Womble Carlyle Construction Industry Blog

Following the construction industry and related legal topics in the United States.

Wednesday, July 25, 2007

Builder’s Dream Home a Bit of a Nightmare

A Lake Norman, North Carolina homeowner gave a builder "consent" to use plans copyrighted by an architect as long as he built 30 miles away, because "[she] felt with all we had paid, we owned the plans at that time." All was fine until the builder’s subcontractor asked the architect for clarification on how to build the windows in the French-country style house. Well, the homeowner did not own the copyright, the architect sued in federal district court and was awarded $20,000 from the builder for unauthorized use of the copyrighted plans. Not satisfied, the architect appealed, wanting additional damages and an injunction prohibiting sale of the house. See Christopher Phelps & Associates, LLC v. Galloway, --- F.3d ---, 2007 WL 1933594 (4th Cir. 2007); North Carolina Lawyers Weekly, July 16, 2007.

The 4th Circuit Court of Appeals agreed with the lower court’s discretionary ruling that the architect had been adequately compensated with the $20,000 award, and that taking away the builder’s right to lease or sell the house would be a "draconian burden." In addition, the injunction would be overbroad since it would encumber a great deal of property unrelated to infringement.

However, the Court of Appeals disagreed with the lower court’s discretionary ruling that the builder did not have to return or destroy the infringing plans, since the builder did not need the plans to complete the house since it was substantially constructed except for interior finish work.

What is the lesson learned? While the decision is filled with detailed legal analysis of copyright law, the lesson is simple -- if plans include on each page the words "© 2000 Copyright – Christopher Phelps & Assoc., L.L.C. these plans are protected under the federal copyright laws. The original purchaser of this plan is authorized to construct one and only one home using this plan. Modifications or reuse of this plan is prohibited.", then you will need consent from the architect, not the homeowner who "felt with all we had paid, we owned the plans at that time." (This entry published by Ken Michael, a member of Womble Carlyle's construction and real estate development group.)

Source: North Carolina Lawyers Weekly

Thursday, July 19, 2007

EPA Touts Increased Construction of Energy Star Complaint Homes


In 2006, the percentage of newly constructed single family homes earning the government's Energy Star for superior energy efficiency exceeded 12 percent in 15 states. The 15 leading states are: Alaska, Arizona, California, Connecticut, Delaware, Hawaii, Iowa, Nevada, New Hampshire, New Jersey, New York, Ohio, Texas, Utah and Vermont."

Consumers don't have to limit their smart energy choices to energy efficient cars and appliances," said Bob Meyers, EPA's principal deputy assistant administrator for Air & Radiation. "EPA is pleased to see builders in so many states leading the effort to offer their customers high-efficiency, low-emission choices in new homes."

Nearly 200,000 new homes nationwide earned the Energy Star in 2006, bringing the total number of Energy Star qualified homes across the nation to almost 750,000. To date, these homes have locked in annual savings of more than $180
million for homeowners by saving over 1 billion kWh of electricity and 100 million therms of natural gas.

Homes that earn the Energy Star offer homeowners all the features they want in a new home, plus energy-efficiency improvements that deliver better performance, greater comfort, and lower utility bills, all while helping to protect the environment.

To earn the Energy Star, homes must be independently verified as meeting EPA's strict guidelines for energy efficiency. These homes are [at] least 15 percent more energy efficient than homes built to the 2004 International Residential Code, and include additional energy-saving features that typically make them 20 to 30 percent more efficient than standard homes.

Home energy use accounts for nearly 17 percent of the total U.S. greenhouse gas emissions and 21 percent of energy consumption nationwide. For more than a decade, EPA has been working with the housing industry, utilities, states, and independent energy efficiency home ratings professionals to bring increased energy efficiency to the homebuilding industry. Today, more than 3,500 builders are committed to building Energy Star qualified homes. And there are Energy Star qualified homes in every state across the country.

EPA started the Energy Star program in 1992 as a market based approach to reducing greenhouse gas emissions through energy efficiency. In 2006, Americans, with the help of Energy Star, saved $14 billion and prevented greenhouse gas emissions equivalent to those from 25 million vehicles.

Two observations: (1) Of the 15 states mentioned in this press release, none of them are in the South. That is disappointing because the South leads all other regions in construction of new, single-family homes . (2) 12% is a very low number given the nominal increase in up front costs to build an Energy Star complaint home (not to mention savings on the back end for homeowners). That means 88% of new single family homes built in the U.S. are not Energy Star complaint.

Sources: EPA, U.S. Census Bureau

Thursday, July 5, 2007

"Single Contractor" and "CM-at-Risk" proved to be popular contracting methods, as UNC System bond construction program winds down

With about 75% of projects completed over five years, the sweeping, system-wide construction program for the University of North Carolina constituent institutions is nearing the end of its $2.5 billion cycle. There were projects undertaken at each of the 16 campuses, some of which changed so much that alumni might not even recognize some of their old haunts. As reported by the News & Observer, "the construction program was driven by historic growth. In the past six years, about 32,000 more students have enrolled in UNC system schools, for a total of about 202,000 statewide ." Rob Nelson, Vice President of Finance for the UNC system, noted that a key to successful implementation of the building program was due to the Higher Education Bond Oversight Committee, which received regular reports and helped keep projects moving forward. The single contractor (as opposed to the previously used multiple prime contractors) and "Construction-Manager-At Risk" were new, popular approaches used in the program, and are likely to continue after institutions return to more regular construction budgets and cycles. Though the present program is winding down, state universities will continue to build more and more, as the UNC System projects almost 100,000 additional students may be in the system by 2017. (This entry published by Liz Riley, a member of Womble Carlyle's construction and real estate development group.)

Source: The News & Observer