Real Estate

Work-site Accidents: Use of Sub-Subcontractors Makes it Hard to Fix Liability

A labor shortage has led to a fracturing of work sites, where subcontractors can’t complete projects with their normal crews, so they hire small "subs of subs" below them, The Tennessean reports. Some of these workers are sent onto scaffolding and roofs without safety equipment or training. Federal law places primary safety responsibility on the direct employer, however, experts say many companies pay construction workers as independent contractors, avoiding certain regulations. More construction workers died in the Nashville metro area in 2016 and 2017 compared with any two-year stretch in the previous three decades. Most of the 16 deaths were from falls without any harnesses or other protection.
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Company to Build Home in Chattanooga Using Robotic Technology

A new architectural startup called Branch Technology will use 3D-printing robots to build its first home this year in Chattanooga, The South China Morning Post reports. Branch's machines will print the walls, roof and floor of the 1,0000-square-foot model over the span of a few months, and then a construction crew will assemble the components on-site.
 
Branch says that the construction process will produce less waste than traditional homebuilding because the machines will print only the necessary parts and that the method will make homes that are three to four times stronger than typical wood construction. The company estimates that the prototype will cost $300 to $400 per square foot to build but plans to get that price down before it starts selling homes.
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Senate Committee Votes to Overturn Local Short-term Rental Laws

A Senate committee voted to advance controversial Republican-backed legislation that would overturn a Nashville ordinance set to gradually eliminate certain types of short-term rentals, led by companies such as Airbnb, as well as similar prohibitions in other cities, including Knoxville, reports The Tennessean. The Senate Commerce and Labor Committee voted 7-2 to approve a now-revamped ‘Short Term Rental Unit Act’ introduced by Sen. John Stevens, R-Huntingdon, and Rep. Cameron Sexton, R-Crossville. If passed, the bill will block a Nashville ordinance passed in January to phase out most non-owner-occupied short-term rentals that currently exist in residential neighborhoods over the next three years, as well as a similar prohibition that passed last year in Knoxville. However, the bill allows local municipalities to still prohibit certain types of short-term rentals and require grandfathered short-term rentals to acquire permits. In addition, a local government could revoke a permit for a grandfathered unit if it violates standards on three separate occasions.
 
"Obviously, I'm pleased with the outcome," Stevens said after the bill passed in the committee. "I think it is a very difficult issue, but it's our property and it's a very personal issue. It's a distinction between the property rights and government, even if it is local government." Sen. Steve Dickerson, R-Nashville, who is not a member of the committee, spoke against the measure saying, "If there is a permit that is issued by a local government, there is a mechanism that they might revoke that permit.”
 
"It is my impression that (the amendment) is somewhat too restrictive," Dickerson said. "The bill makes it almost impossible to do that."
 
The Nashville Area Short-Term Rental Association urged approval of the bill in a letter to lawmakers. “We are regular folks working to make a living and want to contribute to our local and state economy,” the short-term rental association’s letter reads. “Please protect the property rights of all. Please vote to pass SB1086 with amendments.” Detractors contend that short-term renting has displaced longtime residents by attracting investors who don’t live in the homes they rent out. 
 
Twenty-seven cities in Tennessee have rules that don't allow non-owner-occupied short-term rentals in residential areas, including Knoxville, Brentwood, Germantown and Smyrna. Local officials say they are just following zoning laws that restrict businesses in residential areas. Some cities have gone further by outlawing all short-term rentals, including owner-occupied types. These include Davidson County's five satellite cities — Belle Meade, Berry Hill, Forest Hills, Goodlettsville and Oak Hill. You can track the legislation using this link.
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Tennessee Infrastructure Needs $45 Billion for Next 5 Years

Tennessee's annual estimate of costs for needed roads, schools, parks and other infrastructure is now $45 billion in the five years between 2016 and 2021 reports the Chattanooga Times Free Press. This is an increase of about $2 billion, or 4.7 percent, from last year, according to the Tennessee Advisory Commission on Intergovernmental Relations, or TACIR, a research institution that explores solutions for state and local governments.
 
In its latest report issued Monday, TACIR hopes that the infrastructure inventory could help local communities to woo federal dollars under President Donald Trump's pending infrastructure plan. The report includes a statewide overview chapter with information by type of infrastructure, the condition and needs of our public-school facilities, the availability of funding to meet reported needs and a comparison of county-area need, including one-page summaries for each Tennessee county.
 
Costs for current infrastructure needs fall into six general categories:
  • Transportation and utilities: $24.8 billion
  • Education: $10.4 billion
  • Health, safety, and welfare: $6.9 billion
  • Recreation and culture: $1.8 billion
  • General government: $767 million
  • Economic development: $360 million
Preliminary discussions of Trump's infrastructure plan indicate states could receive rural infrastructure funds if they have plans for investing the money. The TACIR news release said the report "could provide a foundation for meeting this or similar requirements." The report in its entirety can be found here.
 
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Federal Judge Awards Street Artists $6.7 Million in Milestone Case Against Landlord

On Monday, a federal judge in Brooklyn awarded $6.7 million in damages to 21 artists whose work at 5Pointz — a former factory turned space for artists' studios in Queens, NY — was destroyed according to The Washington Post. This comes after a three-week trial in November 2017 in U.S. District Court in Brooklyn. The case marked the first time a court has been asked to determine whether graffiti, with its transitory nature, should be considered art protected under the Visual Artists Rights Act (VARA), weighing a property owner's rights against the rights of visual artists. 
 
Senior United States District Judge Frederic Block awarded the artists the maximum damages possible, saying the building's owner, Gerald Wolkoff, "willfully" ruined the artwork and showed no remorse for his "recalcitrant behavior." "He was bent on doing it his way, and just as he ignored the artists' rights he also ignored the many efforts the Court painstakingly made to try to have him responsively answer the questions posed to him," Block wrote in his opinion. "Wolkoff has been singularly unrepentant."
 
As a final resort one tenant, Johnathan Cohen, tried to prevent the imminent demolition by seeking a preliminary injunction against Wolkoff under VARA. The court denied the plaintiffs' application for a preliminary injunction but said an opinion would come within eight days. "Rather than wait for the Court's opinion," Block wrote, "Wolkoff destroyed almost all of the plaintiffs' paintings by whitewashing them during that eight-day interim."
 
The landlord and his lawyer have contended that the artists knew for years that the buildings would ultimately be demolished but Block said Wolkoff should have put off demolishing the properties for at least 10 months when he had all his permits. The judge said Wolkoff's "precipitous conduct was an act of pure pique and revenge for the nerve of the plaintiffs to sue to attempt to prevent the destruction of their art."
 
The case is also the first time that a jury decided a VARA claim in court.
 
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Construction Industry Faces Shortage of Workers Amid Unprecedented Growth

A recent WSMV story highlights concerns of builders in middle Tennessee regarding a shortage of construction workers. The area has seen unprecedented growth, with an estimated 75 people a day moving into the Nashville area alone.
 
"What used to take us about 120 days on average to build a house is now taking us 180 days plus," said Dave McGowan, the owner of Regent Homes, a locally owned home building company in Nashville. "There's a shortage of bricklayers. There's a shortage of different tradesmen from everything, from people who do our carpet work and do our floor work. All the people that really requires skill, there's a true shortage of those people," he continued.
 
This comes at a time when several planned, large-scale construction projects including repaving Interstate 440 and Nashville's proposed metro transit upgrade, will only further exacerbate the problem. Nashville is also on the short list of cities for Amazon's second headquarters, Amazon HQ2, an 8.1-million square foot campus that will create an estimated 50,000 new jobs for the area and a huge need for skilled construction laborers.
 
One way to build the workforce is through high school recruitment. Go Build Tennessee, a nonprofit comprehensive workforce development initiative that seeks to address the problem by getting teens interested in joining the construction workforce, routinely visits area schools to inform young people, parents, educators and influencers about shortages and opportunities in the various construction related trades.
 
"If they are able to go to trade schools and learn that skill set, they would be able to have a job," McGowan said. With only one person replacing every five leaving the construction field, Tennessee will certainly be tasked with finding new and novel ways to address these challenges.
 
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Hot Topics in Real Estate 2017

The annual Hot Topics in Real Estate program, a collaborative between the Tennessee Bar Association and the Tennessee Land Title Association, is right around the corner. This program offers advanced topics in real estate for Tennessee lawyers and the opportunity to network with professionals sharing your focus.
 
This year's program will return with perennial favorites: legislative updates and case law updates, providing you with the important information needed to stay on top of your game. New this year are two innovative sessions focused on pressing issues in cybersecurity, an ever-changing market that often requires a novel approach. Section members receive a discounted rate for the program. For more information and to register for this event, click here.
 
 
• When: Nov. 10, registration begins at 8 a.m., CDT
 
• Where: AT&T Building, Auditorium, 333 Commerce St., Nashville, TN, 37201
 
 
Other topics include:
 
tax sales
commercial underwriting
sovereign citizens and squatters
 
Speakers/producers include:
 
• Scott Augenbaum, Federal Bureau of Investigation, Nashville 
• Joshua Denton, Gullett Sanford Robinson & Martin PLLC, Nashville 
• Joshua Hopkins, Rubin Lublin, LLC, Peachtree Corners 
• Joseph Kirkland Jr., CloseTrak, Memphis 
• Gerald Morgan, Wilson & Associates, PLLC, Brentwood 
• Mark Rosser, First American Title Insurance Company, Knoxville
• Charles Welch Jr, Farris Bobango PLC, Nashville
 
Course material will be made available online. We hope to see you there.
 
 
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