The Georgia construction law firm of the Cobb Law Group is pleased to provide you with our final installment on some of the issues to consider before entering into a joint venture contract with another participant. If you are interest in our previous entries, please click on the links below to learn more:
Advantages / Disadvantages of Contractors Using Joint Venture Agreements (Part I)
Important Operational Issues of Joint Ventures (Part II)
Joint Venture Internal Management (Part III)
Risk Allocation in a Joint Venture (Part IV)
As we discussed in Part I of this series, there are some distinct advantages to utilizing a joint venture arrangement in the construction industry; among other things, it allows competitors and colleagues to bring together their assets in their quest to appeal to larger construction projects (ones in which they might not be able to handle by themselves). This allocation of resources can bring better and more lucrative work to your firm, and this method of joint venturing can be used at virtually any level of the construction industry–general contractors, specialty subcontractors and suppliers may all utilize the unique features of this type of business arrangement.
If a joint venturer has partnered with another quality firm, if the parties have negotiated and executed a mutually beneficial joint venture contract, if there are no unforeseen Acts of God, supply shortages or intervening issues, then the joint venture will be a success! However, the possibility always remains that a problem will occur between the parties to the joint venture arrangement. It is vital that your contract affirmatively address what happens with a default of your agreement occurs and offers solutions to manage the problem to prevent a breach of the construction contract with the builder, developer or owner.
Step One–Define an Event of Default: The joint venture agreement should enumerate what constitutes an “Event of Default” of the contract (actually, this statement is applicable to virtually all types of contracts in any area of law). Some potential defaults are easy to identify such as a material breach of the contract or the insolvency (or bankruptcy) of one of the parties to the joint venture agreement; other issues to consider regarding defaults may be less obvious and include the misuse or misappropriation of shared trade secrets or failures of management such as attrition, competency, or availability. You contract should be specific. Remember, two parties may typically operate as competitors have joined forces to work together and management styles and personalities could become an issue.
Step Two: Cure & Remedies for Default:It is essential that every joint venture agreement addresses the series of events which happen after a default of the agreement has been identified. Most contracts (not just joint venture agreements) require some sort of notice of the default as well as an opportunity to “cure” the default within a set time period. For example, if a party fails to provide adequate labor to complete the project, then written notice may be required to be given via electronic means or overnight delivery and if the construction labor issue isn’t satisfactorily resolved within 3 business days, then the breaching party will be solely responsible for fines incurred due to the delay in construction. Although this “default and cure” period is standard in most types of contracts, joint venture agreements may include the following unique remedies for default:
- The defaulting joint participant shall lose its vote or voice in decision making/management of the joint venture;
- The defaulting joint venturer might forfeit its interest in the assets it brought to the joint venture (at least until the joint venture’s contract with the project owner is completed);
- Similarly, the defaulting party may lose it rights to any shared profits resulting from the joint venture; and
- The non-defaulting joint venturer may have an option to terminate the joint venture agreement (and dissolve the JV entirely).
Although default provisions often appear harsh, they are intended to provide an offending party with an understanding of the consequences of its breach of the agreement; similarly, it offers the non-breaching party the ability to be made whole despite the default and complete the JV’s obligations to others.
Joint venture agreements are commonly used on Georgia construction projects; however, project in shich jiont ventures are utilized typically involve potentially larger profits and, correspondingly, larger damages for defaults. Thus, if you are considering participating in a joint venture arranges, you should consult with a Georgia construction attorney who has experience in drafting and enforcing joint venture agreements. If you have questions, please feel free to email us or call us toll-free at 1-866-960-9539 today!
If you have had any experiences with joint venture contracting, please tell us about them by leaving a comment below.
by Mark Cobb
We are excited to report that earlier this week, Georgia’s Governor Nathan Deal signed HB 434 into law thereby amending our state’s lien statute to allow lien claimants to include the amount due and owing the lien claimant under the terms of an express or implied contract, subcontract, or purchase order as well as interest on the past due balance. We’ve written more extensively about the 2013 amendment to Georgia’s lien laws, but we wanted to follow-up with our readers and let you know that the bill is now law. Thank you Gov. Deal.
If you have any questions regarding the changes to our state’s lien laws or if you have any other questions regarding construction liens, payment bonds, Miller Act claims or construction contracting in Georgia, please contact the lawyers at the Cobb Law Group by email or call us at (866) 960-9539 today!
The Georgia construction attorneys at the Cobb Law Group are please to participate in “Golfin’ For The Lodge” an annual fund-raiser benefitting the Bald Ridge Lodge. The Lodge is a non-profit Stabilization and Assessment Center for boys located in Forsyth County, Georgia which serves boys ages 12-17 who are in the custody of the Department of Family and Children Services or referred to the Lodge by the local Juvenile Court.
This year’s golf tournament will be held on Tuesday, May 28, 2013 at the Polo Golf and Country Club and includes a full slate of fun including an 18-hole tournament, putting contest, a silent auction, numerous raffles, player gift bags, Chick-fil-a lunch and a reception catered by Jim ‘N Nick’s Bark-B-Q. Special guests will include NASARS’s David Ragan, WSB’s Captain Herb Emory, and Kris Benson, a retired MLP Pitcher. For a hole-in-one, there’s a new car!
The Cobb Law Group is a law firm focusing on the needs of material suppliers, subcontractors and general contractors on projects throughout the State of Georgia. We focus on construction contract drafting, filing materialmen’s liens in Georgia and making payment bond and Miller Act bond claims anywhere in the state. If you need assistance filing liens, filing a payment bond claim, or collecting your past due construction accounts, please contact us today no matter where you project is located in Georgia!
Did you hear?!
Last week, Georgia Governor Nathan Deal signed a proclamation naming May Georgia’s International Building Safety Month. This is a national campaign to help individuals and businesses understand what it takes to create and sustain safe and sustainable structures. The campaign reinforces the need for adoption of modern, model building codes, a strong and efficient system of code enforcement and a well-trained, professional workforce to build and maintain the system. The materialmen lien law and construction bond lawyers at the Cobb Law Group salute Georgia’s International Building Safety Month!
by Mark Cobb
Every four years, the American Society of Civil Engineers (ASCE) produces a report evaluating the state of America’s infrastructure and grades them on a scale of A+ (great) to F- (lousy), and they recently released their 2013 report card. Their report card covers 16 infrastructure categories and provides information on all 50 states in each of the 16 areas including bridges, drinking water, roads and schools. Sadly, the cumulative national grade (or C.P.A.) was a D+. Although this is abysmal, Georgia’s individual score was slightly higher coming in with a C-.
I don’t know about you, but my parents would not have been happy if I had come home with these grades!
Here’s a breakdown of the 16 categories showing the national performance and Georgia’s performance:
In addition to providing the overview of the infrastructure, the ASCE also pinpoints specific facts which led to the scores. Here are some of the key facts relating to Georgia’s Infrastructure and our future construction possibilities:
- Dams: Georgia’s dam safety program has 7.5 full-time employees that each oversee over 4,000 state regulated dams, 484 of which are considered his hazard dams;
- Drinking Water: Georgia has reported that it has $8.9 billion in drinking water infrastructure improvements needed in the next 20 years;
- Hazardous Waste: Georgia has 15 sites on the National Priorities List;
- Wastewater: Georgia has reported that is needs $89 million in wastewater Infrastructure improvements;
- Bridges: Six percent (6 %) or 878 bridges in Georgia are considered structurally deficient; another 12.7 % or 1,871 bridges in Georgia are considered functionally obsolete;
- Roads: Nineteen percent (19 %) of Georgia’s roads are in poor or mediocre condition; in addition, driving on roads in need of repair costs Georgia motorists $374 million a year in extra vehicle repairs and operating costs which amounts up to $60 per motorist;
- Parks and Recreation: Georgia has an unmet need of $123 million for its parks system; and
- Schools: It is estimated that Georgia schools have $5.2 billion in infrastructure funding needs.
IS THERE ANY GOOD NEWS?! If there is a silver lining to this report, it is the fact that our future depends upon financing and completely a lot of infrastructure improvements in Georgia which means, of course, there should be quite a bit of work for Georgia’s contractors and specialty contractors (and the suppliers to those jobs too!) To see the full report and many more details, please click here; to read more details related to Georgia’s state report card, please click here.
Don’t forget to leave your comments about the state of our infrastructure below:
by Mark A. Cobb
The Georgia Mechanics and Materialmen’s Lien Law Statutes (O.C.G.A. Section 44-14-360 et seq.) govern all aspects of filing construction liens in Georgia, and our construction lawyers have filed hundreds or thousands of liens on behalf of contractors, specialty subcontractors and material suppliers in virtually every county in Georgia!
Disclaimer: This blog post and its links (just like all of our blog posts) try to offer SOME of information regarding some of the most common questions which we get. Unfortunately, we cannot offer legal advice through a blog article, and you should not file a lien in Georgia based upon the information provided through our blog and website. Thus, we strongly encourage any potential lien claimant to seek competent legal advice from an experienced Georgia lien attorney in order protect your rights–we can provide you some useful guidelines in our blog articles, but we cannot cover all of the exceptions, loopholes, alternate solutions and pitfalls of filing construction liens in Georgia. When it comes to Georgia’s lien requirements and surety bond claims, there is simply no substitute for experience and Mark Cobb has over 20 years for experience! To learn more about Mark Cobb, please click here > >
Strict Compliance with every aspect of Georgia’s Lien Laws: Because materialmen’s liens essentially make a third party (such as the property owner) responsible for making sure that you get paid, Georgia courts have consistently required that lien claimants strictly comply with every aspect of the lien laws. To better understand Georgia’s strict compliance requirements, please click here > >
Preliminary Requirements for Filing a Lien in Georgia: Those in privity of contract with either the owner or the general contractor do not have any preliminary notice requirements in Georgia; however, if you are a third tier sub-subcontractor or material supplier then you probably need to send a Notice to Owner and a Notice to Contractor (sometimes called Notice of Furnishing, NTO, or NTC) within the first 30 days you began working on the project. To learn more about NTOs, please click here > >
Deadline for Filing a Lien in Georgia: All types of construction liens must be filed within 90 days of the last day in which they were physically on the job site (NOT invoice date!); if you signed a lien waiver, then your deadline to file a lien may be shortened to the 60th day from the date of the lien waiver. To read more about this, please click here > >
Georgia Lien Form: Although there is no magic bullet form for filing liens in Georgia, our legislature has mandated certain requirements which must be contained in the lien including some specific language and some particular font sizes. To see a copy of the Official Code of Georgia Section 44-14-361.1 with specific language requirements for liens, please click here > >
Costs & Jurisdiction for Filing a Lien in Georgia: Lien Claimants must file their Georgia liens in the county where the construction project was located. Liens are filed with the Clerk of the Superior Court and the filing fees are, currently, $5.00 for the first page and $2.00 for each additional page. To see a list of addresses, telephone numbers and websites for the clerk of court of each Georgia county, please click here > >
Statutory Notice of Filing of Lien: No later than 2 days after a claim of lien is filed with the clerk of court, lien claimant must send each owner of the real estate which you liened a copy of your lien.
Perfecting Your Lien: Unless the owner of the real estate where the lien is place files a proper Notice of Contest of Lien, a Georgia materialman’s lien will expire one year from date of the filing of the lien unless a law suit is filed against the entity with whom you contacted (if you are a subcontractor, this would likely be the general contractor; if you are a material supplier, then it might be either a subcontractor or the prime contractor. To read more about this, please click here > >
Georgia Notice of Filing of Action: Within 30 days of filing a law suit to perfect a construction lien, the lien claimant must also file a Notice of Filing of Action with the clerk of court in the county where the lien was filed. To read more about Notices of Filing of Action, please click here > >
Georgia Foreclosure of Lien Action: Sometimes, it is possible to combine the foreclosure of the lien action with the lawsuit a lien claimant filed within one year of the filing of the lien; however, jurisdictional or strategic differences may prevent this; if so, then after the “first” lawsuit is filed, and if the lien claimant prevails in that lawsuit, then Georgia’s lien laws require a second lawsuit to begin the foreclosure process (against the owner of the real estate). To read more about this process, please click here > >
Only Georgia Lawyers Can File Materialmen’s Liens in Georgia: As you can see from this very basic overview, filing a proper materialmen’s lien in Georgia is very technical and–from the first day you worked until the end of the lien foreclosure action–Georgia Claims of Liens must be in strict compliance with ALL of the requirements. Furthermore, its importanta for a potential lien claimants to understand that lien filing services are prohibited from filing construction liens in Georgia–only lawyers admitted to practice in Georgia are allowed to file materialmen’s liens in the lien records.
We hope that this overview on how to file a supplier lien or subcontractor lien on a Georgia job site has helped to provide you with useful and basic information regarding the lien process in Georgia. If you have worked on a Georgia construction project and you have not received payment, please contact an experienced Georgia construction attorney today. The lien and bond lawyers at the Cobb Law Group and help you, please telephone us at 1-866-960-9539 or email us today. We can help you prepare and file your lien anywhere in the State of Georgia!
Wow, it must be awards and recognition week here! In case you missed our earlier posts, last Monday, our Georgia Materialmen’s Lien and Payment Bond Claim Blog was ranked third in a national competition; then, on last Thursday, the Cabinet Maker’s Association reprinted our blog article on Protecting Your Revenues. Now, we just received a copy of book in the mail in which Mark Cobb was interviewed. What an amazing week!!
A couple of years ago, Georgia construction lawyer Mark Cobb was contacted via the Washington and Lee University School of Law Alumni Association as a prospective case study on practicing law in a small town. Mark had been selected because in 2009, he opened a second law office (in Thomasville, Georgia). Although the Cobb Law Group’s Atlanta office remained open, Mark decided that his statewide practice of construction law would benefit from opening an additional office in south Georgia. Thus, his clients would have better coverage of the state’s courts and courthouses, increased contacts and a deeper knowledge of Georgia construction economics. Consequently, after doing some research, Mark and his family chose to move out of the big city and into a smaller community. About the same time, Bruce M. Cameron was beginning research on his new book: Becoming a Rural Lawyer: A Personal Guide to Establishing a Small Town Practice (The New Lawyer’s Survival Guide) (Volume 3) published by Decision Books in its series on The New Lawyer’s Survival Guide. This books hopes to encourage lawyers looking for the big-city alternative to find new levels of satisfaction and meaning.
Mr. Cameron undertook a great deal of research looking at the various types of small town practices available. He writes the books for lawyers of all ages and all practice areas and includes such topics as
- Planning to Relocate
- The 8 Myths of Practicing small town law
- Discovering the 5 “Hot” Areas of Rural Practice
- Finding the Under-Exploited Niches in the Legal Job Market
- Your New Law Practice
Mark is a representative of the small town, niche-lawyer as he practices primarily in the area of Georgia Materialmen Liens, Payment Bond Claims and Construction Contract Law. Thus, when he moved from Atlanta, he was faced with the problem of how to grow his firm’s practice without being in a large metropolitan area. Fortunately, for Mark, his niche practice allows him (i) to handle construction lien and miller act bond claims anywhere in the state of Georgia and (ii) many of his clients are large, national manufacturers and distributors of construction materials and equipment, thus, they often do not have management offices in Georgia and find their local construction counsel via the Internet. Consequently, the Cobb Law Group is constantly receiving inquiries from new and existing clients regarding filing and enforcing liens and payment bond claims.
Mark is honored to have been quoted in Mr. Cameron’s new book. A couple of the quotations Mr. Cameron chose to use from Mark include the following:
In discussing whether or not a recent law school graduate can open a small town practice, Mr. Cobb replied, “Perhaps with family or very close friends in the area it might be possible. [Opening a rural practice straight from law school] takes someone willing to throw themselves into the community: church, nonprofits, local boards, etc. Also, when I first looked into moving into the town in which I now live, a resident lawyer advised me not to move here until I was married. There are few marriage prospects [he said], and single life is boring! [At the time] that infuriated me, but now that I am married and living here, I understand the wisdom of [his] statement.”
Mr. Cameron also quotes Mark regarding maintaining a sophisticated practice area such as lien and payment bond law. Mark was quoted to say, “It’s a misconception that [small town lawyers] cannot handle substantial, complex matters. After making partner [in Atlanta], I decided to leave, and I’m as good a lawyer now as I would be [had I remained] in a big city.”
In discussing whether or not small town lawyers can have a legal specialty, Mark was quoted as follows: “Yes, I have a statewide practice in construction law which means that I do a lot of document review, materialman lien filing, payment bond claims, and commercial collections so I am not dependant on local clients. I also represent several national companies with all their legal needs in Georgia.”
Mr. Cameron was kind enough to quote Mark on several other occasions. To read these and the other sections of this book, you’ll have to get your own copy of the book (to order a copy today, click below!
Thank you Mr. Cameron for encouraging lawyers to look at all the various aspects of maintaining a small town practice. Personally, I agree that such a legal practice is very fulfilling and offers a much greater quality of life than the alternatives.
by Mark Cobb
It’s becoming something of a tradition around here to offer a humourous video on Fridays. So, here we go……..
Hiring a law firm requires a great deal of trust, and that trust must be reciprocated between the client and the lawyers. At the Cobb Law Group, our construction lawyers work every day to earn our clients’ trust. Even when a client falls forward instead of backward, we can be relied upon to help!
That is the nature of the type of practice we maintain representing contractors, subcontractors and suppliers: we harp on getting all your ducks in a row from the beginning by using good construction contract drafting skills, utilizing a comprehensive account application to learn about credit worthiness, making sure that your internal procedures match the competency of your construction skills or quality of materials, and sending timely Notices to Contractors (NTCs) and Notices to Owners (NTOs).
But, for those that don’t heed this sage advice, we can still help pick-up the pieces. You may still have the right to file a Georgia Mechanics and Materialmen’s lien claim or make a claim against a payment bond. In addition, there may be an opportunity to seize retainage funds or make a claim for constructive trust on the amount owed to the prime contractor (or the subcontractor), and you may have a claim in quantum meruit.
Unbelievably, some clients fail to respond to this advice as well. But we can still help pick up the pieces! Even though their remedies are more limited, it is still possible to file a lawsuit for breach of contract as well as other causes of action. In addition, Georgia’s Prompt Payment Act can also help you collect interest and attorneys fees.
So, even if our advice is “fall back and we’ll catch you”, we can still help if you choose to fall forward instead! If you need information on Georgia subcontractor laws, Georgia lien laws, payment claims or just about anything else related to construction law, please contact us today!
Did you hear? Mark Cobb‘s recent blog article Protect Your Revenues was recently picked-up by the Cabinet Makers Association and published in their April 2013 E-Newsletter (to read our article, please click here). Thank you to the fine people at the Cabinet Makers Association for helping us get the word out about supplier and subcontractor lien rights!
The Cobb Law Group‘s principal Mark Cobb is a Georgia construction lawyer who focuses his practice on specialty subcontractor and material supplier rights including Mechanics and Materialmen’s Lien Claims, payment bond claims, contract drafting-reviewing-interpretation, licensing, business development and expansion and other areas helpful to Georgia’s construction industry professionals. He is currently co-authoring a book on subcontractor and supplier rights to be published by the American Bar Association in 2014 (for more information, click here). You may contact Mark by leaving a comment below, calling him at at 1-866-960-9539 or sending him an email here.
Thank you, thank you, thank you to all our friends and fans!
The lawyers and staff of the Cobb Law Group are pleased to announce that our Georgia Construction, Lien and Bond Blog was recently awarded third place in Construction Marketing Idea’s 2013 Best Construction Blog.
We greatly appreciate everyone’s support and votes; this interesting competition, however, relied on a combination of popular votes and judges’ criteria. Our Georgia construction law blog received fifth place based solely upon popular votes; however, the judges evaluation bumped us into third place! Thus, we are also grateful to the three judges who evaluated the competition’s blogs as well as the great folks at Construction Marketing Ideas who organized this event.
According to the press release announcing the winners, “Georgia Construction Lien and Law blog (Cobb Law Group) is the only blog to be selected by all three judges — including one who thought the blog to be the best. This blog would have scored better with a higher popular vote” [emphasis added]. Thank you for such encouragement and support! To see the full press release, please click here.
We are honored to receive this tremendous honor. Thank you again to all our friends and fans, judges and organizers!