Purchase agreements for construction, development, or real estate-related projects frequently offer parties the option of early mediation for settling a dispute before proceeding to arbitration or court litigation. While in my experience early mediation sessions tend to fail, additional mediation sessions held months later have a better chance of succeeding. In my latest column for…

Washington’s construction lien statute, RCW 60.04, balances the interests of persons performing work to improve real property with the interests of property owners in avoiding the necessity of paying for the same work twice. An unpaid contractor can assert a lien against property it has improved, but the owner has a right to notice that the work is taking place. On commercial projects, a contractor that is not under contract with the owner or prime contractor (a “lower-tier” subcontractor) usually must give a pre-claim notice to the owner to preserve its lien right. A contractor supplying only labor is expressly exempt from this requirement, though there has been some question regarding whether a lower-tier subcontractor providing both labor and materials is subject to the notice requirement.

Adding solar energy facilities to a rooftop or a parking lot can put developed land to even more productive use while creating value for a property via a new revenue stream—rent payments—or from the energy savings and environmental benefits realized by using the generated power on site. Though similar to typical commercial leases and to…

In addition to Washington’s real estate excise tax (REET), transferors of ownership interests in entities that own real property in Washington must also factor in Washington’s capital gains tax when making such transfers.  The Washington Supreme Court upheld the capital gains tax as a constitutional excise tax earlier this year. See Quinn v. State, 1 Wn.3d 453, 526 P.3d 1 (2023). The tax is a flat tax of 7% of all adjusted long-term capital gains over $250,000 allocated to the state. RCW 82.87.010.

Gains from the sale of real estate are generally exempt from Washington’s capital gains tax. RCW 82.87.050(1). The tax also does not apply to the sale or exchange of an interest in a privately held entity, if the gain or loss from such sale or exchange is attributable to real estate directly owned by such entity.  RCW 82.87.050(2). But what does this mean in the context of multi-tiered ownership structures, where a party desires to sell membership interests in a subsidiary that owns real estate?

Over this past summer, our colleague Mario R. Nicholas penned an article for the Daily Journal of Commerce entitled “Can Artificial Intelligence Be Trusted to Draft a Construction Contract?”  It is a great read, and we borrow from it here in many places.

In his article, Mario principally focused on why chatbots like…

Construction contracts generally outline when and how contractors should notify parties about potential claims for additional compensation and/or time. These provisions are intended to provide project stakeholders with the information necessary to address unforeseen circumstances and streamline claim resolutions within the project rather than resorting to legal actions. However, in some cases, the contract provisions…

In the busy world of commercial real estate, buyers and sellers may be unable to complete all contractual obligations before closing. In those instances, parties often identify certain “post-closing” matters in the contract. Typically, if those provisions are not carefully drafted to “survive” the closing, then the terms may merge with the deed and be deemed satisfied at closing. However, in a 2022 Oregon case, Freeborn v. Dow, the Oregon Court of Appeals identified a nuance to that rule and explained that certain contractual matters may survive closing and not merge with the deed, regardless of the presence or lack of a survival clause.