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Maintain a smooth operation

By Karl Oles
Dolan Media Newswires

Portland, Ore. — Here is an early-in-the-year to-do list for contractors and project owners.

Are your corporate and business licenses up to date?

Many companies rely on someone to look after “corporate maintenance,” including the renewal of corporate and business licenses. If you want to explore business in a new state this year, consider starting the process now to get the appropriate license. If you are a partnership or joint venture, check whether your partnership agreement has a termination date that needs attention, and confirm that your partners are properly licensed.

Is your professional license up to date?

This is a good time to check on the status of your state general contractor or specialty contractor licenses. In some states, developers also need licenses, particularly if they act as general contractors by managing multiple subcontractors on their projects. This is important because in some states a contractor is barred from filing a lawsuit to get paid for work unless it can show it was licensed at the time it submitted a bid or entered into a construction contract.

Check contractual claim deadlines.

Many contracts for major construction projects contain detailed claim and dispute resolution provisions. The contractor’s access to certain claim resolution methods may be lost if it fails to make a timely request. The construction contract may even restrict the time in which the contractor may file claims in court.

Check statutory claim deadlines.

Most states impose strict deadlines for the assertion of liens. Other statutory deadlines also may apply. While there are no lien rights on public projects, there are analogous rights to assert claims against the project bond or retainage, subject to timely filing and specific forms of notice. Complying with statutory requirements may require considerable lead time to collect information, find the right place for filing and draft the proper forms of notice.

Have notices been given to insurers?

Insurance policies generally require timely and ongoing notices and cooperation in the dispute resolution process. Make sure you have given proper notices and have an understanding with your insurer about how any claim resolution process will proceed.

Do you have concerns about others’ financial viability?

In this tight economy, it may be prudent to consider whether any party involved in your project is in financial distress. If a contractor or subcontractor is running out of money, is there a bond or parent company guarantee in place, and is the person providing security alerted to the problem? If the owner is running out of money, the contractor needs to be cautious about performing work and incurring costs that may not be reimbursed.

Karl Oles, is a partner in Stoel Rives’ construction and design group.

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