Wisconsin Builders Association

Lead-Safe Renovator Refresher and UDC Training May 30

Christine Shaefer CAE — Wed, 22 May 2013 16:11:46 +0000

Lead-Safe Renovator Refresher – 8 a.m. – 12 p.m., 4 credits Dwelling Contractor Qualifier Credential continuing education; $99/WBA member or $124/non-member. Get details and register here: http://www.wisbuild.org/news-and-information/calendar.html#bf_calFrame_802

Uniform Dwelling Code Training – 1 – 3 p.m., 2 credits Dwelling Contractor Qualifier Credential continuing education; $40/member or $50/non-member. Get details and register here: http://www.wisbuild.org/news-and-information/calendar.html#bf_calFrame_558

Congratulations, Tim O’Brien Homes!

Jerry Deschane, CAE — Mon, 20 May 2013 13:21:26 +0000

Wisconsin home builder Tim O’Brien Homes was recognized in this month’s issue of Builder Magazine; making it into the rankings among the top 200 home builders in the country. Tim O’Brien, which was not in the ranks in 2011, made its debut at 167th. The ranking is based upon the number of home closings during the calendar year. During 2012, according to the report, Tim O’Brien Homes closed 124 new home sales. Tim O’Brien Homes is headquartered in Pewaukee, with offices in Madison.

The only other builder with a Wisconsin presence on the list is Illinois-based William Ryan Homes. William Ryan ranked 132nd on the list of volume builders, with 204 closings. In 2011, William Ryan Homes ranked 114th.

From NAHB: Educate Yourself on These Major Revisions

WBA Staff Professionals — Fri, 17 May 2013 16:30:34 +0000

The free “Be Ready for Changes to the National Flood Insurance Program,” on Thursday, May 23, 2:00 to 3:00 PM ET, focuses on the significant revisions to the National Flood Insurance Program under the Biggert-Waters Flood Insurance Reform Act of 2012, including the changes in rate structures and resulting price increases, as well as changes in rates triggered by new or updated flood maps.

This webinar is co-hosted with the National Association of Realtors (NAR). In addition to speakers from NAHB and NAR, a representative from the Federal Emergency Management Agency will answer participants’ questions about changes to the program.

Speakers: Tabby Waqar, Program Manager, NAHB Environmental Policy Advocacy Group; Russell W. Riggs, Senior Regulatory Representative, National Association of Realtors

Learn more about NAHB’s Webinar series at nahb.org/webinars.

WBA Legal Hotline Best of: Is a general contractor responsible to the owner for the defective work of the general contractor’s subcontractors?

Robert Procter — Mon, 13 May 2013 14:35:52 +0000

Generally, the owner has a contract with the general contractor to construct the project. If there is a construction defect with the project, then the owner will look to the general contractor regardless of whether the general contractor or the subcontractor did the work. Assuming the work is defective, the general contractor would then have a claim against the subcontractor for the defective work. In other words, if there was a lawsuit, then the owner would sue the general contractor claiming the work is defective.

The general contractor would sue the subcontractor claiming that if there is any defective work that the general contractor must remedy for the owner, then the subcontractor is responsible for the costs of the remedy.

There are many variations of contracts that can change how the liability is allocated between the parties. For example, the subcontractors or material suppliers may provide a warranty directly to the owner. In such cases, the general contractor’s contract with the owner may exempt work covered by another contractor’s warranty from the general contractor’s warranty. The point is: you need to understand your contracts with the owner and with the subcontractors.

This Wisconsin Builders Association Hot Line is a service provided by Axley Brynelson, LLP on behalf of the Wisconsin Builders Association. The service and the answers to the questions in this blog should be considered a general statement of applicable legal information. Given this format, it is impossible to fully address all potential legal issues which might apply in any particular situation. A determination of any individual’s legal rights in a transaction can only be obtained after complete analysis of the law and its applicability to the particular fact situation. Please contact the WBA Legal Hotline if additional information is needed, or private counsel, if legal advice is needed. Thank you for using the WBA Legal Hotline service.

WBA Legal & Building Code Hotline

Kathy Johnsen — Thu, 25 Apr 2013 19:57:54 +0000

WBA members have exclusive access to the WBA Legal & Building Code Hotline, which is a service provided by Axley Brynelson LLP. The hotline is set up to give members a place to call to get free information and education on building-related legal issues as well as building code and ordinance issues. If you have a question on any of these issues, begin by calling 1-888-WIS-BILT and your call will be redirected to the appropriate person.

The hotline will answer questions that are relevant to the building, remodeling, and development industries. Examples of this include information on liens, contracts, land use, local ordinances, fees, building codes, and other related issues. If your question requires information outside the scope of the hotline service, you will be directed to an outside source for more information.

Hundreds of members have already taken advantage of this valuable membership benefit. Be sure to keep it mind as you go about your busy workdays!

Best of the WBA Legal Hotline Volume 2: Can a general contractor delay payment to a subcontractor until such time that the owner pays the general contractor?

Robert Procter — Thu, 25 Apr 2013 14:44:42 +0000

Yes – so long as it is in the contract between the general contractor and the subcontractor. Wisconsin law does not prohibit a contract provision that may delay a payment to a subcontractor until a general contractor receives payment from the owner. Wis. Stat. § 779.135(3). These provisions are often called “paid when paid” provisions.

However, such a provision needs to be in the contract between the general contractor and the subcontractor or material supplier. This only allows for a delay in payment. As stated above, if the owner does not pay the general contractor, then the general contractor must still pay the subcontractor.

Best of the WBA Legal Hotline Volume 1: Is a general contractor responsible for paying a subcontractor if the owner doesn’t pay the general contractor?

Robert Procter — Fri, 19 Apr 2013 14:00:07 +0000

Answer: In the typical construction project, the owner will hire a general contractor to construct the project. The general contractor will contract with subcontractors to do portions of the work. In this case, the subcontractor does not have a contractual relationship with the owner. If the subcontractor has completed its work, then the general contractor has a contractual obligation to pay the subcontractor even if the owner never pays the general contractor. Under Wisconsin law, a general contractor’s contract with a subcontractor cannot include a provision that states the general contractor will only pay the subcontractor if the owner pays the general contractor. Wis. Stat. § 779.135(3). These provisions are often called “paid if paid” provisions.

There are situations where a contractor will contract with the owner only for the work that the contractor self-performs (for example, framing and finishing carpentry). The contractor will then assist the owner in a project management role to obtain bids from other contractors to perform the other portions of work such as roofers, siders, plumbers, etc. The other contractors will then directly contract with the owner. In these cases, the owner and not the contractor will be responsible for payment of the other contractors. However, any contractor that operates under this method should make sure that its contract is very clear so it does not create a prime contractor / subcontractor relationship as to the other contractors and the responsibilities that go along with such a relationship.

Set your self apart from your competition

Megan Lindsey WBA Foundation Director Education Director — Tue, 16 Apr 2013 13:05:19 +0000

Did you know that there are more than 76 million baby boomers? This group of aging individuals is increasingly choosing to stay in their existing homes; however, the demand for accommodations such as wider doors, better lighting and first-floor laundry is a growing trend among remodeling for this group – are you ready to meet these requests and do it in a way that sets your company apart from others in your area?

Now is the time to achieve your Certified Aging in Place Specialist (CAPS) designation. The courses offered in this program will help you communicate with maturing customers, understand the guidelines and requirements of accessibility, the importance of doing an assessment with input from occupational and physical therapists as well as qualified health care professionals, and the significance of good design in making modifications that can transform a house into a safe, attractive, and comfortable home for life.

Learn more about the CAPS classes being offered at Lakeland Builders Association in May & September at http://wba-foundation.org/education/nahb-designation-classes or contactMegan Lindsey at 920-419-4729.

Reasons You Should be Building Your New Home Now

David Belman — Thu, 04 Apr 2013 20:54:59 +0000

1. Housing Market is Stable again

Wisconsin has shown double digit gains in sales for 20 months straight per WRA statistics. Even the average sale price has been making small steady increases. https://www.wra.org/HSRJanuary2013/

2. Lumber prices are climbing out of control.

Prices on OSB have shot through the roof (literally) One look at this chart below shows you all you need to know.

3. Other construction prices are fast on the rise

2×4′s have risen sharply since last year, as well as drywall which has increased at roughly $900 per home. Asphalt shingles as well as masonry have shown modest increases as well. What this means is pricing on new construction is going up and even new spec homes are going to cost more that ones that are currently on the market. Expect to see less price flexibility and discounts from builders.

4. Interest rates have climbed

Believe it or not interest rates have jumped. About 2 weeks ago they went up a 1/4 point, (no big deal right?) but then followed up with more volatility the following week. Our historic low interest rate is probably a thing of the past but the current rate is still incredible and this is more proof that they are not going to last. Especially if you are looking to build you should be securing your home as soon as possible before the rates jump again. If you were hoping to hit the rock bottom, sorry, you are already too late.

Data for this Date Range
Feb. 14, 2013	3.53%
Feb. 7, 2013	3.53%
Jan. 31, 2013	3.53%
Jan. 24, 2013	3.42%

Jan. 17, 2013	3.38%
Jan. 10, 2013	3.40%
Jan. 3, 2013	3.34%

5. Lot availability has dwindled

Not to long ago we were discussing a over supply of lots. To some extent that is true in fringe and undesirable areas. However, the reverse is true in solid growing markets. The majority of good inventory has been gobbled up by savvy home buyers and builders looking for good speculation buys. This problem is only going to get worse and worse over time since it can take years to replace developments. This is going to push lot costs back up as demand is far greater than supply. Developers are still struggling with obtaining financing on projects so many viable options remain shelved. Also municipalities are struggling with approvals as many have not worked on new development if excess of 5 years so everyone is starting over in that regard. There already is a demand for new lots for sale in premier areas.

6. Trading up is still beneficial

You may not fetch top dollar for your existing home but if you are trading up to a larger home you are still buying a great prices and can offset your loss plus some. The longer you wait, however, the less of a gap there is due to rising prices and interest rates.

7. Construction labor

This is a scary topic for builders as well. As we all know many very talented tradesmen left the industry during the housing decline. Carpenters both rough and finish, masons, even electricians and plumbers. These are types of individuals that you cannot replace quickly or easily. They have a wealth of knowledge and certain physical skill set and passed down knowledge that you cannot easily replicate. Added to that is that the majority of high school graduates do not have as much interest in the trades and want to jump into college looking for a cushy desk job after they graduate. (even though they there is a nearly 50% unemployment rate for those individuals) We as an industry need to do a better job identifying individuals who are good candidates for the trades and show them that it is a good, well paying, rewarding job.

If we cannot get good new tradesman, it is only going to push the labor costs up for the experienced, well qualified individuals. They are also going to have to hire more inexperienced people and mentor them up. I could less smaller framing crews and more, larger carpentry outfits with multiple crews and one head foreman to meet the expanding demand.

8. Lower Cost of Ownership

New construction is 30 – 40% more efficient than existing homes per a CNNMoney article. Plus there is no replacement cost for many years that you will have on a existing home. In the Midwest the average savings is $462 per home. If you have a Focus on Energy Certified home you can save well over $1160 over a code built home. In the same article the average roof replacement was $18,000 and the average furnace replacement was around $3000.

9. New Construction commands higher premiums among buyers

The CNN Money article state new structures tend 10 – 15% more than a similar used home.

10. A 2012 poll by BDX reported the top 10 considerations for a new home. The following were factors were listed by buyers in terms of importance, most of which lean towards new construction:

Quality of Construction

Safer neighborhood

Better floor plan

Lower maintenance costs

Architecture

Ability to Customize

11. Lack of good inventory

The existing home market inventory has dropped dramatically in the past 4-6 months and many reports out there is that there is not enough good homes available for sale. Add to that companies coming in and purchasing homes for rental usage and there is definitely a shortage in good listings. Agents have shifted back to taking listings and soliciting for properties to add to their inventory.

Sign up for 2013 NAHB Legislative Conference

Brad Boycks — Wed, 27 Mar 2013 14:00:33 +0000

NAHB is once again holding its annual legislative lobbying day in Washington D.C. this spring, the 2013 NAHB Legislative Conference on June 5, 2013.

This year the event will be held the Wednesday before the NAHB Spring Board meeting at the Marriott Wardman Park Hotel.

The event kicks off with an issue briefing and congressional speaker from 7:45 am to 9:00 am. After members are up to speed on NAHB legislative priorities, we will head to the U.S. Capitol to meet with as many members of the Wisconsin Congressional delegation as we are able to.

To learn more about the event and to sign up click here.