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ARTICLE · 08 MARCH 2023

Construction & Claims: March 2023

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Welcome to Construction & Claims, a periodic digest of the headlines, statutory and regulatory changes and court cases involving construction news, claims, bid protests, contract administration and payment-related disputes.

United StatesReal Estate and Construction
Nossaman LLP
Nossaman LLP
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Welcome to Construction & Claims, a periodic digest of the headlines, statutory and regulatory changes and court cases involving construction news, claims, bid protests, contract administration and payment-related disputes. 

If there is a particular subject or jurisdiction you'd like to see covered, please let us know.


California Public Transportation Projects To Receive $2.5 Billion in New Funding

In a powerful statement of commitment to California's infrastructure, Gov. Gavin Newsom recently declared that $2.5 billion will be awarded for numerous in-progress public transportation projects throughout the state. “The projects funded represent critical transportation and will provide alternatives to driving with access to a modernized, public transit system,” said Governor Newsom. “California is unwavering in our commitment to our world-leading climate agenda, including record levels of investments in public transportation projects to electrify fleets, expand

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Governor Newsom Signs Key Housing Bills Into Law

California Governor Gavin Newsom has signed multiple state housing bills into law that will take effect January 1, 2027, introducing significant changes to housing development regulations across the state. These new laws establish streamlined ministerial approval processes for various housing types, from high-density transit hub projects in major cities to townhomes and factory-built housing, while also reforming ADU regulations, permit processing requirements, and density bonus provisions. Will these legis
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More For The Missing-Middle: SB 1116 Expands Starter Home Revitalization Act (SB 684/1123)

California's Starter Home Revitalization Act receives significant enhancements through Senate Bill 1116, expanding site eligibility criteria, limiting local zoning restrictions, and invalidating certain private deed covenants to accelerate small-lot residential subdivisions. The legislation introduces streamlined 60-day ministerial approvals while establishing new rules for lot size averaging, height restrictions, and concurrent permit processing that fundamentally reshape the pathway for starter home devel
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California Contractors Get A Much-Needed Break: SB 342 Softens The Harsh Consequences Of Contractor License Lapses

Imagine completing a multimillion-dollar project, performing quality work, paying your subcontractors, and satisfying the owner, only to discover that a temporary contractor license lapse could prevent you from recovering payment for that work or pursuing claims for extra work. For decades, that was the reality under California Business and Professions Code section 7031.
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Residential Vacancy Tax Preempted By State Law

A California Court of Appeal has invalidated San Francisco's Empty Homes Tax, ruling that the Ellis Act—which protects property owners' right to exit the rental market—also shields them from being forced to enter it through vacancy taxation. This landmark decision raises critical questions about the viability of similar residential vacancy taxes that other California municipalities have enacted or are considering as housing policy tools.
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Cox, Castle & Nicholson
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New York City Rent Freeze Faces Legal Challenge As Court Considers Landlords’ Claims

Landlords of rent stabilized buildings in New York City have filed a lawsuit challenging the rent freeze passed by the Rent Guidelines Board, questioning the Board's independence and data integrity. With operating costs rising 31% over five years while the Board voted 7-1 for a freeze affecting 1 million apartments, the case raises critical questions about the balance between tenant protection and landlord viability.
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Hogan Lovells Cadwalader
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New Florida Law Adds Licensing Risk To Contractor/Subcontractor Payment Disputes

Florida's new Section 489.1295 establishes licensing consequences for contractors who fail to timely pay subcontractors and suppliers, effective July 1, 2026. The statute creates disciplinary exposure for knowingly or willfully withholding payment, though it includes important exceptions for bona fide disputes and contractual payment terms. Contractors must now navigate potential license sanctions including fines up to $10,000, suspension, or revocation when payment disputes arise.
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Compliance Notes - Vol. 7, Issue 21

Elon Musk settles class-action lawsuits over his controversial $1 million daily giveaway during the 2024 election, while courts across multiple states grapple with fundamental questions about campaign finance authority, judicial ballot designations, and the FCC's role in regulating political advertising rates. These developments highlight ongoing tensions between election integrity, administrative authority, and constitutional protections in the American electoral system.
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California’s AI Boom Has A Real Estate Problem: Where Does All The New Power Infrastructure Go?

California's rapid expansion of data centers to support AI and other technologies has created an unexpected challenge: finding suitable locations for the massive electrical infrastructure needed to power these facilities. While the California Independent System Operator has approved new processes to accelerate connections for large electricity users, the real estate and right-of-way issues surrounding substations, transmission lines...
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Wildfire Inverse Condemnation Liability Limited By California Legislature

California's Senate Bill 1153 has been signed into law, providing significant protection for public water systems against wildfire-related inverse condemnation claims. The legislation clarifies that water suppliers have no duty to design or maintain systems for wildfire suppression and that inability to maintain water supply during wildfires is not a substantial cause of wildfire damages. This landmark legislation may reshape liability exposure and insurance costs for water providers across the state.
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Court Finds ‘Occurrence’ Language Ambiguous, Reviving Church’s Coverage Claim For Abuse Settlement

A Tenth Circuit decision examines whether a church's alleged failure to prevent multiple instances of sexual abuse by one perpetrator constitutes a single insurance "occurrence" or multiple occurrences, with significant implications for coverage limits and settlement aggregation. The court found the policy definitions ambiguous and ruled in favor of the church's interpretation that repeated exposure to dangerous conditions could constitute one occurrence.
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