Construction updates

Albania

Regulating direct claims against construction contractors and principals
  • Albania
  • 06 February 2012

Under Albanian law, a construction contractor is solely responsible for its commercial liabilities towards third parties (ie, its subcontractors). However, in certain circumstances, the contractor's employees or subcontractors which are engaged in the performance of works or services for the benefit of the principal may make direct claims to the principal for the payment of moneys.

Construction tax is finally repealed
  • Albania
  • 07 November 2011

The Law on Local Taxes, one of two laws providing for construction-related taxes in Albania, has now been abolished – although it is not yet clear whether this is a planned tax reduction for construction-related activities or simply an administrative oversight. Either way, developers should consider whether they can accelerate procedures for obtaining construction permits and thus benefit from the reduction.

Local taxes for new construction projects
  • Albania
  • 18 July 2011

Before obtaining a construction permit, applicants must pay the local authority a tax equal to 1% of the value of the investment for the project. These funds are used to finance urban studies by the local government. However, under new Law 10119/2009 - which has yet to come into force - this tax will be repealed.


Australia

Victoria Out of Step Following Amendments to Security of Payment Act
  • Australia
  • 21 May 2007

The long-awaited amendments to the Building and Construction Industry Security of Payment Act 2002 have come into force in Victoria in respect of construction contracts entered into on or after March 30 2007. Many of the changes make the act unique in Australia and very different from the construction industry payment legislation in other states.

Ban from Tendering for Government Work Following Code Breaches
  • Australia
  • 19 February 2007

The recent bans imposed on contractors preventing them from tendering for federal government-funded construction projects serve as a reminder of the importance of complying with the National Code of Practice for the Construction Industry. Three companies were precluded from tendering for government work for three months following a breach of the principle of competitive behaviour.

Court Further Supports Peninsula Balmain Principle for Time Extensions
  • Australia
  • 22 January 2007

The Victorian Supreme Court has given further support to superintendents and contract administrators granting an extension of time under Australian Standards 2124 and 4300 when they decide it is just and equitable to do so, even if the extension of time claim would otherwise be time barred.

Latent Conditions Claims and the Trade Practices Act
  • Australia
  • 18 December 2006

A recent decision demonstrates how a latent conditions claim can be pursued successfully by the contractor against the principal under the Trade Practices Act. It also highlights the broad nature of potential relief for contractors and liability for principals under Sections 82 and 87 of the act.

New Building Act: Can it Weather the Storm?
  • Australia
  • 13 November 2006

The Queensland government has implemented the Queensland Building and Other Legislation Amendment Act 2006. The act amends the Building Act 1975, consolidating provisions set out in various pieces of legislation to establish a framework for the process of making, assessing and ruling on a building application through to the certification of building work.


Belgium

Fire Safety Rules for New Industrial Buildings
  • Belgium
  • 06 October 2008

Belgium has no comprehensive framework of rules to ensure that minimum fire safety standards are observed in the construction of industrial buildings. A three-tier classification system, expected to come into force in 2009, will set basic requirements for new buildings and certain extensions, but is expected to lead to a rise in construction costs.

Insurance Rules Leave Architects and Clients Better Protected
  • Belgium
  • 09 June 2008

Reformed rules for Belgian architects give them greater equality in respect of their European counterparts and the other parties to a building project by allowing them to take out professional liability insurance through their company. In addition, the rules ensure better protection for principals by imposing mandatory insurance coverage for architects.


Canada

Ontario Court of Appeal Rules in Kennedy Electric Case
  • Canada
  • 22 October 2007

The Ontario Court of Appeals recently released its judgment in the Kennedy Electric Case. The decision is expected to give rise to debate over the extent to which the supply of certain types of machinery, assembly line and process equipment is lienable.

Duty of Fairness Revisited: The Double N Earthmovers Case
  • Canada
  • 13 August 2007

In any construction tendering process a balance must be struck between ensuring that the process is competitive and yet remains fair to all participating parties. In a recent decision regarding the tendering process, the courts were once again called upon to examine the fairness of the construction tendering process.

The Clock Is Ticking: New Statutory Limitation Periods in Ontario
  • Canada
  • 18 June 2007

Latent defects or deficiencies in buildings may be discovered long after the construction project is complete, thereby potentially exposing parties to indefinite liability. However, the Limitations Act 2002 sets out a new legislative regime, under which a party must commence a lawsuit within 15 years of the act or omission, regardless of when the negligence was discovered.

Impact of Design-Build Projects on Contract Interpretation
  • Canada
  • 11 December 2006

Within the construction industry there is always a potential tension between a general contractor and a subcontractor regarding the scope of work for which the subcontractor is responsible. If the parties to a contract are unable to resolve a conflict over one party's scope of work, the courts may be called upon to interpret and make the final decision regarding the parameters of a contract.

Potential Liability to Non-contracting Parties in Design-Build Tender
  • Canada
  • 11 September 2006

As the trend towards design-build construction projects continues, questions are being raised regarding the ability of members of a design-build team to make claims against the owner in respect of the owner's actions during the tender stage. The Federal Court of Canada recently reviewed the owner's duties to a design-build team when the owner fails to award the tender to the lowest compliant bidder.


China

Rules for Foreign-Invested Construction Engineering Design Enterprises
  • China
  • 19 March 2007

The Ministry of Construction and Ministry of Commerce have issued the Implementation Rules to the Administrative Regulations on Foreign-Invested Construction Engineering Design Enterprises. The rules relax the requirements on foreign service providers' qualifications under the Administrative Regulations on Foreign Invested Construction Engineering Design Enterprises.

Non-payment of Contractors
  • China
  • 22 May 2006

The problem of non-payment of contractors has long plagued China's construction industry. Owners often start construction work on a project before they have sufficient funds to ensure its completion; contractors in a fiercely competitive market often have no choice but to agree to fund the construction of the project, even though they may have no guarantee of payment once the project is completed.