Massachusetts High Court Voids Advance Waiver of Subcontractor Bond Rights

Last month, the Massachusetts Supreme Judicial Court held that a contract provision that required a subcontractor to waive its bond rights for work to be performed on a public project was void and unenforceable.

The court explained its ruling by noting, among other things, that the bond requirement set forth in M.G.L. c. 149 § 29 was designed to benefit subcontractors who work on public construction projects, as these subcontractors lack the right obtain a mechanic's lien. The court noted that Massachusetts already prohibits advance mechanic's lien waivers, and the same policy reasoning should apply to prohibit advance waivers of bond claims.

Contractors and subcontractors should be aware that the court only discussed claims involving bonds supplied pursuant to M.G.L. c. 149 § 29, and this ruling does not necessarily apply to other payment bonds.

A copy of the court's decision in the matter of Costa v. Brait Builders Corporation and Arch Insurance Company (SJC-11011) can be found here.

New Hampshire to Allow Liens for Professional Design Services

The New Hampshire Legislature has passed, and the Governor has signed, a bill amending Chapter 447 of the New Hampshire Statutes which covers Liens for Labor and Materials. The amended statute will allow those who provide "professional design services" to file and perfect mechanic's liens for nonpayment of work related to a construction project. Formerly, the statute only applied to those who performed labor or provided materials for a construction project. The statute defines "professional design services" to include "any services provided by a licensed architect, licensed landscape architect, licensed engineer, permitted septic designer, certified wetlands scientist, certified soil scientist, or licensed land surveyor that is directly related to the improvement of real property." The amendment also extended the right to file and perfect liens to subcontractors who provide professional design services.

Ken Rubinstein Quoted in ENR on Controlling Personal Liability for Construction Executives

Preti Flaherty construction law attorney Ken Rubinstein has been quoted in a recent article published by ENR focusing on the growing risks of personal liability for construction executives.

The article quotes Ken in discussing potential gaps in insurance coverage and the growing risks that are emerging in the new economy.

ENR is the leading publication for contractors, project owners, engineers, architects, government regulators and industry suppliers nationwide. For a link to the article, click here.