“By way of background, schedule float is a number used to identify the amount of time that any task (as identified on a project schedule) can be delayed without impacting other tasks or the project’s overall schedule,” the article explains. “Although it is often overlooked, schedule float is a vital, limited resource in construction projects. Property owners should closely examine any float allocation clause contained in their agreements and negotiate the inclusion of the foregoing factors.”

Liz represents private entities in complex commercial litigation and municipalities and other governmental entities in disputes throughout Florida.

Jake counsels clients in the construction industry, negotiating contracts on their behalf and representing them in complex disputes.

Read the full article here: https://www.law.com/dailybusinessreview/2023/05/09/we-all-float-down-here-a-property-owners-guide-to-navigating-schedule-float/?utm_source=rss&utm_medium=rss

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“On some of these projects, you’ll have 30 or 40 parties involved” Liz explained, adding that “anytime you have that many players, when there are disputes, it’s inevitable that you will have a large number of claims.”

Liz Coppolecchia represents private entities in complex commercial litigation and municipalities and other governmental entities in disputes, with an emphasis on construction disputes and contracting, throughout Florida.

Read the full article here: https://www.constructiondive.com/news/dotted-line-how-to-craft-contracts-avoid-disputes-reduce-legal-costs/648330/?utm_source=rss&utm_medium=rss

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Over the course of the past year, public and private entities have witnessed unprecedented increases in the cost of materials for construction. And while South Florida remains a hub for development, both private developers and municipalities face an ongoing challenge—volatile changes to market conditions affecting the price of construction. The cause of these changes is diverse and dynamic. The COVID-19 pandemic, which surged in 2020 and 2021, has left a lasting mark on the industry. While markets appear to be stabilizing, material and labor shortages run rampant, making it increasingly difficult for property developers (including municipalities) to accurately price their upcoming construction projects. To make matters worse, in 2022, military conflict in Ukraine further exacerbated the impacts of COVID-19 in the following ways: increasing the cost of fuel, which increased operation costs for construction projects; and contributing to supply chain disruptions, which increased procurement lead times.

Despite material and labor shortages, development continues. To that end, property developers are actively searching for means to mitigate the risk of ever-increasing prices resulting from such shortages. At a time when certainty is lacking, property developers should consider the following approaches to protect their interests as they negotiate new contracts for construction.

The Broad Clause

When negotiating contracts for construction, property developers should consider including in their contracts a broad provision that precludes contractors from seeking any contractual price increases or time extensions arising from certain delineated events. In essence, the contractor must warrant that in entering into this particular construction contract, it has first taken into account the potential impacts of COVID-19, other current pandemics (such as monkeypox), and the Ukraine military conflict in pricing the project and preparing the project’s schedule. Property developers should carefully craft this provision to include specific warranties by the contractors concerning labor and material shortages, inflation, recession, and other potential impacts of the delineated events. Such a provision offers the clearest approach for mitigating the risk of changing market conditions by imposing an express contractual requirement on the contractor and barring all future claims for additional time and money based on delineated events. It is worth noting, however, that a provision of this magnitude will be met with contractor disdain. Nevertheless, property developers with significant bargaining power are in the best position to push for its inclusion.

The Force Majeure Clause

In addition to the foregoing price escalation clause, property developers should consider modifying their current force majeure clauses to account for changed circumstances. Typical force majeure clauses address unforeseen circumstances that result in delays or increased cost to a project. In the past three years, property developers have been flooded by force majeure claims by contractors seeking increased payments and time extensions stemming from the impacts of COVID-19.

While this article is not aimed at addressing the validity of such disputes, it is worth noting that the impacts of COVID-19 can hardly be called unforeseen at this point in time. To that end, property developers should consider modifying their force majeure clauses to expressly exclude COVID-19 (and other current delineated events, such as monkeypox and the Ukraine military conflict) from their scope. It is possible that if litigated, a force majeure clause that remains silent on these issues may be deemed by a court as offering protection to a property developer with respect to the foregoing events. Nevertheless, an express exclusion constitutes a best practice in this instance.

Critically, a modified force majeure clause can work in tandem with the foregoing price escalation clause, but may also be used as a fallback measure where a contractor is unwilling to provide an express warranty concerning price and time for construction. At a minimum, property developers should examine their current force majeure clauses before entering into new contracts for construction.

The Compromise Clause

To the extent a property developer is unable to negotiate the foregoing protections into their construction contracts because a contractor has particular leverage, the property developer should nevertheless push for some express language addressing changes in price.

One option for consideration is a price increase/decrease clause that allows for mutual recovery. Specifically, property developers may negotiate a provision into their construction contracts that requires a contractor to notify the developer of any price increases or decreases affecting the project. This clause should apply with specificity to changes in material pricing as well as labor pricing. Where a substantiated price increase exceeds 5% of the previously quoted price of a certain material or item, the contractor may pass along such price increase to the property developer. Similarly, where a price decrease constitutes a price reduction of over 5% for an item or material, the full amount of such savings will be passed along to the property developer to reduce the overall cost of the project. In this context, a price increase or decrease is substantiated through documentation from subcontractor bids or supplier unit costs for material procurement. To demonstrate that such increases will, in fact, affect the project, property developers should require a minimum of three substantiating bids from local subcontractors.

Where contractors are unwilling to bear the entire risk of a changing market, the foregoing provision offers a structured and balanced approach to mitigating risk. The foregoing provision also provides somewhat of a gamble for property developers and contractors alike. In the event prices escalate, the contractor is protected, but in the event prices drop, the property developer gains a windfall.

All that being said, as the school of legal realism has taught us, rational breach is always an option. While property developers should certainly consider the foregoing contractual provisions to protect their interests, they should remain vigilant of their ongoing contractual relationships. If material prices continue to skyrocket, contractors will weigh their options. Where the cost of finishing a project is significantly higher (due to increased material or labor costs) than at the time a contractor entered into an agreement, the contractor may decide that breaching that agreement makes financial sense. This is especially true in a world where litigation costs are also rising, often leaving property developers more willing to negotiate price increases in lieu of filing suit against throngs of contractors.

As with all aspects of the law, the foregoing recommended clauses will evolve as the construction industry and the lawyers who service it gain further insight into the most efficient and effective practices for resolving price escalation issues. Until then, however, property developers should remain cognizant of the protections available to them.

Elizabeth Coppolecchia is a partner at Weiss Serota Helfman Cole + Bierman and represents private entities in complex commercial litigation and municipalities and other governmental entities in disputes throughout Florida.

Read the original article published in the Daily Business Review here.

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Based in the firm’s Miami office and part of the Litigation Division, Coppolecchia represents private entities in complex commercial litigation and municipalities and other governmental entities in disputes throughout Florida. Her practice focuses on the representation of clients in construction contract drafting and negotiation, as well as construction claims and defense.

Gonzalez represents private and public sector clients in litigation involving real property and local governments. Based in the firm’s Fort Lauderdale office, she advises her clients in the areas of eminent domain and inverse condemnation. Gonzalez also handles complex litigation involving acquisition and valuation of private property rights, governmental regulation of private property and business disputes.

Hsu is based in the firm’s Boca Raton office and represents startups, multinational businesses and publicly traded companies with respect to domestic and international legal issues. Hsu also advises clients on corporate governance, labor and employment, financing, acquisitions and sales.

Part of the Government Division, Natiello is based in the firm’s Fort Lauderdale office. He counsels his clients in the areas of police operational and legal concerns, forfeiture litigation, liability defense, municipal government litigation and worker’s compensation defense. He also practices in the areas of code enforcement, and civil rights and torts.

“We are pleased to recognize the hard work and achievements of these four attorneys,” said firm Managing Director Mitchell Burnstein. “Their longstanding dedication and commitment to their clients and our community will help the Firm succeed, and we look forward to their continued success.”

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Liz is passionate about the arts in our community and also serves on the Perez Art Museum Miami (PAMM) Contemporaries’ Steering Committee. She previously served as Vice President of the Bakehouse Art Complex’s Board of Directors and as a member of Locust Project’s Spring Fling Host Committee.

About the Arts & Business Council of Miami
The Arts & Business Council of Miami leads the movement to build a sustainable cultural ecosystem through advancing high-impact partnerships between business, entrepreneurs and the arts.  Click here to learn more about the Arts & Business Council of Miami.

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Super Lawyers recognizes distinguished attorneys who have undergone a rigorous screening process and who are ultimately selected for inclusion in their annual list of exceptional legal professionals. Published by Thomson Reuters, Super Lawyers is a rating service of attorneys from more than 70 practice areas and determines its rankings through independent research, peer nominations and peer evaluations. Only the top 5 percent of outstanding lawyers in Florida are rated by Super Lawyers, while no more than 2.5 percent of lawyers under 40 years old or who have practiced for fewer than 10 years are selected as Rising Stars.

Elizabeth Coppolecchia and Alicia Gonzalez were recognized as Florida Rising Stars for the first time this year.

The Firm’s recognized attorneys are listed below.

Miami

Recognized as Super Lawyers

• Mitchell Bierman
• Alan Fertel
• Edward Guedes
• Joseph Serota
• Peter Waldman

Recognized as Rising Star

• Elizabeth Coppolecchia
• Justin Luger

Fort Lauderdale

Recognized as Super Lawyers

• Mitchell Burnstein
• Jamie A. Cole
• Matthew Mandel

Recognized as Rising Star

• Alicia Gonzalez
• Anne Reilly Flanigan
• Michael Kantor

Boca Raton

Recognized as Super Lawyers

• Brett Schneider

Recognized as Rising Star

• Alen Hsu
• Anthony Soroka

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On Saturday, January 26, attorneys Dan Espino, Justin Luger, Eric Kay, and Liz Coppolecchia participated in the Greater Miami Chamber of Commerce’s “Get To Know Your Magic City” immersion tour along the Miami River.  Justin chairs the HYPE Miami Committee of the Chamber, which put on the event (now in its fourth year).  The firm has counseled several interests along the Miami River as it develops into a 21st Century destination to work, live, and play.

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Congratulations to attorney, Elizabeth Coppolecchia, for being elected Secretary of the board of directors for the Arts and Business Council (ABC).  “The Arts and Business Council of Miami strives to build a sustainable cultural ecosystem through creating partnerships between business, entrepreneurs and the arts. ABC provides meaningful engagement opportunities with the arts to inspire employees, stimulate innovation and foster creativity.”

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Our Construction Law team was proud to attend and sponsor the “Big Bad BBQ Sponsored by Danto Builders Benefiting Special Olympics Florida.”  It was a great event for a fantastic cause.  Pictured from left to right are Construction Law Group Chair Michael Kurzman, Elizabeth Coppolecchia, and Drew Demers.

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