Governor Signs Lien Law Bill Benefiting Construction Industry
The construction industry received great news when Governor Reynolds signed SF2229 into law, repealing the so-called “anti-collateral” statute that disallowed mechanic's liens in instances where material suppliers and others utilized personal guarantees and other forms of collateral.
This repeal is most impactful to material suppliers, from cabinet and flooring suppliers to lumberyards and larger building material suppliers, in the residential and commercial construction industry.
Construction attorney Jodie McDougal has been personally working on this issue for several years, including researching the “anti-collateral” provision of Iowa's Mechanic's Lien Statute (Iowa Code § 572.3), providing education to industry associations and leaders about the problematic aspects of the current statute (see white paper), as well as advocating for a repeal of the statute with Iowa legislators. The bill was passed by the legislature and Governor Reynolds signed the bill into law on April 10. It will take effect on July 1, 2018.
The anti-collateral provision was written into Iowa Code over 175 years ago, in 1851. The effect of the law was that claimants were not entitled to a mechanic's lien if the claimant's construction contract, or credit application, with the owner or general contractor, contained a provision providing for some type of collateral or was otherwise secured by collateral (such as a promissory note, personal guaranty, or other asset).
Because this was a relatively obscure part of the law, material suppliers and others in the construction industry were unknowingly losing their mechanic's lien rights due to this anti-collateral provision. When Jodie recognized the detrimental impact on her clients in the construction industry, she got to work on changing the law. Indeed, the initial rationales for the law in the 1800's were no longer applicable, and the law was not otherwise justifiable under modern public policy rationales and considering the extreme impact on unknowing contractors and subcontractors, thereby justifying its repeal. With the repeal of this anti-collateral provision, Iowa law now matches that of all surrounding states and the vast majority of states nationwide. Contact Jodie McDougal with further questions.
Association Health Plans – Now What?
We're excited that on April 2, Gov. Kim Reynolds signed legislation that will allow small employers to form association health plans, in an effort to provide new options for lower-cost coverage with fewer mandates. The Business Record had an excellent article about what it might mean for our members.
Here's a little preview and then you can read the complete article by clicking here:
Now that the Iowa Legislature and the Trump administration have enacted measures to expand association health plans in Iowa and nationally, state and federal regulators are writing rules to provide new options for many types of business organizations to pursue health coverage plans for their members. However, Iowa's top insurance regulator – Insurance Commissioner Doug Ommen – says association health plans alone won't be enough to fix an individual health insurance market that's already on life support. Here's what Ommen and other health insurance experts say to expect ahead of the new laws going into effect, and what it may mean for many Iowa small-business owners.
The U.S. Labor Department in January proposed rules that would make it easier for states to allow new or expanded use of association health plans, following an executive order signed by Trump that encouraged more use of such plans.
Iowa's new law, Senate File 2349, which becomes effective July 1, authorizes associations or related businesses to form Multiple Employer Welfare Arrangements (MEWAs), which would be regulated by the insurance division.
The legislation, which combined two bills into one – also allows the Iowa Farm Bureau Federation to offer a health benefit plan to its 160,000 members on the premise that the coverage is not technically insurance, so it will be exempt from regulation by the Iowa Insurance Division.
Notably, the non-insurance benefit plans won't subject Farm Bureau members to federal penalties for not having health insurance, since Congress repealed the Affordable Care Act's individual mandate effective on Jan. 1, 2019, as part of the Tax Cuts and Jobs Act signed by the president in late December.
Legislative Update April 20, 2018
This week seemed like more of a mutual admiration society week, with a long list of resolutions honoring those legislators that are not seeking reelection. There is still no end in sight and the biggest chunk remains approving a budget and tax reform. So, without capping it off yet, overall, it's been a successful session for our industry. We lost a few that we should not have (Right to Repair and Energy Code gamesmanship) but gained favorably on just about everything else that we tried or weighed in on. They are working on many issues still, it's not like there's nothing going on, but they are not of interest to our industry. Here are a couple of updates:
HF2478 – A bill for an act amending the sales tax imposed on certain machinery, equipment, attachments, and replacement parts used in construction. (Formerly HSB 673.) Passed House, ayes 98, nays none. H.J. 798. (HBAI in favor)
Signed by Governor
HF 2480 – A bill for an act concerning manufactured homes by creating a manufactured housing program fund and providing eligibility under the home ownership assistance program for military members for the purchase of manufactured homes. (Formerly HSB 682.) Effective 7-1-18. Signed by Governor. H.J. 802. (HBAI undecided)
Construction Contracts and Law Live Online
Builders and remodelers could use a primer on contract law – and now they can have it in webinar format. The NAHB Construction Contracts & Law Live Online course will be offered over three consecutive Tuesdays, 1-3 p.m. ET, on May 1, 8 and 15.
The course explains contracts specifically recommended for builders and remodelers: sales agreements, construction and remodeling contracts, warranties and subcontractor agreements, including mandatory and optional provisions.
Participants get a step-by-step explanation of how these contracts work and why they are a useful and important tool for developing better relationships with customers and suppliers, dispute resolution and risk management. Special emphasis is given to troubleshooting contracts to help minimize any loopholes. Additionally, participants in this course will be able to:
- Describe elements, benefits and interpretation principles of contracts
- Identify additional resources related to construction law
- Earn continuing education credits if you hold an NAHB designation (six hours toward CAPS, CGA, CGB, CGR, GMB, CSP, Master CSP, CGP, CMP, Master CGP and MIRM)
A veteran instructor of the classroom version of this course, Mark D. Shifton will lead these online sessions. He is a senior partner in the Princeton, New Jersey and New York City offices of Seiger Gfeller Laurie LLP. Mark represents owners, design professionals and contractors in construction disputes and serves as the marketing chair of the Defense Research Institute's Construction Law Committee, as well as the co-chair of the New Jersey Defense Association's Construction Law Committee.
Though not required for this webinar, you can get access to some of the most useful contract documents developed by experienced construction law attorneys, builders, remodelers and industry experts now available at nahbcontracts.com.
Registration is open until 3 p.m. ET on Monday, April 30. For questions about registration, please email Sheila Coble or call 800-368-5242 x8057.
May is National Home Remodeling Month: Made Easy!
Home owners spent more than $152 billion in remodeling projects in 2017. And this year is projected to be even busier for the remodeling industry, which typically kicks into high gear each year as the warmer weather of spring sets in.
That's why May is the best time to celebrate National Home Remodeling Month – an opportunity for remodelers and home builders across the country to promote their businesses and raise consumer awareness of the benefits of hiring a professional remodeler to get the job done.
For members of NAHB Remodelers, building a strategy couldn't be easier: They have access to a step-by-step guide for National Home Remodeling Month and tips to maximize promotion efforts, as well as an online toolkit filled with free resources, including:
- Social media graphics and sample posts
- A consumer brochure on finding the right professional remodeler
- An infographic highlighting aging-in-place statistics
- An article about the benefits of green remodeling
- Lists of top remodeling projects
Additionally, NAHB Remodelers is hosting five free professional development webcasts in the month of May exclusively for NAHB Remodeler members. The webcasts will be held May 1, 8, 15, 22 and 30, and each will begin at 1 p.m. ET.
For questions about these members-only resources, contact remodel@nahb.org. You can also join the NAHB Remodelers Facebook and LinkedIn groups for continued discussion and to share ideas. Or to learn about joining NAHB Remodelers, visit nahb.org/whynahbr.
Only Three Foursomes Remain for Doug Mayo Memorial Golf Outing
We're almost sold out! Only three more team spots are available. The registration is open now, so gather up your foursome and sign up before it sells out. Once again it will be at Copper Creek Golf Course and begins with a 10:00 a.m. shotgun start. Click here to register. There are plenty of opportunities for hole, beverage, and prize sponsorship's too – so get your company name in early for maximized exposure in our promotional materials.