Contractor And Subcontractor Payment Act Applies To Mixed-Use Projects Involving Both Residential And Non-Residential Or Commercial Units. – Real Estate and Construction

United States:

The Contractor and Subcontractor Compensation Act applies to mixed-use projects that include both residential and non-residential or commercial units.

December 29, 2021

Marshall, Dennehey, Warner, Coleman & Goggin

To print this article, all you need to do is register or log in to Mondaq.com.

The Contractor and Subcontractor Payments Act (CASPA), 73 Pa. Stat. Ann. Sections 501 ff. Apply to construction contracts, with the exception of contracts for public construction projects and construction contracts for the improvement of properties that consist exclusively of six or fewer residential units under construction at the same time. In order to be entitled to discharge under CASPA, a party must first establish a contractual payment claim based on either a written or oral construction contract and a subsequent violation of this construction contract. In the circumstances set out in CASPA, an owner, contractor or subcontractor who fails to make payments to a contractor or subcontractor in accordance with the law may be held liable for interest, penalties, legal fees and legal costs.

The project in question in El-Gharbaoui was a multi-purpose project with a church, a day care center and two residential units. Despite the inapplicability of CASPA to projects to improve six or fewer residential units under construction at the same time, the court concluded that CASPA applied to the disputed mixed-use project in El-Gharbaoui because “CASPA’s objective would be thwarted, when the Act was deemed inapplicable to construction contracts covering commercial buildings including mixed-use development, simply because the construction contract provided for improvements on the same property or building to six or fewer residential units.

The content of this article is intended to provide general guidance on the subject. Expert advice should be sought regarding your specific circumstances.

POPULAR ARTICLES ON: United States Real Estate and Construction

(Even) more of it for 2022 ?!

Mint

I admit that those of us in the commercial real estate world tend to toss around phrases like “trapped,” “buried,” “underwater” and “fire drill” pretty loosely …

FinCEN wants to regulate the real estate market

Morrison & Foerster LLP

On December 6, 2021, the Financial Crimes Enforcement Network (FinCEN) announced a Pre-Announcement of the Proposed Rule-Making (ANPRM) to seek comments in preparation of a rule proposal …