When it comes to risk mitigation for property investors, title insurance may be the best kept secret in the industry. While the concept of title insurance is well known and most investors understand the basic coverage offered by a title insurance policy, many don’t know about the optional – and valuable – coverage that may be available to them. Litigation over property rights occurs daily, and often the risk at issue could have been covered by title insurance.

Even if you haven’t purchased a title policy for your own benefit, if you have a mortgage, you have purchased title insurance for your lender. For even the simplest transactions with the smallest of real estate collateral, lenders routinely require specific endorsements to their title coverage. Clearly, banks and other financial institutions are on to something. So, what is it that your lenders know that you don’t?

Simply put: Lenders know to take advantage of any chance to minimize risk. They know that extended title insurance policies with appropriate endorsements may cost a bit more at closing (usually on buyer’s dime), but will save them money in the long run. From insuring that a building conforms to applicable zoning ordinances, to removing the arbitration provisions from the title policy itself, there are many ways that title endorsements can change a title policy. For instance, if you are buying an LLC in order to obtain a parcel of land, the prior owner’s knowledge of defects could be imputed to you as the new shareholder – even if you had no idea about the issue at hand. However, a non-imputation endorsement would prevent the title company from assigning that knowledge to you as a defense against your claims.

The American Land Title Association, (ALTA), is primarily responsible for creating forms of standard endorsements which states may choose to adopt. In Ohio, most endorsements available are ALTA form endorsements.   However, ALTA does not have a monopoly on title policies or endorsements in the United States. While ALTA is still the industry standard, many states have adopted their own endorsements. California, for example, issues California Land Title Associations (CLTA) endorsements in addition to ALTA endorsements. Of those states that have adopted ALTA endorsements, not all ALTA endorsements are available in each state (looking at you Florida), and some states don’t issue ALTA policies or endorsements at all (yes, of course it is Texas).

In whatever state you are in, endorsements can transform your title insurance coverage. For example, if there is an easement that runs through your property and the prior owner constructed a garage that encroaches into that easement, the easement and the encroachment would appear as exceptions to the title policy. However, you could still get coverage through endorsements over both the easement and the encroachment. With an ALTA 28.1 for instance, if the other party to the easement sued to force you to remove the garage, you could make a claim with the title company causing the title company to step in to defend you against the claim and, if their defense fails, to cover your damages.

Although title insurance is generally thought to be insuring over mistakes of the past, with certain title insurance endorsements, you can also insure the future of your property. If you are purchasing a vacant parcel of land with the express intent of building a multifamily apartment complex, there isn’t much to insure as there would be no potential encroachments, violations of restrictions or zoning issues at the time of purchase. However, if it is the future improvements that you would want to insure – you can, in fact, insure them. Through land under development endorsements, you can ensure that your planned improvement is in compliance with zoning ordinances, doesn’t violate any restrictions on record, and will not cause an encroachment (among other things) to avoid any unwanted surprises at the completion of your project. 

All investments come with a degree of uncertainty. Since 2020, real estate investments have become even more uncertain and volatile. Regardless of the security of the investor, walking away from the type of insurance offered by today’s title companies would be a mistake. Do yourself a favor: the next time you review a commitment to issue title insurance, ask what endorsements and additional coverage your insurer can provide to your project. It just may save you in the long run.  

February 2024, Properties Magazine, Pages 58-60

On January 26, 2024, the U.S. Department of Labor’s (“Department”) Office of Solicitor (“SOL”) published its FY2023 Enforcement Report (“Enforcement Report”). The report provides an insight into the Department’s labor and workplace safety initiatives and enforcement focus. The messaging in the Enforcement Report is consistent to what Hahn Loeser & Parks LLP has seen and been communicating to its clients for the past several years—the Department, under the current administration, is focusing on announcing enforcement goals and then compelling proactive compliance through enhanced enforcement measures. The 2022 National Emphasis Programs on Heat and Trenching are perfect examples of this approach.

In 2023, the Department’s enforcement priorities included: combating workplace retaliation, employee misclassification, child labor, and protecting immigrant and migrant workers. Of significance, the Enforcement Report also highlighted several OSHA cases demonstrating the increasing number of criminal referrals. The Department views criminal prosecution as an effective enforcement tool and believes the threat of criminal liability encourages increased compliance.

The Department’s Enforcement Toolkit in 2023 Included:

Corporate Veil Piercing

  • The SOL successfully pierced the corporate veil of a Maine contractor to hold its owner personally liable for $1.5 million in monetary penalties. The monetary penalties arose from the falling death of an employee. Prior to the fatality, the Contractor repeatedly failed to ensure the use of fall protection on its Projects. The Contractor’s prior violations and wanton disregard for employee safety allowed the SOL to pursue such action against an individual.

Criminal Referrals

  • The U.S. Attorney for the Southern District of New York charged a roofing contractor for willfully violating OSHA regulations following a criminal referral from OSHA and SOL. The New York roofing contractor had a history of willful OSHA violations following the death of two employees. The roofing contractor had received 24 willful OSHA citations between 2019 and 2023, including willful egregious fall protection citations in August 2022 and February 2023.
  • A Nebraska roofing contractor was held in criminal contempt for failure to appear at a hearing regarding the appropriate penalties and sanctions.
  • SOL assisted the U.S. Attorney’s Office of the Eastern District of Kentucky in a prosecution that successfully held a coal company and its dust examiner criminally liable for submitting false samples. The company was sentenced to two years of probation and to pay a $200,000 fine, and the certified dust examiner was sentenced to six months in prison followed by six months of home detention.

Increased Monetary Penalties

  • The Department reached a corporate-wide settlement agreement with Dollar Tree, which operates 16,000 Dollar Tree and Family Dollar stores across 48 states. The settlement required the payment of $1.35 million in penalties and put in place measures to ensure prompt abatement of safety hazards that included blocked exists and access to fire safety.

Looking Forward in 2024

We forecast that in 2024, the Department will continue its recent trend of announcing its enforcement focus and then compelling compliance through increased inspections, citations, assessment of monetary penalties, and criminal liability.

Areas of Focus:

  • Continued protection of “vulnerable workers”;
  • Continued enforcement of specific standards such as Trenching, and Fall Protection; and
  • Continued use of the General Duty Clause as it relates to Heat.

These enforcement trends are likely to continue throughout 2024 but could change depending on the results of the 2024 Presidential Election. As we’ve seen, the Department’s strategy and focuses depend largely on the interests of the presidential administration.


A single OSHA investigation can lead to expensive fines, loss of productivity, a damaged reputation, and even criminal liability. Therefore, employers must be cognizant of not only their own employment practices and workforce details, but also the actions of their subcontractors and even sub-subcontractors.

If you have any questions about OSHA compliance, please call or email Hahn Loeser’s Construction and OSHA Team.

Full Article in Properties Magazine

At the most basic level, contracts serve to assign, allocate, and mitigate risk. Parties—unsurprisingly—are typically unwilling to adopt greater risk than required, and often look to assign most of the risk to the other contracting party. While understandable, this approach may have unintended costs.

For the most part, the general risks associated with a construction project are commonly understood and accounted for in broad form provisions. Such provisions alone, however, may not effectively address the unique risks associated with the rise in material escalation, volatile supply chains, increased labor demand, and skilled labor shortages. In turn, disputes related to the foregoing procurement and delivery issues are on the rise.  Even when resolved, contractors and owners alike have been equally dissatisfied.

It is unreasonable to believe that all risk can be identified and assigned from the outset. However, including provisions that require proactive planning, early procurement meetings, and early deliverables may mitigate the chances of procurement issues, and certainly reduce the negative impact should they arise. The risk of the unknown does not have to be solely allocated to one party or another. Encouraging a project centric approach, obligating all parties to engage and share risk, will benefit all parties who choose to adopt such a perspective. Below are some early planning and procurement procedures/concepts that can easily be incorporated into contract terms and/or early engagement project activities.

What can Owners and their Design Teams / Consultants consider doing?

  • Foster early engagement – find a way to create a true collaborative partnership between all members of the team as early as possible:
    • This could be driven by the type of project, but is important to have ALL team members involved as early as possible, including early engagement of the construction team; and
    • For scenarios or projects where the owner is hesitant to engage team members too early for potentially losing pricing competitiveness, there are various ways for an owner to maintain cost confidence from the whole team throughout the entire process.
  • Understand the environment – look for multiple options and rely on input from all team members throughout the process:
    • Establish an environment with open communication being a critical focus piece;
    • Avoid playing the “blame game” and be understanding when difficult news is communicated to encourage continued open and transparent flow of information in real time from all parties; and
    • When soliciting for proposal requests or bids, encourage real-time feedback from contractors, subcontractors, and their material vendors.
  • Be flexible and understanding – be ready for and open to potential alternative options for final product selections:
    • Encourage a streamlined substitution process – perhaps even cater to the project and work ahead with the Design Team / Consultants so decisions can move efficiently and effectively;
    • Wherever possible, avoid sole-source manufacturers or closed-spec materials. Limiting available options in current market conditions can be a recipe for disaster; and
    • If a change is necessary, seek diligent back-up documentation so that decisions can be made quickly with reliable and appropriate information.

What can Contractors consider doing?

  • Encourage open and often communication from the outset, and continue through the entire project;
  • Offer current-trending material procurement information during the bidding process;
  • Create options for team members to evaluate – both time driven and product driven;
  • Provide potential temporary solutions that offer workarounds to achieve substantial completion with minimal, non-intrusive come-back work;
  • Include detailed assumptions and clarifications – part of winning the work is showing the commitment of your team up front, so be sure to include information to help the Owner make a selection, knowing you are the right add to the team; and
  • Evaluate if and potentially recommend that a project would benefit from lower-tier design-assist involvement for an even stronger finger on the pulse of the current market.

Working collaboratively across all disciplines from the early project development phases all the way through substantial completion will help to flush out issues driven by product availability.  It will also help to encourage alternative solutions, whether its flexibility in various materials, multiple design options for specific elements, or temporary construction solutions until those selected materials are available for final installation. 

Many organizations and projects have already adopted early strategy sessions to overcome these and other types of project issues.  With the ultimate goal in mind of mitigating risk across all interested parties, it is important to memorialize the outcome of those sessions.  For instance, consider incorporating agreed upon strategies with an amendment to the contract or a no-cost change order.   The real key is nothing new.  It goes back to what is at the core – teamwork, communication, planning, and execution.  Encouraging this throughout the entire project will create and foster an environment for overall project success with the entire team.

Full Article in Properties Magazine

Allocating the Risks and Benefits of Green Construction

Sustainable (or “green”) construction practices and the trend toward green buildings are here to stay, driven not only by federal, state, and local legislation, tax credits, and incentives, but also by consumer, corporate, and shareholder demand.  If they haven’t already, owners, architects, developers, and construction companies will be required to make use of new technologies, new materials, and new practices to keep pace with increasing demand for green construction – and to reap the economic and reputational benefits of green construction.  It is estimated that residential and commercial buildings account for approximately 40% of U.S. carbon dioxide emissions, and that figure does not include other building-related emissions, such as those from the manufacture, transport, and assembly of building materials such as wood, concrete, and steel. 

Simply put, climate change strategies must and will continue to involve finding ways to reward green construction practices and green buildings and discourage or penalize environmentally inefficient practices and features

A variety of incentives are already in place to encourage green construction, such as tax credits and carbon offsets.  Who receives the benefits of these types of incentives is a matter that often can – and will – be subject to contract negotiation.  Similarly, certain types of risks that are common to all construction contracts may be increased when certain standards are required, or when new materials or practices are being used. 

Risk and reward travel together.  It is critical, therefore, when dealing with all these new and continually evolving issues, to make sure you carefully consider and negotiate your construction contracts to ensure that the risks and benefits of green construction are properly allocated amongst the parties.

  • Who gets the incentives?

At the federal level, billions of dollars in incentives are being made available to encourage and reward projects and buildings that meet recognized green building standards.  For example, the Inflation Reduction Act of 2022 created new tax incentives for energy efficiency and clean energy investments for both residential and commercial buildings.  It also made available tens of billions of dollars in grants, rebates, and various forms of financing. 

Other programs allow the purchase of carbon credits or offsets to permit companies to exceed otherwise applicable caps on carbon dioxide emissions.  And the incentives to go green do not stop with the federal programs.  An array of incentives are being offered at state and local levels. And the positive publicity that comes with meeting green building standards continues to increase.  

This wide array of incentives and benefits raises the issue of who gets to claim them, particularly where, as in the case of carbon offsets, the benefits can be bought and sold, or otherwise allocated by contract.  Carefully considering who should get the benefit of a subsidy, offset, or other benefit is both a matter that requires an understanding of the applicable law and regulations, and should, where more than one party to a transaction might claim a right to the benefit, be clearly spelled out during the contracting process.

  • Be mindful of the supply chain.

One lesson learned from the COVID-19 pandemic, the invasion of Ukraine, and ongoing instability in the United States’ relationship with China, is that allocating the risk of cost and availability of building materials is of paramount concern.  This point is particularly relevant for green construction, where domestic production may not presently be able to meet the supply demands. 

Solar panels are a prime example.  China controls more than 80% of the solar panel supply chain, and while there is much discussion about increasing production in the U.S., current domestic production simply cannot keep up with demand.  This can result in limited supply, and at times, gridlock, like those experienced recently in connection with the implementation of the Uyghur Forced Labor Protection Act (UFLPA), banning the importation of goods made with forced labor.

The problems that supply chain issues can cause are well known and cannot be ignored when entering into construction contracts.  Who bears the risk of delays, unforeseen circumstances, and price escalation, must be carefully negotiated with an understanding of the particular materials and technologies that must be used to complete a project.  Failing to plan is planning to fail when it comes to supply chain instability.

  • Defining the scope and reach of certifications and warranties.

Supply chain concerns may be further complicated if a contract requires a building to meet certain certification standards.  Examples of common certification standards applicable to construction projects and building products include Energy Star certification (appliances), FSC Certification (lumber), GreenGuard Certification (building products and indoor fixtures), and GreenSeal Certification (building products and materials).  Procuring building materials that meet specified certification requirements, and ensuring that a structure is designed to satisfy certification standards, requires careful coordination and planning amongst all parties to a construction project.

Additionally, all parties to a construction contract need to carefully review the warranties being offered, or demanded, before signing a contract.  For green construction, that may include defining – and understanding – the scope of the warranties for new and emerging technologies.  It is critical to define the consequences of breaching a warranty, what actions will void a warranty, which party has the right to enforce the warranty, and the consequences if a warrantee attempts to self-repair. 

* * *

These are just a few examples of issues to consider when entering into contracts for green construction. The key point is that when implementing new technologies, new practices, and new standards, it is important to carefully review your contracts and make sure that the terms of your standard forms account for the risks and rewards of green construction.  Good contracting practices do not stop with good forms, however, so it is also important that those who are responsible for negotiating and implementing your contracts are trained and understand how to use and when to revise those forms to meet the particular needs and demands of each project. 

On August 1, 2023, U.S. Citizenship and Immigration Services (USCIS) released a revised Employment Eligibility Verification form, commonly referred to as the I-9 form. To download a copy of the new I-9 form click here. While the new I-9 form may be used immediately, employers have until October 31st to implement changes necessary for the use of the new I-9 form. After October 31, 2023, employers who fail to use the new I-9 form will be subject to penalties enforced by U.S. Immigration and Customs Enforcement and the Department of Justice. Employers should not ask current employees who have a properly completed I-9 form on file to complete the new I-9 form.

Changes to the I-9 form make the form much more user friendly. Immediately noticeable is that Section 1, completed by the employee, and Section 2, completed by the employer, have been reduced to a single sheet. The Preparer and/or Translator Certification now appears on a separate Supplement A that employers can use when necessary. Similarly, Reverification and Rehire, formerly Section 3, appears on a separate Supplement B that employers can use when necessary. Separating the Preparer and/or Translator Certification and Reverification and Rehire from Sections 1 and Section 2 should significantly reduce unnecessary completion and stray marks and signatures.

Also, with the new I-9 form, fields may be left blank when they do not apply or are not appropriate. This includes in Section 1, for which employers are subject to fines for failing to ensure that an employee entered “N/A” in an inapplicable Section 1 field on prior versions of the I-9 form. Another helpful revision is the identification on the Lists of Acceptable Documents page of acceptable receipts which may be presented in lieu of certain documents for a temporary period.

In addition to the release of a new I-9 form, USCIS announced a final rule permitting an optional alternative procedure to the physical examination of documents presented by employees to establish their identity and employment authorization. Starting August 1, 2023, employers who are participants in good standing in E-Verify have the option of conducting a “remote” review of an employee’s documents. The “remote” review procedure requires that employers (or a third party on the employer’s behalf):

  • Examine the front and back of the document(s) (one document from List A or one document from both List B and List C) transmitted by the employee to ensure that the document(s) presented reasonably appears to be genuine;
  • Conduct a live video interaction with the employee, who presents during the live video interaction the same document(s) they transmitted to ensure that the document(s) relates to the employee;
  • Indicate on the I-9 form by completing the corresponding box that an alternative procedure was used to examine the document(s). This is done by marking the checkbox found under Additional Information in Section 2 on the new I-9 form and by writing “Alternative Procedure” in the Additional Information field on the existing I-9 form (issuance date of October 21, 2019); and
  • Retain a clear and legible copy of the document(s) submitted by the employee (front and back sides if the document is two-sided).

Employers who are participants in good standing in E-Verify may, but are not required to, use this alternative document review procedure; however, if an E-Verify employer chooses to offer the alternative procedure to some employees at a hiring site, it must do so for all employees at that site.

USCIS previously announced that employers who performed a remote examination of an employee’s document(s) under the COVID-19 flexibilities between March 20, 2020 and July 31, 2023, are required to physically examine the employee’s I-9 documents in the employee’s physical presence no later than August 31, 2023. With the announcement of the final rule, employers enrolled in E-Verify are not required to complete the physical examination if they (1) were enrolled in E-Verify at the time they performed the remote examination; (2) created an E-Verify case for that employee (except for reverification); and (3) performed the remote examination between March 20, 2022 and July 31, 2023. Employers who conducted remote examinations under the COVID-19 flexibilities and who do not meet these requirements must complete the physical examination of I-9 documents (and notate the I-9 form accordingly) no later than August 30, 2023, as previously announced.

If you have questions regarding your I-9 form obligations, please contact a member of Hahn Loeser’s Labor and Employment Practice Group.

Under Ohio’s Prompt Pay Act, a general contractor could end up paying more for the subcontractor’s attorneys’ fees than the general contractor owed to the subcontractor. That was the ruling by the Ohio appellate court in Atlas Piers NEO v. Summit Construction Co., Inc., 2021-Ohio-2024 (9th Dist.). In Atlas Piers, the general contractor hired a subcontractor to provide “services that help stabilize buildings constructed in poor soil conditions.” Id. at ¶ 2. In particular, the subcontractor installed helical screws and piers in a series of buildings to be built for the Akron Metropolitan Housing Authority. Id.

A dispute later arose regarding the piers and the subcontractor’s work on the piers. The subcontractor sought a change order for work that the general contractor instructed the subcontractor to perform. But the general contractor refused to issue a change order because “it believed one was not necessary.” Id. at ¶ 9. When the subcontractor refused to act without a change order, the general contractor terminated the subcontract.

The subcontractor then filed a lawsuit against the contractor, seeking “money for lost time, extra work performed, lost profits, and” retainage that had not been paid by the contractor. Id. at ¶ 10. The subcontractor also sought damages and attorneys’ fees under Ohio’s Prompt Pay Act because the general contractor “failed to timely pay” the subcontractor in violation of Ohio Rev. Code § 4113.61. Id. at ¶ 11. Following a bench trial, the trial court found that the contractor owed the subcontractor approximately $20,000, plus 18% interest, as well as attorneys’ fees. Id. at ¶12.

Next, the court held a hearing to determine the amount of attorneys’ fees that should be awarded to the subcontractor. The court rejected the contractor’s arguments that the subcontractor “failed to satisfy the factors in the” Prompt Pay Act and that the subcontractor should only recover fees relating to the Prompt Pay Act claim. All told, the court awarded the subcontractor $64,974.88 in attorneys’ fees—more than three times the amount owed to the subcontractor.

On appeal, the contractor raised several arguments in an attempt to throw out the attorneys’ fees award. But the appellate court rejected each of those arguments. In particular, the court disagreed with the contractor’s argument that the attorneys’ fees award was “disproportionate and unreasonable in light of the sum recovered by” the subcontractor. Id. at ¶ 34. The appellate court explained that “[n]othing in the statute . . . indicate[s] that it is per se unreasonable for an award of attorney fees to substantially exceed the funds recovered by the prevailing party. While it is true that [the subcontractor] did not recover a large proportion of the money it sought, it was nonetheless successful in its litigation.” Id.

The Moral of the Story

Attorneys’ fees could make a Prompt Pay Act claim much more costly for a contractor. Those fees could greatly exceed the actual amount owed to the subcontractor. Plus, courts could assess those fees even when the subcontractor does not recover the total amount that it claims that it is owed. Therefore, contractors should pay particular attention to Prompt Pay Act claims made by their subcontractors and consider the potential award of attorneys’ fees in evaluating those claims.

Are you a contractor that would like to employ 16 or 17-year-olds (“minors”)? House Bill 33 (establishing the state budget for 2023-25) permits minors to work on construction sites in certain limited situations.

Note! There is nothing in the new law that requires contractors to hire minors – or to engage subcontractors who hire minors – to work on construction sites; the bill only prohibits the Director of Commerce from passing any rule that would prohibit minors from working on construction sites in certain situations. Owners and contractors that do not wish to have minors on the jobsite should explicitly state their desires in the contract/subcontract.

Employer Responsibilities
What does the new law mean to those who wish to employ minors on construction sites? Legally, minors can be employed on certain construction sites if they meet certain criteria relating to
(1) Age requirement
(2) Enrolment in a mentoring program in compliance with Ohio’s labor laws
(3) Compliance with the Fair Labor Standards Act (“FLSA”)

First, minors may be employed on construction sites provided they are at least 16 years old.

Second, minors may be employed on construction sites so long as they are employed under the Ohio construction mentorship program. Among other requirements, the program requires the employment duration be defined, a mentor be assigned to the minor, and the minor be given specific training. 

Third, minors may be employed on construction sites so long as they are performing tasks that either (a) are permissible under the FLSA, or (b) fall into an exemption. For the minor to qualify for the exemption they must be enrolled in an approved program.

For example, listed below are two jobs the Department of Labor has deemed to be dangerous and has prohibited minors from performing under the FLSA.  However, a minor may perform these tasks if the minor falls into an exemption by virtue of being either a student-learner or apprentice, including being employed under the Ohio construction mentorship program.

(1) Roofing operations and work performed on or about a roof—bans most jobs in roofing operations, including work performed on the ground and removal of the old roof, and all work on or about a roof.
(2) Trenching and excavation operations—bans most jobs in trenching and excavation work, including working in a trench more than four feet deep.

A company’s employment of minors through the Ohio construction mentorship program creates an opportunity to boost minors’ interest in construction and train the next generation of skilled labor. To determine if your policies are in compliance with the new law, please reach out to Hahn Loeser & Parks LLP.

Original article in June 2023 issue of Properties Magazine

According to the Pew Research Center, the majority of Americans view climate change as a major threat and two-thirds believe that the government and corporations should be doing more to address climate change. Young Americans, in particular, are interested in curbing their carbon footprint and living sustainably. A 2022 Bentley-Gallup Force for Good study found that it is “extremely important” to 77% percent of Americans aged 18-29, that businesses operate in a sustainable manner. Moreover, 80% of young Americans say they are willing to pay more for sustainable products than less sustainable competitors, according to the Business of Sustainability Index by Greenprint. Can this translate into premium rent and an increased construction price for “sustainable” new housing? 

The number of renters in this demographic will continue to grow over the next decade. After renting, many will become future homebuyers, so, setting aside any political argument over the importance of reducing emissions, there may be a financial incentive to develop green and sustainable housing. Simply put, according to the research, sustainability sells, and there are many ways that property developers can start making their properties more sustainable, and receive return on their sustainability investment, beyond just the savings achieved by reduced utilities or tax credits.

The LEED Program

Fortunately, there are programs like Leadership in Energy and Environmental Design (LEED) available that provide guidance and certification to those wishing to make their existing or future buildings green and sustainable. The LEED program relates to all aspects of real property development, from roofing to landscaping. It is a way to confirm sustainability credentials to the marketplace. Additionally, there are methods outside of LEED to make your property more sustainable and therefore more marketable to those who make choices based on environmental issues. A self-sustaining project, which only uses the energy it creates, water it captures (and recycled grey water), and as much heat from the ground as possible, is the future goal and vision, but intermediate steps can be taken now. Reducing or eliminating dependence on outside electricity providers is slowly maturing with the use of solar power in sunny climates. However, solar alone may be inadequate, considering the late afternoon need for air conditioning and electric car owners plugging in after work, necessitating battery storage as part of any solar system. Many Americans have already adopted solar power in some capacity, including solar outdoor lighting or solar panel powered security cameras. The technology is readily available, and solar panels are becoming more efficient, less expensive, and easier to obtain. Governments may continue to subsidize and encourage solar energy. While solar power is a great start to sustainability and an amazing selling point, there are several other areas that consumers will look to when evaluating a building for sustainability.

For existing structures, updating landscaping to a more environmentally friendly model can be an easy way to make the property more sustainable. There is currently a controversial “anti-lawn” movement, and even the City of Cleveland Heights adopted a “no-mow-May” policy to encourage pollinating insects. On TikTok, the hashtag #anti-lawn has 2.3 million views and #antilawn movement has 1.9 million views. Devotees claim that grass lawns are horrible for the environment. Sustainability influencers on social media promote alternatives to grass including micro clover, moss, and creeping groundcover plants. Other social media influencers advocate allowing their property to return to a natural prairie like state or landscape using only native pollinator plants. These changes are relatively inexpensive, but can send an immediate message to potential customers as the media focuses on the impact landscaping has on overall sustainability. Customers may consider initial landscaping and maintenance of the same in their purchasing decisions. Replacing grass and other high maintenance and non-native plants with more sustainable options, or even with space for community gardening for multi-family uses, can make your property more attractive to certain consumers.

Going Forward

There is no singular path to sustainability and the definition will evolve with time, technology and cost. Additionally, significant barriers still exist including limited sun for solar panels in Ohio, and many local zoning codes that restrict solar panels (if only for aesthetic reasons). The Ohio General Assembly is trying to reduce solar resistance, including the signing of Senate Bill 61, which prevents homeowners associations from banning solar panels. Municipalities will also need to reconsider regulations on external appearance of residential and commercial properties. Zoning codes that require front lawns of manicured grass may need to be left in the past.

Original article in April, 2023 Properties Magazine

Stakeholders in the construction industry are managing the increasingly complex and costly challenges associated with major projects, facilities, skilled labor forces, suppliers, and real estate.

The acceleration of public infrastructure projects, together with other government manufacturing initiatives throughout the Midwest, is creating healthy demand — and exerting some longstanding pressures — on the construction industry in Ohio.

Skilled labor shortages, supply chain difficulties, and shortages of certain raw materials continue to create significant project challenges and threaten long-term productivity of the industry.

Against this challenging backdrop, sweeping construction projects are underway in Ohio. Two of the biggest employers in Northeast Ohio plan major investments — the Cleveland Clinic (63,190 full-time employees worldwide) and the Sherwin-Williams Company (57,231 full-time employees worldwide).

In May 2022, the Cleveland Clinic announced a $1.3 billion capital investment in its main campus. Projects include a 1 million-square-foot Neurological Institute building, expansion of the Cole Eye Institute building, and significant growth of research facilities by way of the Clinic’s $300 million investment in the Cleveland Innovation District (a collaboration with universities and other hospitals to create jobs and an educated workforce). Also on the drawing board: adding a 400,000square-foot research center to position Northeast Ohio at the forefront of the pathogen research vital to preparing for the next pandemic.

The Clinic also is collaborating with community partners to bring a $52.8 million Meijer grocery market and apartment complex aimed at lessening food insecurity and revitalizing its surrounding neighborhood.

Sherwin-Williams is building a new headquarters tower in downtown Cleveland, with an attached multi-level garage, as well as a research and development center in the suburb of Brecksville.

The 36-floor headquarters will house more than 4,500 employees — professional staff, engineers, technicians, and chemists — with room to accommodate future growth. Sherwin-Williams says the project will entail a minimum investment of $600 million over the next few years.

Major projects are making headlines elsewhere in Ohio, as well. Intel plans to spend $20 billion on two advanced chip factories in Licking County, just outside Columbus. The project is the largest single private-sector investment in Ohio’s history. It’s expected to create 3,000 Intel jobs and 7,000 construction jobs over the course of the build. The nearly 1,000-acre site has room for approximately eight chip factories. If it reaches full capacity, the investment could grow to as much as $100 billion over the next decade, making it one of the largest semiconductor manufacturing sites in the world.

The J.M. Smucker Co., a leading food manufacturer headquartered in Northeast Ohio, plans a 29,000square-foot research and development lab at its campus in Orville. Abbott selected a site in Bowling Green for a new manufacturing plant for nutritional products. And the clinical research company, Medpace, plans a $150 million operations and office expansion at its Cincinnati headquarters.

Automakers, meanwhile, are doubling down on Ohio in anticipation of an electric vehicle future. Ford Motor Co. is planning a massive expansion to make electric vehicles at its Ohio assembly plant in Lorain County. The $1.5 billion project is expected to add 1,800 jobs, twice the plant’s current workforce. General Motors plans a $760 million investment in its Toledo transmissions plant as it gets the facility ready to manufacture drive units for GM- EV trucks. Honda is building a $3.5 billion joint-venture electric vehicle battery factory at a site in Fayette County.

The Bipartisan Infrastructure Law, signed in late 2021, has identified over 150 specific Ohio projects for funding. Across the state, there are 1,377 bridges and over 4,925 miles of highway in poor condition. Ohio is set to receive more than $4.3 billion to invest in roads, bridges, public transit, ports, and airports, and over $240 million for clean water projects.

As more projects are announced in coming months, the federal investment in Ohio roads and bridges is projected to ramp up to $9.8 billion. Ohio also is in line for a minimum of $100 million to help ensure high-speed internet coverage across the state. And more than $131 million was allocated to Ohio in 2022 for pollution cleanup, such as capping orphaned oil and gas wells and reclaiming abandoned mine sites.

Going forward, the jury is out with respect to the extent to which an uncertain economy and high interest rates will impact the more ambitious project plans in Ohio, especially in the private sector.

Government funding from the Bipartisan Infrastructure Law, the Chips and Science Act and the Inflation Reduction Act, however, will likely keep the construction industry in Ohio on steady ground for now.

When reviewing a contract, how often have you had the following thoughts: “That provision is so one-sided, there’s no way it will be enforced the way it’s written!” Or “I won’t worry about negotiating that provision; a court would never enforce it as written.”

A recent decision from Ohio’s Tenth District Court of Appeals illustrates the risks of that kind of thinking.  The procedural history of the dispute is complex, but worth digesting for one important reminder: it’s always better to negotiate troublesome provisions yourself rather than counting on a judge or arbitrator to do it for you in the future


In Cleveland Construction, Inc. v. Ruscilli Construction Co., Inc., 10th Dist. Franklin No. 18AP-480 and 21AP-375, 2023-Ohio-363, the Tenth District confronted a long-running construction dispute between a general contractor and its subcontractor. For ease of reference, we’ll call them GC and Subcontractor. The subcontract at issue contained an indemnification provision that stated, in relevant part, that Subcontractor would “indemnify and hold harmless [GC] from any against claims, damages, losses and expenses, including but not limited to its actual attorneys’ fees incurred, arising out of or resulting from performance of” the subcontract.  Id. at ¶ 23 (emphasis added). The provision further stated: “This indemnity shall include, but not be limited to, the following: . . . The prosecution of any claim by [GC] against [Subcontractor] or any of its subcontractors or suppliers for breach of contract, negligence or defective work [or] . . . The defense of any claim asserted by [Subcontractor] against [GC] whether for additional compensation, breach of contract, negligence, or any other cause.”  Id. (emphasis added).

Stated plainly: Subcontractor agreed that if it ever brought a claim against GC, or GC brought a claim against Subcontractor, Subcontractor would pay all of GC’s attorneys’ fees. Surely no court or arbitrator would ever enforce such a provision, right? Well, dear reader, do you think you’d be reading this article right now if that were the case?

Various disputes arose between the parties and the case was ultimately tried to a three-member arbitration panel. GC asserted claims against Subcontractor for over $900,000 in damages resulting from Subcontractor’s alleged breach of contract, while Subcontractor asserted various counterclaims totalling just under $1.4 million. Of particular note, both sides requested an award of attorneys’ fees. 

The arbitration panel ultimately determined that Subcontractor was entitled to an award of just over $100,000 on its claims but was not entitled to an award of attorney fees. However, the panel determined that GC was entitled to such an award. Relying on the indemnification language quoted above, the panel reasoned that “[t]he Parties are two sophisticated commercial entities that entered into a negotiated, lengthy Subcontract agreement that included several specific provisions that shifted the risk of [GC’s] attorneys’ fees and costs onto [Subcontractor] in any dispute between the parties.” (Emphasis added.) Interestingly, while the indemnification provision provided for fee-shifting in GC’s favor for both prosecuting and defending claims, the panel’s award specifically cited only the provision for prosecuting claims. Accordingly, the panel directed GC to submit a petition for fees. GC submitted a total of $837,387 in attorneys’ fees, expert fees, and related costs, of which the panel awarded $624,087.45 to GC.  After several years of further post-arbitration proceedings which are too complex to summarize here, GC was awarded an additional $86,805.96 by a magistrate judge. 

Both the arbitration panel and the magistrate judge’s rulings were ultimately upheld by the Tenth District. Despite Subcontractor’s insistence that the post-arbitration attorneys’ fees did not “arise out of or result from performance of the Subcontract,” the court did not agree that the provision was limited to fees incurred in the arbitration proceedings themselves.  Id. at ¶ 26.  The court also relied on the broad phrasing of the provision that Subcontractor’s indemnity obligations “shall include, but not be limited to,” the listed categories. Id. at ¶ 27. The net result? Subcontractor was awarded just over $100,000 on its claims but ordered to pay over $700,000 in GC’s attorney fees


While the history of the case is convoluted, one thing is clear: Subcontractor certainly wishes it had negotiated to remove—or at least put limitations on—the troublesome indemnification provision in the subcontract. What can a party do if it is confronted with an indemnification provision similar to the one in the GC-Subcontractor subcontract? There are several options. Most obvious would be to remove an obligation for either party to pay the other’s attorneys’ fees in any claims brought by one party directly against the other, but that is not always feasible. As a compromise, the obligation to cover attorneys’ fees could be limited in various ways.  For instance, the obligation could be limited to paying attorneys’ fees incurred in defending claims that are ultimately determined to be frivolous, or if the other party prevails on more of the claims than the claimant does.  Certainly, a common and reasonable compromise in any fee-shifting provision is to limit the obligation to “reasonable” attorneys’ fees, as opposed to any and all “actual” fees.  Subcontractor was fortunate that the arbitrators only awarded GC its reasonable fees, despite the subcontract’s allowance for actual fees. 

Above all, parties should remember that even if a provision seems unfair, unreasonable, or perhaps even unenforceable, there is always a risk that a judge or arbitrator will enforce it as written.  This is especially true for sophisticated players (such as Subcontractor and GC in this case), who may or may not be represented by in-house or outside counsel in the contract negotiation process. It is always better to confront such provisions head-on, rather than simply hoping they will not be an issue in the future or that a merciful judge or arbitrator will not enforce them as written. No one wants to find themselves in the situation of Subcontractor: winning the battle (at least in part) but paying the other party for the privilege of doing so.