift.is that mechanically issues which we'll.talk a little bit later this week within.this agreement any questions on this so.far nine four certificate of payment so.the contractor has provided you the odor.and application for payment and it's not.the architecture review that the.architect review this.according this contract within seven.days after receipt of the contractors.pay applications they either issue to.the owner of certificate of payments say.I agree and you're allowed to pay for.the full amount or they issue a.certificate of payment for such amount.that you determine this properly do so.something left than the full amount or.withhold certificate of the entire.application for payment saying that.there have and providing a reason for.the withholding of the entire pan three.often does not happen but it could be if.there's some major breach in the.contract that you want to withhold to.happens very frequently especially if.you out a percent complete that example.that I had contractor had a three.hundred thousand dollar excavation they.bill 150 thousand the architect walks.out and sees less than a whole half of.hole dug they're gonna say you're not at.50 percent contractors gonna say yeah.but we had to run the backhoe and those.are the cost and the car detective will.figure them out and so there was old.payment of a certain number of what they.feel is fair and accurate 8a away a.prudent way to avoid two and three.occurring is for the architecture and.the contractor and the owner to do.what's called a pencil draft that's not.in the agreement because something you.guys will probably do.so pamification is typically do the.first is a month xxx you know summer on.the end of the month the beginning of.next month for the work that was.performed in the past but you often have.the parties do was on day 20 they sit.down and the contractor has already.prepared a draft they called a pencil.draft or the path application for.payment because they know what the cost.they've had up to 20 days their nominee.out man-hours and what they material to.the mail and they know what materials.are going to be delivered over the next.ten days and how many man-hours we work.so they can make a projection to kind of.fill in the blanks and so they sit down.between the party and say we're going to.go over the pencil graph and at that.point in time the architects can also.make estimates and so what they try to.do the party if they try to come through.with agreement between each other.of what the value should be and so that.the numbers of the pencil draft on.January 20th may be tweaked a little bit.when it's submitted on January 31st or.whatever the dates are so that's the way.you can avoid a partial of certification.or a no certification and always get the.number one here a certification for.payment is by making sure the parties.agree before that real final invoice is.submitted.9:42 the issue is a certificate for.payment will constitute a representation.by the architect to the order based on.their valuation will work remember to.the best of the architect information.knowledge of belief this is language.from the b101.de thing but the workers would perform.that where the contracts are saying.basically yeah I agree with them or.where I don't agree with them and if you.remember there was language of the b101.that said it's for the best of your.knowledge but it's not a hundred percent.it's not a guarantee you can't hear and.she if the owner the contractors that.stated sub just sort of stuff.see architect has some wiggle room in.here but if this is the architect.blessing the pay application and in fact.as we continue 1942 this someone the.architect is not made exhaustive or.continuous on-site inspections they ever.review the leave the method they haven't.seen of the subcontractors who paid or.they haven't made an examination of.where the where the whether contractors.use previous money to pay to subs this.one two three and four others under nine.four to the exact same language as you.found in your b1 just like before nine.five decisions through a whole.certification the architect architect.withhold certificate payment in whole or.in part if it's reasonable to protect.protect the owner so one time let's say.there's some times where this happen.contractor submits an application for.payment for $275,000 architect walking.site looks at the backup documentation.and yes it appears that there's two.hundred seventy five thousand dollars.worth of work so we're all good.do the architects finds out that Aleve.is going to be filed on the project by.one of us by the electrical.subcontractor or the architect knows.that the project is going to be delayed.such that there may be liquidated.damages or the architect knows that some.of the work even though the shorter.$75,000 was properly invoiced.some of the work was defective and.you're going to have to rework it in any.one of those instances the architects.entitles who withhold a portion of that.application to protect the order from.defective work from project delays or.means in other words so that's what this.business is making sure that we're.protecting the owner and not paying out.and there's later provisions that allows.the talk about in more detail and then.we add provisions in our contract we'll.add to this section here in other.sections more specifics about how much.you can withhold and the timing one.hundred one hundred fifty percent of the.value of the defect another way but this.is kind of the general that says you.could withhold to the meet to the extent.reasonably necessary to protect the.owner and then if they're unable to.certify to the pay application they got.to notify the owner of the contractor.and then they try to get a revised.amount business and this is why this.part here you why you want to do the.pencil graphs this is kind of after the.fact for your discussion before you.submit the formal payment as opposed to.actor because the actor part year three.adversary of things and lawyers and so.forth looks great for me but not good.for the project and then you kind of.then when you can come to an agreement.and then the architectural issue a.revised certificate for payment for.whatever the value is make a.representation be over and then here.ninety five is going to talk about this.is what I was thinking why they can fly.they can withhold defective work that's.not corrective third party claims file.that could be lead.they're the contractor to pay subs.schedule revision of the work can't be.completed within the unpaid difference.price-wise because it can't be done.within the context um damage to the.owner reasonable that will be finished.within the contract time or just a.general catch-all repeated and failure.repeated failure to carry out the work.in accordance with the contract.documents so there's lots of reasons why.the architect and they say yes it looks.like you have properly invoiced me for.$275,000 but I'm only going to approve.200 because I have to protect my honor.that's what all these are just some are.related for any questions learner if.there's a disagreement under nine five.two on either side between the owner of.the contractor they can turn their.article 15 to make a claim ninety five.or if the architect with full strip get.a payment under nine five three one.three the owner made of so option issues.joint tax checks to a contractor or.subcontractor so I have had this come up.for the number of instances here's.here's an example contractor issues a.$275,000 pay application at the same.time the electrical sub files a lien for.a hundred thousand dollars.now another that $275,000 relates to.electrical work the lien was because the.contractor hasn't paid if electrical sub.for work that was done two months ago or.maybe three months ago whatever like the.intellectual sub bike what do I have to.do what I am NOT in contract with the.owner I can't talk to the owner so they.found a mechanic clean on the project.actually an incumbrance on the title to.the project a mechanic's lien takes.priority over everything over the banks.mortgage over everything if they want to.pro closed on the mechanically so the.Oder now no that is aware because.there's been this notice of mechanic's.lien that if subcontractors raised its.hand and said I'm owed $100,000 for my.work in order to looking at this.$275,000 pamification says well there's.no no invoice for electrical here we do.talk to the contractor he goes and talks.with contracts it says why why is this.sub asking for 100 grand.oh I don't think there is issues with.the work and we're having problems with.them on another project like don't care.about your other project that's your.project that's another origin problem.it's not my problem.did they do the work here yes if they do.the work right well we have some issues.with it so you call your architect the.architect goes out and checks it out the.via the work looks fine.you don't want to have a lien as the.owner on your project on your property.because if you're using that property.for save a bank loan or collateral or a.whole host of things and that leaves.sitting on top of that is to become.worse and also mean this litigation at.any given time the Contra subcontractor.can sue you with a higher lawyer reveals.so what happens sometimes under nine.five four is the owner says to its.architect of the $275,000 you're only.going to approve a hundred and seventy.five thousand dollars and I am going to.issue to the contractor 175 and then I'm.going to issue a joint check to the.contractor and the electrical.subcontractor for the value of $100,000.neither the contractor nor the.subcontractor can cash it without the.other person's joint signature but at.least the electrical subcontractor.realizes that there's money sitting.there.tractor can't hold on to a keep and it's.for the subcontractor it's made out to.the subcontract to the destroyed and.that they may not file a lien on your.property or they may removal in because.there's money sitting there waiting for.them what everybody kind of works two.things so that's what happens here is.sometimes you do that because there may.be some personal dispute or squabble or.like the contracts if you don't like.their work on another project you don't.care about the oppression we care about.yours.so there are reason it doesn't happen.often it doesn't happen often because.when you do this the contractor thinks.usurping its positions with its own.phrase but sometimes you have to do that.to keep your title clear and I've done.this on a number of projects where well.there was I won private affairs all of a.sudden we had some issues and everybody.can't win the next thing you know.there's 25 lien trying to get to the.problem and some we're good leaves.become a bad leaves and somebody just.wrote checks to the trades and we said.to the GC really here's a joint check.clean it up fill up so sometimes it.comes up yes special a good leave versa.badly that's a great question if you're.a subcontractor everyone you can lose a.badly maybe it could be it's not timely.file is a badly so so it doesn't mean to.have statute of limitation special.limitation of a file so that's a bad.lead or the sense of bad for the.subcontractor good for the elder a badly.could be again badly for every rupee.owner where they overstate the value or.the amount so they say their own 130,000.they're really old on only a hundred and.it is question to whether there's fraud.or whether they're overstating has been.bad potentially badly for the owner or.for the cut the sub could leave for the.owner a badly could be though on the.other side where it's so murky that.being feeling was trying to figure in.sort Pierrot sometimes isn't worth it to.go through it so so there can be.technical legal reasons like that or it.could be just how it impact the project.is itself like like why should there be.a lien on your pride.with the contractors not payment sub if.it's due to a dispute on another project.he'll you say to the contractor this is.a bad knee again this there holds its.money but why are you having to file it.if you have a problem another project.you deal with that a man over don't put.it on mine don't Clause them and your.issues there to impact me and that's so.it's a valid lien but it's bad for the.project so yes yeah as opposed to look.like if the statue limitations issue or.properly stated that maybe the question.between a valid and invalid a greater.badly is like but they're never asked an.owner there's never a good reason ever a.good time when they leave the project.but there may be ones that could be.easier work out that extent others like.I said if it's unrelated to your project.that's really a bad link is just.possibly when you it doesn't make them.Carver standards are nice legs so after.the architect addition certificate of.payment of the owner makes for payment.it's provided the project documents or.they're still buy a check or by escrow.or have you and then under nine six to.the contractor shall pay each.subcontractor no later than seven days.after receipt of payment from the owner.this is up what's called a comp payment.laws so when I give that hundred.thousand dollars to the general.contractor they have seven days if it's.not by joint check they have seven days.to make payment to the sub if they fail.if the contractor fails to pay within.seven days of receipt of this money.arguably the contravene breach because.they the contractors promising to the.owner I'm going to do problem David.because the sub need to be stained to.pay their bills I'm going to do prompt.payment and if the sub don't get paid.properly they're going to file.mechanic's liens on the project and then.the contractor shall by appropriate.agreement with each subcontractor.require the sub to make payments for the.sub subs in the similar manner here is a.flow down provision where it actually.says in black and white you must slow.this down so there's provisions in.article three that says everything to.this contract needs to go reveal the.subject to it there's provisions in out.of five that those contractors must.abide by the provisions of this one but.here is a specific provision that.specifically says you must flow this one.down and this is again one of the.reasons that comes out of litigation.everything else because sometimes well.used to have many many years ago that.had word said contractor makes they.needs but promptly pay as subcontractors.or something for that effect and then it.didn't say anything about downstream and.so maybe a contractor would pay in ten.to fifteen days to the sub and then the.sub table with a mature amount of the.vendors will have you they're just.waiting around for a month a month so as.the money gets stretched out so this is.trying to make sure everything is paid.quickly by six three the Arctic will our.request furnish to subcontractor.information regarding the percentage of.completion amount blah blah blah.so here what nine six three says is the.subcontractor is going to submit it.invoice to the general contractor.most subcontractors work off of time in.the shears the contractors project may.be submitted on a percent complete so.they may not match the numbers may not.match no doubt the subcontractor is not.going to see the contractors overall.payment applications because it's got.every trade the electrician's only cares.about is money they don't care what's.being paid to the concrete guy or the.steel guy or whomever else so if there's.problems or issues where the contractors.not paying the sub the amount that the.sub believes it's entitled to in this.case maybe for my example one hundred.thousand dollars the sub can contract.the Oh contact the architect they hate.can I see what percent complete we're at.can I see what's really going on for my.work because they're telling me you guys.aren't paying me or whatever the.contractors saying so here 9:53 is just.giving a heads up for the contractor not.only you have to pay under nine six to.within seven days but under nine six.three if you're sniffing your.subcontractor to the value we're going.to have the ability to look under the.curtain under the hood and give that.information to these subcontractor.ix explore the owner has the right to.request written evidence for the.contractor that they have properly paid.their subcontractors so not only do we.give the contractor notice that we're.going to give some information to the.sub keep you on it we if we want can ask.for information to show that you've.actually paid your subcontractors and.that information has to be provided.within seven days so it's again keeping.everything moving in payment this is so.what happens here under nine six four.when you hear or you get this lien from.the electrical subcontractor for the.hundred thousand dollars you rely to.write a letter to the contractor and you.say pursue tonight's explore what's the.deal I want to see proof that you've.been paying them because they stay there.oh the hundreds and and I don't track.that because I pays you for their work.seems to be done properly more effective.their work was good why are they saying.you haven't paid them provide me proof.and within seven days say with suppliers.96:5 if suppliers of it as opposed to.subcontractors so if they have just.direct materials nine six six the.certificate for payment a progress.payment or partial or entire use for.occupancy of the project by the owner.shall not constitute acceptance of the.work that's not in accordance with the.contract documents so what does this.mean basically what this says is just.because I hate you for the word doesn't.mean I'm saying you did it properly.and in fact a lot of times you may not.know that there's a leaky roof but if.the electrode was done improperly.because it's behind a wall.the architect who's walking the site may.be there only once a week or once a.month well only be needed and may not.know so if you remember the lawsuit that.I told you about last week with the.interstitial space and the how they has.changed the way the ceiling and.everything was put together that case.the owner was the developer but in.another instance if that was a different.odor there's so much that they wouldn't.know with how the project was built.because the architect was really on the.project site so this is basically saying.hey I still can sue you if he did crappy.work just because I paid you doesn't.mean I can't get the money back I just.didn't see it didn't know it you're.still obligated to perform good work.nine six seven reference is what's.called a painted bond and we're not.going to go and spend a lot of time we.talked a little bit about bonding on how.the insurance lecture so I'm not going.to get great feel into that but this is.just basically a reference that you can.have a bond on the project as a real.brief though there are two types of bond.one is called a payment bond what's.called a performance bond the.performance bond is between the owner.the contractor and it basically says.there's a bonding company assuring he's.sitting out there low often part of it.at first company but not really.insurance the bonding company is going.to sit there and they're going to kind.of be over the shoulder of the.contractor and the bonding company is.guaranteeing to the owner that the.performance of the work under.performance bond will be completed for.the dollar figure that the owner agrees.you.contractor order entry with a contract.to build a house for a million dollars.there are zero change orders to the.project contract to go to bankrupt the.surety steps in and it's going to.perform the work.however by bringing in their own.contractors or what have you and will.complete the house for no more than a.million dollars.the owner only pays the million the.shirt you may have to pay more but it.doesn't matter that's what the.performance bond is that's between the.owner and the contractor and the surety.a payment bond is between the contractor.the subcontractor then surety.same scenario older has a contract to.build a house for a million dollars.contractor goes bankrupt a bunch of subs.are owed money for their work and once.you finish the work the surety steps in.on the payment on and pays those subs.for the work they have performed to date.and will continue to pay them out.complete the job so that's the payment.flow down surety contractor sub formats.bond flows up the contractor owner sure.to make sure the money goes in the order.of that to pay more than a million.dollars it's all you kind of really even.know for purposes above the bond in this.instance 968 provided that the owner has.fulfilled a payment obligation we want.that pays you for your work done the.contractor shall defend identified the.earth losses liability damage blah blah.blah Greenville attorney fees rising out.of any lien claim or the claim or.payment by a subcontractor so this is.basically saying if you get an invoice.if you get a payment applications the.owner get the payment.station for the contractor and we have.this instance where the electrical.subcontractor files with $100,000 rain.it's up to the contractor to step in and.pick up that cost whatever it is to.defend identified will identify for this.defendant demouth I mean there's.litigation the subcontractor files.before closing lien it shouldn't cost.the owner anything because the owner has.already paid the contractor hundred.thousand dollars so it's the president.so long as they fulfill the payment.obligations long if I paid that hundred.thousand dollars to the contractor for.the electrical work when the electrician.files the hundred thousand dollar.mechanically the contractor has to step.in the middle and take care of indemnify.it keep us from having a page write the.check twice it makes them.yes can the owner make claim figures or.subcontractors is that your question.so the answer to that is no because if.the pencil if I write the contracts to.allow them to be called what's called a.third party beneficiary but in general.its no because the owner has a contract.owner and the contractor and all the.scubs river underneath have their own.separate contracts just for the.contractor so there's not what's called.contractual privity the only time that.the owner will have a and it won't even.get clean but the owner will have this.interaction legally with the.subcontractor is that the sub files are.mechanically foreclosure says I'm holds.a hundred thousand dollars and so what.the kind what the owner may say is but.your work is defective so they will use.it as an affirmative defense but all of.the owners claims for defective work for.delays whatever the damages that the.owner incurs unless they're so specific.like end-around language and even reason.you left for that which is not standard.the conflict the owners claim that the.owner has a loss is only against the.contractor and then the contractor must.look down to the subcontractors so if.there's an electrical problem on the.project the owner goes into the paddock.the lights don't work there's a small.fire whatever it might be.all likable we know if the electrician.we know the electrical company to.perform the work the owner sues the.contractor the owner does not to the.electrical company.contractor then sues the electrical.company okay so we said yes.later food videography older has a.problem sues the contractor the.contractor will be the defendant so what.will happen is is if there's a sort of.let's say for my example there's an.electrical issue.the owner will sue bring a lawsuit.against the contractor and be identified.a plaintiff order is suing defended.contractor for the electrical problems.and all the allegations the contractor.event file was called a third party.claim and the third party claim will.mimic all of the allegations against the.contractor but will now say contractor.is suing subcontractor and they will.become a party to the clay to the case.so the contractor and the subcontractor.will be in the litigation together so.subcontractor will be known as a third.party defendant so they will be at the.table they'll be at the negotiations the.proofs will be all put out there so and.that sometimes it's sort of the strategy.that goes into is whether something like.I have had many situations we're.representing an architect and the.architect gets sue for design defects.but the architect didn't divide it but.they this is its electrical design as.opposed with electrical installation a.lot of times I will recommend to the.architect do not sue your electrical sub.consultant they're like why not make.sure up first you say well how do you.know the screwed up maybe they didn't.screw up.let's let's start there enter the.question if you sue if the architect.sues the electrical sub consultant the.only way the architect can.is to prove that their sub consultants.was defective but because your contract.architect is with the owner as soon as.you prove that your sub consultant has.defective design you're responsible to.the owner you have effectively done the.owners job so often what you'll do in.litigation.depending on statute of limitations.depending on the case in our life.sometimes you'll have a situation where.you will not you'll enter into life a.adjoint defense agreement with that pump.its own they working cooperate together.but you don't sue them and then maybe if.it turns out that the case is going to.go sideways and in fact the architect to.the sub component electrical sub Capone.did screw up and the architects going to.get maybe then you bring a lawsuit you.have to look at statute of limitation.there's timing-wise.sometimes you do bringing it but there.are very good reasons why not sue I.think I've talked to you a little bit.about the case where I was represented.the pump manufacturer out in the city of.Monmouth and we had a contract with the.general contractor the city sued the.general contractor and part of it was a.defective pump general contractor never.sued us is a general contractor never.pump with the pump was defective and.either to me so the city had to do an.end around the Suisun fraud and there.was all these other issues of that but.but we were never sued by the general.contractor we had a joint defense.agreement with them we cooperated with.them and we all use our own collective.knowledge to gang up against the owner.so there are reasons why but then but.technically back to your original.question if there's a problem the older.kids through the subcontractor the.owners to the contractor contract the.third party business hood contractor and.everybody hit the dance together.okay nine seven fail your payment if the.architect doesn't issue the certificate.of payment - no follow the contractor so.it's not a problem with what there is.within seven days and if the or if you.ordered is obtained within seven days.the amount that was certified the.contractor may on an additional seven.days notice to the owner stop the work.until payment has been done that makes a.lot of sense look if we're going to ask.alpha nine six that the contractor has.prompt payment to a sub downstream it's.got to be fair that the architect has to.review the pan application within seven.days and the owner has to make payment.with so the day for that and the next.rest' only fair and if I'm not getting.paid as the contractor that's not my.work because I unless you can tell me.that I should be paid unless you're.withholding for valid reason whose good.work.you have maybe I'm not working for you.so that make friends 980 substantial.completion so as I said substantial.completion is we're here they say this.so that the owner can occupy or utilize.the work for its intended use so that's.basically that's the definition of this.agreement the other one is as I said.that I use all the time that's it for.its intended use and purposes is it.shirt is another way of saying the same.thing ninety-two so the third when the.contractor considers the work or portion.thereof is sometimes you have multiple.substantial completion triggers when.they consider that it can be.substantially complete the contact of.shall paves prepared slip the architect.a cover of a comprehensive list of items.to be completed a corrective prior to.final payment that's the punch list 92.so what happens is Patrick er says your.factory is complete substation complete.and here the list of the only things.that are left to do to get at the final.completion.but that's where we think where do you.think we're not except for this.punchiness that's what's submit those.are 982 now a 3 is once you get that.lift from the contractor the punch list.the architects will make an inspection.to determine whether the work is.actually substantial complete so it may.not be the real punch this but maybe.while you think this is all you things.you need to get done and you're not the.case you complete and add these few rips.or you think these are just punch list.items but you know you say your.suspension complete with the house but.you haven't installed any of the.appliances in the kitchen.that's not punch list well they're come.and they're on order just scared we have.to just bring them in and hook them up.no big deal going to take an afternoon.yeah but we can't use the house forces.headed use the purposes about the.kitchen appliances it's not push list.you're not substantially complete so.there's there's a given tape and push.pull that happens between contractor an.architect on substantial completion and.what's on a punch list and what's not.the contractor shall before issuance of.the certificate of completion complete.or correct such items that the architect.is notified so if in fact the kitchen.appliances do show up and get installed.then they can reissue and ask for.another inspection to see if they're.substantially complete if you remember.in the beam 101 agreement under article.6 but they get sorry article 4 4.3 it.had how many times you're going to visit.the site every time as you review us a.little like four point three point one.how many times he review shop drawing.many times you of the other projects I.one of them is how many times you're.going to inspect for substantial.completion and that's all built into one.or two times of an after that it's an.additional services so that's where this.is triggering it sometimes there's going.to be more than one visit by the.architect that see if in fact the.project is substantial history now a.four with a worker designate a portion.thereof is substantial complete the.architects shall prepare the certificate.of substantial complete completion and.that shall establish the date now why is.this such a big deal I mean look if I.can go ahead and use the house and start.cooking or I can start making my toys is.that all I mean why do I have to have.the certificate why this formal process.two big reasons number one in the.payment process when you submit via.invoice what's going to happen is.there's this thing called retainage.withheld and we'll talk about that in a.little bit but for every application for.payments submitted by a contractor the.traditional figures 10% the owner is.going to withhold 10% for change.contractor has already earned it it's.their money but the owner hold on to.that as kind of an incentive to make.sure the contractor actually finishes.the job there have been many many many.instances before this whole concept came.into play where the project got the.substantial completion the punch list.was prepared and the owner took its.money and skipped town and never came.back because they were paid most of.their work in there like that.okay but if you withhold 10% to go ten.percent of the two million dollar.project there's a big chunk of money.sitting out for the contractors to come.back in and do the conscious work to get.their sugar grand.so here substantial completion is a date.when retainage is released well maybe.not all of it the fitting of how you.negotiate a lot of times people release.only half of it or certain amount but if.they big time as the projects get larger.and larger you know 10% of a 300 million.dollar project is a huge chunk of money.that the contractor wants relief so.substantial completion is a big deal.I want my certificate to release my 3.million and retain it's just a lot of.money that's going to get released.that's the number 1 number for the.contractor on the contractor side the.other reason why this certificate of.substantial completion as a.hard-and-fast date is important for the.owners benefit is that is when.warranties start your 1 year warranty of.workmanship your 5 year warranty on.doors and windows your 20 year warranty.on your roof whatever that might be.the warranty clocks are ticking with the.certificate of substantial completion is.issued so that's why they make the.formal process a big deal because it.triggers money and repair obligations.the force escapes completion anything.that went wrong in the project and.defect contract is filed after the.warranty issues so they look at it.differently questions of it 9 85 upon.expected and consider the surety if any.the owner so makes payment of retainers.and here it is flying the work identity.and of course you're out so this is.specifically stating a this is one.change for the good riddance.99 partial occupancy or use the order.may occupy or use any completed portion.or partially complete a portion of the.work and the such partial put occupancy.may be but to be convinced whether or.whether or not the portion substantially.complete provided the owner in the.contract of accepted writing.responsibility for gaining relating.feature them for paying entertain as.otherwise so why would you go into a.project before will substantially.complete I mean doesn't make sense but.it made so if I'm developing a condo.building and I'm selling condoms I'm.carrying a construction loan of the.owner developer the construction loan is.traditionally going to have a higher.interest rate than a traditional loan or.if I can sell those units my load is.reduced because I'm making money by.selling units so I have a 10-story kind.of building I'm building first story is.going to be the shop in the office we.talked a little about this and it's.going to have parking and then it's.going to be nine stories of units if I.can spell and allow people in in three.blocks the three four V's then I'm going.to be able to get a return on my.investments whether it's condo a little.a trendy and I'm going to get money.coming in to me and I can start to.reduce my construction loan of carrying.a higher interest rate so the overall.building is not prestige to complete but.I may have completed or created a.interim trigger date of turning over.substantial completion for certain.portions and so that's where you have.partial occupancy or use or maybe you.need to get into a factory and the.factory portion starting to work but the.office space isn't done there are.various reasons why you might want to.get into a building before it's complete.largely economically driven maybe it's a.family that used to move because they're.getting and there had to get out of.there the rental unit whatever it is and.they need to move into a house so.there's very few so what you talk about.here is they have to have the acceptance.of responsibility for each lady payments.and otherwise and liabilities so you.have to come to an agreement if I'm.going to be in there early you got to.know what the actual construction site.and so forth and there may be separate.discussions but at least the agreement.here recognizes that there can be.partial occupancy and then very at the.idea of the stage of progress of the.work shall be determined by written.agreement between the owner and the.contractor or no agreements reached by.decision the architect somebody has to.have something a trigger of when you're.going to move in so contractor comes.that I got the first three floors done.have the architect inspected will have.an interim substantial completion date.that's not final substantial appreciate.something to that effect 1993 unless.otherwise agreed on partial occupancy.use or portions of course of the work.shall not constitute acceptance of the.work not complying with the contractors.stay anything like payment just because.it's hazy doesn't mean I think the work.was done right it just means that pages.you still have the obligation to observe.it correctly same thing here just.because I little did doesn't mean that.you did it right you still have your.obligations of the contract to perform.your work correctly nine ten now work.final completion the final payment.so what's going to happen upon receive.the contractors you notice the work is.ready for inspection for final payments.the architects go ahead and do that.performed an inspection so it's going to.be a notice I'm substantially complete.by the contractor architect though this.job.now here's notice when I'm finally.complete our check does its job there.and they need to promptly issue.certificate idle payment for shipping.over the final sticker to payment to the.best of their knowledge etc etc same as.the same language you saw for.substantial completion 9/10 - neither.final cadence or any remaining received.percentage shall become due until the.contractor submits the architect that.affidavit of payroll so this is the lift.because sometimes they call this the.closeout list or final file completion.list so they have to provide these.things and they won't be the contractor.will not get paid even that the.architect that said it's certified them.complete the contractor the owner.doesn't even make payment or the.contractor gives the following after day.there they'll payroll everybody's been.paid.evidence that the insurance will remain.enforced until final payment written.statements of the contractor those of.the reason that insurance will not be.renewed consent to the surety if.necessary if there was a bond that.they're going to it's okay to make.payment any special warranties five or.other data that their owner requires.receipts releases otherwise so you.create this final completion list.turning over of operators manuals all.the warranties all these documents and.they put together a book for you or.binders and say here's all the.information and upon respeaker back.then you release the last with the.rechange whatever the final amount for.the road and everybody can go barely on.their way if a subcontractor refuses to.furnish or release a waiver required by.the owner the contractor may refer to.bonds satisfactory to identify the owner.against such claims security interest.otherwise so here's an example where.let's go back to that subcontractor that.had that hundred thousand dollar lien.contractors got everything else done the.owners happy with everything else but.there's this dispute still with the.subcontractor and maybe the value the.project is what's sitting in the final.payment the final release maybe it's a.million bucks.the contractors like paint or once a.million okay I got my outer stadium I.got my warranties the architect is good.you're good.you've already worked you've already.moved in you're making your choice.whatever it is I need my billion dollars.so what can happen here is the.contractor will say I'm going to put up.a bond start filing that's going to.cover this disputes with the.subcontractor for $100,000 it's going to.be sitting over there on the side of.security once I place that out there.owner you will be insulated from the.claims or damages with the subcontractor.now please release my million dollars so.this is basically giving the contractor.an ability to close out the project.without being held hostage by the.subcontractor and you'd be surprised how.often this comes up where that that.dispute lingers long after the projects.completed and the contractor doesn't.want to be frozen so they want to use.this to their benefit and if it protects.the owner there's something wrong with.it sometimes we'll all dupe here for.this provision under nine ten - if let's.say there's $100,000 mean I'll require.the bond to be 150 or 200 thousand maybe.150% to 200% more than what the dispute.and wait coverage my legal fees or.whatever else may come up so you try to.try to get more protection but at the.very least they need to put up 100%.valued claim loss okay.if after substantial completion final.completion Arab is material delayed.through no fault of the contractor which.affects final completion and the arktech.confirms that they architect and make a.certificate for the for the payment and.then the payment is due so for something.that happens that delays traditional.final completion whatever that may be.it's not the contractors fault you can.still work through this provision nine.ten three to make sure that the money is.released nine ten four is interesting.because it says once you've made payment.now the owner is waiting claims against.the contractor number we've had these.other ones just because I paid you.doesn't we have waiving claims just.because I've who did this being aware.the claims well now here says if I have.a final payment and waiving claims.against the contractor accept any claims.that arose out of the contract that are.unsettled so that $100,000 dispute if.it's unsettled failure the work to.comply with the contract document so in.the future of the piece fails you.haven't waived that any warranty issues.you haven't way bad and if there's an.audit necessary it turns out that the.contractor has been spending more money.than they should or like the example the.question either have should be man about.people working on the project and a lot.of shows that it was over staff so those.were claims that are not waiting even.though I paid your final I can still.preserve disputes against the contractor.under some one two three and four here.on the flip side nine ten five once the.contractor subcontractor has been.received final payment their waiver of.claims except those previously made in.writing so unless a contractor has.something in writing as soon as they.take that last paycheck every other.claim of the contract.Goodwyn they need to have identified in.writing prior to acceptance or it's wave.it's a little different or says I get.the whole beast for contractor can only.hold onto those that they have.specifically identified in writing all.right they had questions on nine payment.all right.article ten protection of persons and.property safety programs contract.responses for maintaining that.supervising the safety so just we talked.about that different than the architect.safety of persons and property they need.to prevent damages to work the employees.other property on the site other.properties adjacent to it we're going to.kind of look through this as quickly.because it's not as it is I mean that's.not the safety is important them we've.talked about in the V 101 and.contractors responsible for meeting from.methods and so forth they need to.provide with all applicable laws under.ten ten to two they have to have a safe.and existing project site they have to.keeper hazardous materials an explosive.off under nine to four or ten to four.they need to promptly remedy damages or.loss and then depending on what's claws.of heugh they are indirectly or directly.and then they need to make identify.who's liable for those so those are.their obligations in addition to what.they had generally run a good clean.projects 503 eighteen for identification.nine ten to six they have to have a.designated safety individual for this.injury to persons of property under ten.to eight if either party suffers an.injury or damage noted that the injury.needs to be made within 21 days whether.or not insured so you have to give.notice if there's something going wrong.in a project that's 21 day notice.hazardous materials they need to comply.with the laws regarding the contract.documents regarding hazardous materials.and they need if there's any process to.make sure that there's no bodily injury.or death resulting from these materials.so one thing on this under 1031 for.hazardous materials let's say you're on.a project site sometimes I've been on.project sites where they they need to.use ammonia for certain of their.equipment our clothing or what have you.if that ammonia if there's something.reasonably those ammonia's relief that.the tax could be attack the cloud and so.we have to go for safety meetings before.you come to the project site or if.there's places where you need to have AI.washes or all these all these things so.so you need to do whatever the adequate.precautions to make sure that there is.going to be finally injury there's at.every single construction meeting.there's going to be a safety tip of.safety talk they're going to have.somebody talk about some safety issue.you know work Ranger your safety is a up.log flippin food of this contracted is.really critical important for the.contractors how they run the business.and so you make sure that the contracts.here require that they have been if.there is a safety condition that comes.in if they see something like in soil.that hazardous materials they left the.media we stopped work in the effective.owner expected area and notify the owner.the architect of the condition so this.would be like your digging up soil I had.a project out of Navy Pier where they.found thorium they had to shut down the.project I've in that area and identify.the owner that would be bring in the.Illinois EPA and the EPA and in token.when it was necessary for abatement and.so forth so the contractor this is one.time where the contractor can stop it's.unrelated to painted hazardous materials.I'm going to stop work I'm not touching.it it was r2 there if they didn't.realize like and then if there is this.issue if you get this notice then it's.up to the owner to bring out a licensed.laboratory and the contract of the.architect will apply to the owner.writing whether they've read objections.to the people doing the inspection so.when the project site when the project.itself has hazardous materials it flips.to the owners to clean up math the.contractor bringing it in but the.project site in existence that matters.because it's the owners site that the.owners dirt so to speak that has the.hazardous dinner.if there are issues those that are.caught the owner here if there are.hazardous materials in the projects.right in this case the owner needs to.identify the contractor and the subs for.any losses so with that the best soil.has whatever weight or whatever material.PCP or other type of hazardous tissues.in it and somebody gets injured for it.from that it's the owner that's.indemnifying the contract could be older.that's going to pick up those clods not.the contractor that's in 1033 1034 the.order should not be responsible Don this.section for hazardous to your substance.the contractor brings to the site so.this is the opposite is when the.contractor brings it on-site the owner.is not responsible for that.and then the contractor shall reimburse.the owner for caution heard for.remediating the in 1035 for fixing the.site where the contractor was the one.that brought the cassius material.website so it's a division under if it.existed already and it's kind of like.think about it it's in the ground and if.they're the owners they feel.responsibility if it's brought there the.contractors problem the contract.responsibility and who have to carry the.liabilities for that emergency looks.loose okay insurance in fine now we.talked a lot about insurance so I'm.going to go through this section I will.just give you a brief overview right now.before we go into the additional the.provisions I am NOT a huge fan of the.AAA's insurance language it's a lot.better they now have an exhibit that.goes with it they've kind of changed.some things up I feel do a lot of our.own dryers but suffice to say that the.contractor needs to carry its insurance.for commercial general liability so.people don't get hurt.automotive insurance that this is all.that we talked about in the insurance.lecture.and they'll probably have an umbrella.and then they'll have their employers.workers comp and those types of thing.and that's called for in this document.in the forms like I said there's a whole.new exhibit that has a kind of big.laundry list of all various different.types of insurance that you can use and.that's an entirely different lecture.that we will go through and then there's.going to be in that same exhibit that.separate exhibit there's the assurance.that the owners are going to carry so.basically says you know under 11 they.got a pertain the insurance and the.types of limited conditions elsewhere in.the contract documents and described.elsewhere is this other exhibit and then.they need to provide bonds if necessary.under 11 1 2 and there's a whole another.section about bonds whether in what how.big the bond are how they're going to.function and that the separate a a.document as well and then there's an.obligation if there's a cancellation of.the insurance you have to let people.know when it's going to be cancelled so.if you can keep the project of sure.that's just a notice issue under 11 1.for 11 two talks about the owners.insurance again references to other.areas of the contract documents and that.the insurance exhibit if there's of your.11 suit sue if the owner doesn't carry.property insurance from the owner has it.obligations will get much into detail of.this again the owners property insurance.is going to be canceled they have to.give notice to the architects to the.contractor just so you guys know of them.going through this obviously it's going.to no insurance questions on this exam.for this so if you want to want or those.a201.because we had a different insurance.legislation about farm flowing through.this as quickly waiver of subrogation I.will just do really brief wish you.understand this concept there's no.questions on the exam where was the.obligation only take one beat here to.explain it so subrogation.is a concept where they say our best to.describe this.I have a I got a crane and a crane.operator that's not working and they're.lifting a bunch of steel for me if the.high wind period of day if the day is.really high wind tore these giant cranes.you see and I got a crane operator and.he's moving steal from the lay down area.to the area where the guys need us to do.the installation but they're dealing.with high high winds and it turns out.that do a dust that comes in it's stage.we think it's safe it's not an issue we.believe and it'll be part of a lawsuit.will be whether you're operating safe.for her but if a microburst comes in and.not the crane over and as a result of.that the crane is damaged and needs to.be fixed.a the operator of the Cray that was in.the cab without he gets injured and then.some of the steel hits and injures two.or three other workers so you got to set.the bodily injury and then you got a.physical property injury the real.property of the crane contractor goes.through its insurance company because he.has property sure he has insurance on.the physical crane and that insurance.company pays the contract feel it pays.$250,000 fixed-rate pays the contractor.$250,000 to fix that crane so now the.contractor has no law the contractor.doesn't have any suit maybe in front of.Michael Rizzuto burgers but there's no.loss of the contractor if that insurance.company steps in that cave and wants to.be part of some lawsuit maybe they're.saying we're gonna microburst it was it.was the way the owners other contractor.have prepared the site who knows.having that there's another clause.subrogation is where another insurance.company steps into the place of the.party that loses and litigates it on.behalf of the individual it's kind of.like if you're in a car accident you.know we're here at a no-fault state you.get into a car accident and you you have.$5,000 of the damage to your car.progessive comes out write you a check.for $5,000 and then progressive sues the.other driver that's called subrogation.you're the one that had the real loss.did you launch on your car but as soon.as progressive pager your maypole and.progressive subrogate in for you and.sues the other driver in construction.there's always almost always a mutual.waiver of subrogation and the reason why.is because there are many accident the.many issues that come up in construction.cases and who wants to be fighting.against a multi-billion dollar insurance.company the insurance companies can.outlast you out lawyer you they could.spend to outspend you whatever they want.and so you want to have a mutual waiver.of subrogation of all side and that's.we're talking about here the owner and.contractor waive all rights against each.other blah blah blah relating to.insurance companies coming in but that's.kind of what I want you to understand.and take away from here I have had cases.where clients where they want to have it.only one way waiver of subrogation it.never goes well this is something that I.think in almost every construction.contract i've ever negotiated a good one.if it's a mutual waiver both sides say.if i got a claim a bitter battle u101.we're not going to let the carriers come.in let me get paid by the carrier but.they're not going to come in to the.standard Murphy.so that's that we see lots of you spit.eruption 11 for just looked at a.different types of the odor may purchase.insurance dealing with loss of use so.let's say I wanted to hit that toy.factory up and running I mean or lots of.business interruption if I can't get up.and running I can buy separate insurance.that relates to paying for the losses I.have for not getting my choice being.made on time that's another thing that.can come into projects Nancy learn.truces you have a question I can go back.to do a questioner okay okay.so that's just that just pays to do what.you need to go on this day a document is.insurance is recognized as a whole.separate agreement I will say this it's.much much better that the the new.assurance rider that the a put together.is much much better I have used it for.project as opposed to the past this.article 11 used to be like 25 paragraphs.it was so long and I would just strike.the whole thing and put in my own writer.but now they're they're new writers it's.better it's not the best but it's still.better so article 12 uncovering and.Corrections of work so sometimes it's.it's a good portion of your 12 on one.force or work is covered that contrary.to the architects requests it must be.questioned writing buddy are fixed.should be uncovered the architect.examination without charge in the.contractor or change in the Patrick type.so sometimes the architects would come.by and they're going to say well you put.the drywall up before I was able to feed.if the electrical and plumbing lines.were properly installed I can't tell if.you did your job right that's part of my.job for the odor is to inspect and you.were not supposed to button up this wall.before has an inspection chair down the.drywall I want to look at the cup I want.to look everything and then put it back.up but it's not going to be an efficient.of timer.at least that's what slow on 112 onto.says if the portion of the work that has.been covered that the architect is not.specifically requested to as Coppola was.if you already wanted to inspect it you.thought you were to have a chance of you.did 12 1/2 says if it was not requested.to be examined it is covered and the.architects can ask that work for the.uncovered if it's done properly then the.cost shall not be the contractors have.spent so if the architect of the.schedule says they get an opportunity to.inspect where the plumbing and the.electrical conduit is going to be and.the contractors covered up before the.architects had the opportunity and.everybody knew the architect limits he.met the contractors to rip the drywall.out to let the inspection happen and.then that the contractor started but the.contractor didn't know it was another.schedule it was something that the.architect just wanted to look at the.architect can tell the contractor to.pull the drywall off and do the.inspection if the work was done properly.the owner has to pay for that additional.drywall and time to make it look done.right if the owner was if the work was.done improperly it's the contractor.stuff that's what these provisions.correction of the works well any.questions that that makes sense.correction work 12 - and this is another.reason why substantial completion is.important if it's before substantial.completion if the work is determined to.be defective before substantial.completion the contractor promptly.corrects for work.that's rejected by the architect and the.costs are correcting the work shall be.the contras expense so I'm the architect.the mark around the project say I see.something done it's not done right.before substantial completion.I tell the contractor and that's.effective fix that you take care of it.your work your you installed your.cabinetry it's crooked.the floors are coming you need to fix.that tour this has been the wrong.location whatever is considered.defective if it's before substantial.completion the contractor needs to take.care of it promptly doesn't get.scheduled extension just needs to do it.hit it done that's before substantial.completion after stamp substantial.completion if you remember that's when.the warranties trigger and we're the.warranty issue if the owner that gives.notice during it in this case the.tradition of the one-year period and if.the owner fails to notify the contractor.or give the contractor an opportunity to.make corrections the owner waive the.right to correct the work using for.because they've breached the working so.what happens is after substantial.completion now it's not the architect of.the architect on the project site the.owners see something wrong and they're.going to call the contractor to say the.pump the air conditioners aren't working.air conditioners are working send.somebody out fix it and the contractor.system so you fix it and there's no cost.to the owner but if the owner let the.goal and go and there's a problem that.it keeps grinding on itself and grinding.so they don't call the contractor in.time and that gets worse and worse and.then you finally call you up it like an.11 month 11 or maybe it's even months to.keep that to the working but their.Gators are not working.hasn't been working for you know six.months what the contracts come down in.it then it's defective and it's gone.worse the contractor the thing will you.breached your warranty owner you didn't.let me know whenever if it's been.grinding on itself if you call me six.month ago I could have fixed it but now.it's damaged beyond repair so you've.breached the warranty so there's some.rules that the owner now after.substantial completion and the workpiece.ticket the owner has certain obligations.before substantial completion no matter.when it's defective obscene contract has.to fix it after substantial completion.the owner has can be on top of the gain.a little bit still get the fix for.please at least for a year but they have.to make sure they give everybody the.country to the opportunity to do its job.question.good question so the question is what if.your air conditioning is defective Bart.or contractor instead of the air PC.manufacturer or the air consumer.installer depends on how the closeout of.the project plan so some projects you.ask for and you get all the warranties.in your name and they're transferred to.you and therefore you can have that.direct discussion or relationship with.the country with the subcontractor the.trade or whoever did the installation.and that's normally the best situation.but not always sometimes the ability to.get that individual entity to respond.may be difficult and you don't have.while you may have the warranty.documentation you use it before we had.the agreement the ability level and.sometimes the contractor has a better.leverage point I did many years ago I.worked on a project where actually with.the purchase of a project to River there.was a trump building that my client.purchased and they purchased it as is.but there was tons of stuff that was.done wrong with the project and so and.we were now inspected everything we.tried to get you a bunch of the trades.come back because it was hazards when we.had a bunch of warranties in hand the.trades wouldn't come out now what we.learned and this was going back this is.probably 1518 years ago what I learned.out there was had Trump because of his.his command of the real estate market it.may of had Trump still owned the.building whether the work you've.actually inspired that Booker came back.they often came back to Turkey Madrid.will work and I don't know when it is.which one of his bankruptcies before.after this was but but everything.happens with many contractors is the.contractor has the relationship so you.would go to them because it's better to.go to them and or another situation B is.let's say but they have a 5-year.warranty on that air conditioner instead.of one year and the air conditioner.failed in your three and it turns out.the Installer the person the sed that.installed it not the manufacturer but.things start the installation defect as.opposed to the manufacturing maybe.they're out of business so if you still.have your warranty with your contractor.you call a contractor and you don't care.who they bring out to fix the.installation the contractor still on the.hook so it all depends on how the.warranties are written.how you kind of cut the deal at the end.but sometimes you would go directly to.an international yeah I would call the.contractor right away now is that what.you would the contractor would come back.and say hey your contract requires that.the warranty be written in your name and.so as soon as it turned it over my work.the obligations gone because carrier had.a warrant here written in your name it's.writing name on and I would say fine but.your contract still says you have a.warranty proving so you would it's a.push pull yeah let's eat the paper than.my name that's right but it didn't take.your name off this contract so that's.how you would argue that yes yeah I.think we could think about it if it's.well it's not you as the owner paid for.the warranty and built into every.construction bid if the contractors.costs for insurance first warranties for.you know all the good stuff it's built.into a sprite and that's an its overhead.and profit and you won't ever see it.broken out that way but if you paid for.a five-year warranty and the contractor.hire the subcontractor that went out of.business why should you be the one on.the risk for that they hired and maybe.the contractor should be under it for.that either but but somebody has to and.you paid for it the contractor maybe.they feel that they've entered into a.contract for the crappy clown who knows.so yes you have this piece of paper but.it's now effectively worthless so you go.back to the contractor you try to do.that and there's going to be arguments.of why you don't get that recovery.depends with the language of the.agreement said so.ah the way you put 12 to 2 to the 1 your.portion for the question work shall be.extended with respective portions the.work first to form after substantial.completion by the period of time between.substantial completion and the actual.completion for that portion of the work.so remember substantial completion is.the trigger date for when all the.worthies tick in but let's say.substantial completion happens in.February and you don't turn that air.conditioner on until July should you.lose six months of that working or let's.say that substantial completion finish.in February but the landscaping couldn't.happen in hell May and the swing set for.the kids part couldn't happen until June.that work happened occurred after.substantial completion so the worthy for.that work host substantial completion.and that one year or whatever it is.starts when that work is completed it.creates its own little trigger day.because of 9x12 too too soon so skipping.on smoking for the contractor shall bear.the cost of correcting destroyed or.damaged construction of the owners or.separate contractors whether completed a.partial completed card by the.contractors correction or removal work.that is not in accordance with the.contract document so sometimes the.contractor comes in and this will happen.actually I've had lots of discussions.and contract negotiations let's say that.the contractor is building a factory and.part of the factory has specialty.equipment that needs to be installed.that the contractor in its suppliers put.into the factory.odor doesn't have anybody separate for.that piece of work owner brings a.separate contractor in for the paper.manufacturing plant and the owner brings.in a separate piece of a separate.contractor to make equipment the.packages so you got the equipment like.for what for example our choice.contractor does the factory creates the.production line we make the toys owner.brings a specialty separate contractor.that packages that boxes are okay the.toy line is surrounded by the packaging.line and the only way to get to the fix.the toy line is to remove portions of.the packaging equipment if they.physically move the packaging equipment.out of the way contractor didn't perform.any their work because the only way to.do its warranty work on its own.manufacturing equipment is to get inside.the guns what this says is if there are.problems that the contactor causes to be.packaging equipment the extra stuff.contractors what would its performing.its working work the contractor pays for.that in order to get to its equipment.engine they have to remove or distort.damaged things if that happened.contractors on the hook for that this.doesn't happen a lot in manufacturing.because of those pencil facilities where.equipments on top of equipment and you.have to get your own stuff so this is an.important provision for that.12 to 5 nothing contain is called -.should be construed to establish a.period of limitations with respect the.obligations blah blah blah establishment.of the 1-year period for correction as.described in 12 to 2 relates only to the.specific obligation of the contractor to.correct for and has no relationship to.the time within the obligation to comply.with the contract documents so what this.basically says is we have a warning.one-year two-year five-year and if your.work is defective during those periods.of time we're going to come in and fix.it under a warranty if I got a one-year.warranty but the statute of limitations.in the state of Illinois is four years.just because I had a one-year warranty.doesn't mean I'm not on the hook for.defective work for four years I still.have to be on the book a warranty does.not supersede or change your traditional.statute of limitation okay so what.happens is if how does this play out.owner has a defective air conditioner.called the contractor in month six my.air conditioner is not working because.it's warranty the owner doesn't have to.prove anything why it's not working or.not the contractor under the warranty.has come in to fix it and repair the.placement that's a month things so one.year awards you know one year expires in.year two the odinsword my air.conditioners not working first time they.didn't make the six month one they just.call them for two years my air.conditioners are working.hunters like wells are working give you.a contract you're supposed to provide.you an air conditioner it works well now.what happens is I still can make a claim.against the contractor but I have to.prove that the reason why it's not.working is because of defective.construction.so warranty or has no bird approached.after warranty's expired but within.official rotations now you have to prove.the reason why perspective is the.contractors fault and then they have to.pay for so that's the reason why it's.important that this issue they hear that.there is a distinction between warranty.and just a regular claims article 13.anything more warranties and an.uncovered conditions are for thirteen.methylate provisions yes question yeah.oh good question so the question is is.so if there's a defect during.construction or even after the owner.nori would look to the architect to find.out if there's a defect but now we're.after construction now or a year or two.years or whatever then the owner have to.talk to the architects about that defect.that's like the initial decision maker.and everything else are they one that's.supposed to come in vendor your.questions.so again the question is whatever those.are people when is it that the owner.communication sure who the contractor.when is it the architect so think of it.this way during construction that the.architect is going to walk the sites.because that's their job of runs in.their contract and they're kind of your.watchdog that doesn't mean that the.owner doesn't happen doesn't have to.walk the site to the or doesn't is it.fish preclusion wasn't like the orbiter.won't decide if they are see something.wrong the owner can identify that in the.new 2017 they communicate directly with.the contractor previously they had to go.through the architect in the old Marines.within the 2017 they can communicate.director of contractor if they do if the.owner does communicate directly the.contractor they need they loop the.architect in under under the discussion.the same things post construction but.this post construction more likely than.not it's the owner that's going to see.it because they're living in the.building and occupying and the architect.is only going to be brought in if the.owner says well is this right or wrong.in either instance does be is the owner.precluded from communicating it's the.satisfaction or the identification of a.defect directly to the contrary if it's.during construction you must loop the.sub the architect in if it's post.construction you could talk to her to.the contractor but if if they you think.it's construction defect it's always a.good idea to bring the architect in to.support because they were the ones.watching the project site I have a case.right now where the owner there's both.construction and design.defects but even in that instance for.the construction defects normally I.would bring the architect in and say.what do you think was this wrong and.everything else but here we believe that.the architect did such a poor job and.it's observation during the construction.administration that not only the.contractor do it poorly but the.architects didn't catch it and should.have there was solo Colombians.so in Linnton since we're not talking to.the contractor or the architect I got a.new architect I got a new contractor we.get anything fixed and then we went to.them so but but that's not all in this.situation so there's no reason why a.contract by the architect I'm sorry.there's no reason saying that the owner.can't talk to the contractor and there's.no reason that says the owner can talk.to the architect in fact you want to.communicate as much as you can it just.depends on how the notice is that that's.before construction you go directly.owner contractor.you must loop the architect after if.there's no loops so ok ok 13:1 just says.part of them selected whether it's going.to be arbitration or some binding.dispute resolution 32 talk about the.cutters are assigned to rovers after the.project's 13-3 talked about those going.to be financing or lending for the.project we're worried about their 13 3 2.on the rights and remedies this is a.good look as an important one just kind.of generally think about no actions or.failure to act by the only the.architects the contractor shall.constitute a rave or a waiver of a right.or Duty afforded under the contract so.the kind of is going to your issues if I.don't bring something up if I fail to.raise it as an owner like Delta race is.an architect together and failed to.raise it so to me I believe that ability.to make that claim so if I see if the.architect if I'm walk in a project site.and I see a defect but I don't raise it.but it's still defective I can still.bring it up later.should I have brought it up is there.some burden on me to carry some of it.certainly the architect would need to.but the owner may only not so it's not a.waiver by failure to bring something.34 just talked about various test.inspections that happened in how the how.that process works under 13 42 there.could be reasons for having additional.testing that is both the owner the.architecture may be public authority.requires and those positive additional.it's more than what's traditional.standard the owner needs pick that up.the testing requirements if they're.going to happen under 14 13 4 3 happens.in accordance for the contract documents.and if those need to be done that.there's a failure of some of the work so.if there's a problem and you need to.check because of failure then it's the.contractor suspense so the revealed.failure in the contractors to pay for.those tests talks about observations.allow them who gets to be able to see.the task the owner and the architects.payments and then moving on to article.14 termination or suspension so real.quickly here the owner maturity the.contract if it stops for Paris or the.contractor confirming a if the project.would stop for more than 30 days by no.fault of the contractor so that's one.reason to terminate the project I strike.this always I say a contractor can.terminate for only one reason only.failure to be paid other than that the.contractor has to sit there they can if.there's a suspension of the project or.there's a delay they can charge you for.their cost incurred during the delay.that goes something that you hate to.have a contractor walk out at the.project to stop for 30 days the owners.then completely screwed so I always.strike that and I don't get much.pushback from contractors on this and.then.so here the payments various payment is.well as the back of government or the.architect doesn't give you a strict rate.of payment or there's some kind of court.order even if they'll cap in the.contractor could still recover either of.their suspension costs contractor may.terminate if there's been discussion.delays interruptions for more than an.800 120 days and 365 days period sort of.have to be thirty straight days it could.be a bunch of days over a year period.that they can terminate for that if.under fourteen one one or fourteen one.should v the contractor can give seven.days notice and that gives the owner a.chance to kind of fix and recover with.that and the contractor can Gaddis cost.including regional overhead and profit.for work not expects executed this is a.different color if the contractor says.I'm terminating this project and I.haven't let's say that it's a full.million dollar project of their only two.million in if they can get overhead and.crop it on work not executed they're.going to get their fee on two million.dollars or the work they never did so.this is something that's almost always a.stricken this lost profit claim and.contractors generally won't push back on.that if they lose them for work that.perform profit per workday before they.need to be paid but if they didn't.perform the work they shouldn't get the.most profit that's a windfall.so if the work is stopped for a period.of 60 consecutive days to the rectified.a subcontractor the contractor may upon.its seven additional days terminate the.contractor and recover for owner that's.provided in 14 1 3 so there's another.reason for termination and then the.owner under 14 to the owner confirm.innate for clause and they terminate for.these four reasons if they fail to.supply enough skilled workers or.materials so that was your question way.back when what's considered radical or.sufficient materials or people.they hope to make payment if they don't.pay their subs that's a breach they can.determining if they disregard the laws.that the breach can be terminated and.then then this big giant catch off.otherwise is guilty of substantial.breach of a portion of the contract.document so anything else if it's.substantially breaching that the owner.can terminate her clause and if they.have they're going to go in the owner of.good will have this initial decision.maker which is going to be architect.they're going to come and take a look at.that to do that to make sure that the.termination was proper I had a big.lawsuit on this one provision itself.basically what happens under 14 to 2 is.the owners like I think one of those.four items in 1421 have occurred whether.they didn't have enough workers or there.was a court that was um they had pay.their sub in this instance they didn't.have enough workers and couldn't get the.work done timely and the owner brought.in an engineer to certify under 14 to.242 to requires them to certify they.brought in an engineer to certify and.the engineer didn't do its due diligence.it didn't investigate all the items that.were necessary to say that the.termination was proper and so the owner.terminated for cause we were able to.prove that they didn't do their work to.show that we actually couldn't have.finished the project and we ended up.winning the lawsuit there's about a two.million dollar benefit to my client.because of our loss claims and we had as.a result of their so this is important.but what happens is definitely do the.inspection they have to give seven days.written notice to terminate the employee.of the contractor and then they can keep.a contractor off site they can take some.contract terms of their own they can.bring the electrical or the mechanical.whatever subcontracts underneath them.and then the owner can finish the work.on them so that's what happens there 42.4 42 4 is how you do the calculation of.costs so basically what happens there.if there's a termination for cause and.we have the four million dollar project.the owner comes in and it's 2 million.dollars into it this is based on your.expectation damages calculation the.owner club then terminates the.contractor brings a new contractor in.and it costs 3 million that finishes but.it was only going to be 2 million that.they've paid the other contractor the.owner of that case is entitled to what.it's been titled to a million dollars.damages from the contractor because.those 4 billion dollar project had paid.the contract first contractor to had to.pay 3 more that's five so the owner paid.an extra million that's a recovery that.the owner can get under 424 for the.additional farms on the other hand if.four million dollar project determinate.contractor one after two million it only.costs 1.7 to finish the $300,000 that's.gonna be paid to the contractor because.the contractor should have been able to.finish it on time of the budget so if.the clause is not proper so that's what.happens under courtships you just talks.about how the payment is allocated we.did that or damages so that was in the.first part of semester yes yes though.the contract is never going to get it.back for Bishop so especially in times.for the oricon subscribe the contract.the same way without clause contract in.writing to suspend so they can suspend.whatever they want.so it's suspension is were no reason.whatever reason if that is though if.there's a suspension at the owners win.the contract time under 14 3 2 and some.need to be increased cloud line.suspension so if you're telling the.contractor stop and then they happen are.financing or whatever they happen the.owner of the hook for those farmers.they don't have to pay under someone if.the suspension was because the.contractor is responsible they don't.have to pay if there's an equitable.adjustment was being tonight under.another provision if there's another.reason why the suspension happened you.don't have to give an equitable.adjustment and then last I think.termination for convenience again so.contractor can terminate for clause.contractor never can terminate for.convenience.even though I say they only can.terminate for milk payment there's some.other ones in this one terminate the.owner can suspend or terminate for.convenience wherever they want they give.you stay I don't like you anymore.now most orders won't do that because.it's very cost prohibitive to terminate.a contractor but here they can do it at.any time terminate for convenience and.without plus whatever they want they.have to give reasonable notice and the.contractor has a ceased operations under.for two to one they have to take actions.necessary to direct the protection of.preservation of the work and they need.to terminate all existing sub contracts.and enter into no further sub contracts.now the one difference here really.quickly is that under termination for.COD the owner can take assignment of the.subcontractors they can face I like your.electrician I like your plumber like.your carpenter when I'm terminating your.car I want to keep them if I'm.terminating for convenience the owner.does not have that right the time very.effective day you get nobody go find.your own people go find your own choice.your own sandbox you figure out how to.finish this project if you're.discriminating me because you don't like.me or because for whatever reason I.don't want to give you any of the.benefit of my hard work including.negotiating like those so that's one big.difference between cogs and convenience.of how it impacts the owner.and then the clock what happens there is.the maturity for convenience the order.has no damages because the owner just.said I don't want you anymore.so the damages in that instances the.contractors and for the contractor it's.work for the poor they've already.performed costs for what they have to.turn a you know if they have to get rid.of their own stuff they got to pay them.and then potentially the termination fee.or profit so the contractor when its.formation opinion that's why you don't.want to do it it's very expensive for an.owner to terminate a contractor for.convenience happen but very rarely and.whatever to do is I'm not going to go.into claims in disputes today so what.I'm going to do is we have our lap.session for the leg issues are here.right and our very last session is kind.of a why open review so I'm going to go.over a part of the 15 there instead of.keep me when I can keep you guys for.another 15 minutes but I don't want to.do it unless you want to stick around so.if you guys because we have time to the.last session last session was going to.be just a little review of the claim and.I can just go over that if you want to.do that okay we'll do that.yeah or maybe even the next one I think.the next one's pretty quickly but I just.will just stop here and we'll finish.this up because I think it is important.to understand how claims and disputes.happen in this and obviously I took a.little bit longer I apologize normally.get this done but I don't want it.started in Austin right okay.you.

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