Author Archives: Leonardo Ortiz

As part of Leadership Hollywood Class XXXVIII, I am on a committee that is organizing the first annual Hollywood Beachtown Hop as a fundraiser for the Joseph Meyerhoff Center.  The Meyerhoff Senior Center is located in Hollywood and has been providing programs and services for older adults in the community for over 30 years.  The Center offers a wide arrange of services including recreation, health support services, Adult Day Care program, and an Alzheimer’s disease Initiative.  The facilities includes meeting rooms, an art studio, a stage, library and kitchen. The Beachtown Hop will take place on March 29, 2014 and feature local businesses.  You may visit the Facebook and Twitter links below to obtain additional information on participation and sponsorship opportunities.

The FB link is https://www.facebook.com/events/630363513687541/

The Twitter link is www.twitter.com/hlwdhop

Visit our website now for full details including vendor list, press release, sponsorship opportunities, and link to purchase your tickets now at Eventbrite.

http://hollywoodbeachtownhop.com/

The overall success of any construction project hinges largely on the general contractor’s ability to properly coordinate its subcontractors.  The written subcontract governs the relationship between the general contractor and subcontractor. Therefore, the importance of a clear and comprehensive subcontract cannot be overstated.  A well-written subcontract will go a long way towards ensuring the project runs smoothly by minimizing disputes between the general contractor and subcontractor.

The ten most important terms of a subcontract are:

• Scope of Work: The subcontract should carefully clearly define the scope of work to ensure both parties understand what is expected on the project.  In many instances subcontractors will provide a proposal prior to entering into a subcontract.  In order to minimize disputes during the project, the parties should carefully compare the scope of work in the proposal is consistent with the scope of work set forth in the subcontract.

• Schedule: The general contractor’s right to properly sequence and coordinate works should be set forth in the subcontract.  The subcontract should also specify the timeframe for subcontractor to complete its scope of work.  The subcontract should include a copy of the project schedule if available.  The subcontract may include the subcontractor’s liability for liquidated damages which must be carefully written to ensure it is enforceable.  Finally, the general contractor may protect itself with a “no damages for delay” clause which limits a subcontractor’s rights in the event of delays by general contractor or other subcontractors.

• Payment:The price, terms, and conditions of payment should be clearly identified in the subcontract.  This portion of the subcontract should set forth the procedure for payment applications and identify all documents (i.e. releases) that must be submitted for the subcontractor to receive payment.  Notably, the subcontract may include a “pay-when-paid” clause which makes the contractor’s duty to make payment to the subcontractor contingent upon receipt of payment from the owner.  These clauses are generally valid and enforceable in Florida when properly drafted.

• Indemnification:Florida Statute 725.06 imposes limitations on indemnification clauses in construction contracts.  On private projects, fairly broad indemnification is permitted if the contract contains a monetary limitation on the extent of indemnification and is part of the project specifications or bid documents.

• Default and Termination:  The subcontract should address the right to default and terminate for non-performance.  In order to ensure a termination clause is enforceable it should clearly define the events that constitute a default under the subcontract.  The provision should also include a specific procedure for notification of default and subsequent notice of termination if the default is not cured with a specified timeframe.  The subcontract may also provide alternatives to termination such as supplementation, withholding payments, and right to make direct payments.

• Changes:  A well written change order clause will include a detailed procedure for submission and approval of change orders.  This typically includes a requirement that the subcontractor submit a request for change order within a specified timeframe of becoming aware of the additional work.  This procedure should also address the subcontractor’s responsibility to perform change order work pending approval.

• Dispute Resolution:  The subcontract should address specific procedures for notification, submission, and review of claims.  Most importantly, this provision should specify whether claims that are not resolved by the parties will be decided through litigation or arbitration.  An arbitration clause must be carefully written to ensure that it is enforceable.

• Inspection of Work & Warranties:  It is important to identify procedures for inspection of the subcontractor’s work and subcontractor’s responsibility to correct defective work.  This should include written notice to subcontractor with a specified timeframe for subcontractor to remedy defective work.  The subcontractor’s responsibility to correct defective should extend until expiration of the warranty period. The typical subcontract requires a 1 year warranty after final completion of the work.

• Flow Down Provisions:  A flow down provision incorporates the prime contract between the owner and general contractor into the subcontract.  This binds the subcontractor to the general contractor to the same extent the general contractor is bound to the owner.  This becomes important for resolution of pass through claims which are submitted to the owner by general contractor.  The subcontractor should request a copy of the prime contract if the subcontract contains a flow down provision.

• Insurance and Bonding:  There are various types of insurance policies that are typically purchased for construction projects, including Commercial General Liability, builder’s risk, and errors and omissions.  The subcontract should identify all insurance requirements for both the general contractor and subcontractor.  Further, if either party is required to provide a payment or performance bond this should also be identified in the subcontract.

Everyone has heard the old saying “get it in writing”.  I’ve had two recent meetings that demonstrate the importance of written contracts in business deals.  In both cases my clients were owed money from business deals that went south.  In today’s economy, this is not unusual.  However, Client “A” had a written contract for its business relationship and Client “B” did not have a written contract.

Client “A” had a written contract that detailed the terms of the parties’ agreement.  I was able to review Client “A”’s contract and analyze the strength of the claim.  As a result, Client “A” was able to quickly make an informed decision on whether to pursue a lawsuit to collect the money they were owed.  Unfortunately, this was not case for Client “B” because they did not have a written contract.  Without a written contract, Client “B” is now faced with first proving that there was actually a business relationship and what the terms of that relationship were.  Client “B” has kept good documentation which will assist in pursuing its claim.  However, the process of analyzing the strength of Client “B”’s claim is complicated by the lack of a written contract because it is difficult to determine how a judge or jury will look at other documents in determining the validity of the claims.

Of course just because you have a written contract doesn’t mean that there will never be any issues.  However, when you have a written contract there is a greater probability of resolving these issues when they arise because the contract typically address each parties’ responsibilities.  And if the claims can’t be resolved your odds of prevailing at litigation increase when you have a written contract that a judge or jury can review.

Every business relationship is unique so what needs to be included in a written agreement depends on the nature of the parties’ business arrangement.  However, there are some basic terms that should be in every business agreement including: 1) the parties’ relationship; 2) the parties’ responsibilities; 3) payment terms; 4) record keeping; and 5) dispute resolution.  Finally, I would strongly recommend that you have an attorney draft your business agreement or at minimum have an attorney review it prior to signing any agreement.

My wife and I are always telling our kids how important it is to be thankful for our family and everything we have in our daily lives.  However, I know the reality of the daily routine makes it very easy to lose sight of the fact that there are those less fortunate right here in our community.  This was never more evident to me than after my latest session in Leadership Hollywood Class 38.  The Health and Human Service Day is an opportunity to highlight the scope of services the City of Hollywood offers in the area of Healthcare and social services.

We visited several facilities within the Memorial Regional Hospital system and different non-profit social service facilities in Hollywood including: 1) Meyerhoff Senior Center; 2) Lucanus Developmental Center; and 3) Broward Outreach Center.  Having the opportunity to visit these facilities provided a stark reality check into the needs and challenges facing these social service providers.

The Meyerhoff Senior Center has been providing programs and services for older adults in Hollywood for over 30 years.  The Senior Center offers a wide arrange of services including recreation, health support services, Adult Day Care program, and an Alzheimer’s disease Initiative.  The facilities includes meeting rooms, an art studio, a stage, library and kitchen. I am very excited to be currently involved in organizing a fund raising event for Meyerhoff Senior Center through Leadership Hollywood.

The Lucanus Development Center is a facility dedicated to providing care and services to persons with development disabilities.  The organization began as a Sunday school program for developmentally disabled adults and has grown over the past 40 years to its current facility in Hollywood.  The facility offers various day programs which include a karate and drama program which performs throughout the community.  The program also provides surrogate homes and field trips throughout the State of Florida.

Finally, we toured the Broward Outreach Center which personally was the biggest eye opener.  The facility assists homeless people beyond simple food and shelter.  The most disheartening part of the tour was hearing about the number of families currently staying the facility.  The Center provides an impressive residential program which provides food, substance abuse treatment, education, computer literacy, job placement, healthcare, spiritual development, and housing.

Each of these excellent facilities are non-profit organizations which are currently in the need of volunteers and financial donations.  I am working using my involvement in Leadership Hollywood to spread the word and help support social services in our community.