CONSTRUCTION DEFECT JOURNAL

"News and Information for Construction Defect and Claims Professionals"

CONSTRUCTION DEFECT JOURNAL - ISSUE 242749 - SATURDAY, FEBRUARY 21, 2026

Someone pointing to clause in contract

Today many private projects are done with “manuscript” contracts, and many public entities have developed their own contracts. And not all those clauses seem so fair.

Identifying Unfair Clauses in Construction Contracts

February 17, 2026
Curtis W. Martin - Peckar & Abramson, P.C.

In 1979, virtually all projects were completed under form contracts. As I started practicing construction law, it seemed that most form contracts were generally fair. They were negotiated by industry groups and over the next 10-20 years they appeared to become fairer. We could and did compare provisions in the AIA documents, the Federal contract forms, and the EJCDC agreements. When we did, we found subtle differences, but broad similarities in their approach to contract risk allocation.

Today many (most?) private projects are done with “manuscript” contracts – instruments tailored to the owner’s interests. And many public entities have developed their own contracts. And not all those clauses seem so fair.

This month I focus on contract clauses that I consider unfair. And while unfairness, like beauty, may be in the eye of the beholder, I think that the clauses described below aptly fit that descriptor.

Mr. Martin may be contacted at cmartin@pecklaw.com

Reprinted courtesy of Curtis W. Martin, Peckar & Abramson, P.C.

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CDJ NEWS THIS WEEK



Homes on fire

Cladding has become a contentious issue in the UK following the Grenfell Tower fire in June 2017.

Elliott Backed Venture Sues Lloyds Over Avant Cladding, Times Reports

February 17, 2026 — Eamon Farhat - Bloomberg

Elliott Investment Management and British housing tycoon Jeff Fairburn, joint-venture partners in UK homebuilder Avant Homes Group, are suing Lloyds Banking Group Plc over who should pay to fix properties that fail to meet post-Grenfell fire-safety standards, the Times reported.

Avant, which faces remediation costs of at least £107 million ($146 million) for potentially dangerous cladding, argues that Lloyds should shoulder part of the bill because most of the developments were built before 2014, when the homebuilder was under the bank’s ownership, the Times reported.

Cladding has become a contentious issue in the UK following the Grenfell Tower fire in June 2017, in which dozens died after flames spread rapidly through flammable exterior cladding on the West London high-rise, laying bare deep failures in Britain’s building safety regulations.

Reprinted courtesy of Eamon Farhat, Bloomberg

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Rain rolling off of roof

During construction, the hotel suffered rainwater damage due to incomplete roofing systems.

Court Compels Appraisal Although Coverage Issues Exist

February 17, 2026 — Tred R. Eyerly - Insurance Law Hawaii

The California federal district court granted the insured’s motion to compel appraisal despite the existence of outstanding coverage issues. K4 Dev. LLC v. ACE Am. Ins. Co., et al., 2025 U.S. Dist. LEXIS 211337 (C.D. Cal. Oct. 6. 2025).

The insured owned hotel property. It was insured by ACE while the hotel was under construction. During construction, the hotel suffered rainwater damage due to incomplete roofing systems. The water damaged the interior finishes and furnishings from the 6th floor down to the basement, including 32 guestrooms.

The insured’s experts determined that the covered water losses delayed the hotel’s opening by 144 days. The insured submitted a claim for the water damage, covered claim expenses, and delay in opening losses. ACE denied the claim for delay in opening losses, stating that its expert determined the Water Events did not delay the hotel’s opening. ACE, however, did pay for the repair damage caused by the Water Events.

Mr. Eyerly may be contacted at te@hawaiilawyer.com

Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert

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Magnifying glass on contract

Keep a copy of the contract documents, and particularly the main contract that you signed, handy.

Reminder: FOLLOW Your Well Drafted Contract Provisions

February 17, 2026 — Christopher G. Hill - Construction Law Musings

I have early and very often stated that your contract is the basis for everything relating to your construction project. Everything from “no damages for delay” clauses to attorney fees to indemnity are found in those documents. A well drafted construction contract sets the expectations for the project clearly and, aside from just making it easier on everyone for a successful project, will ease things should there be any dispute later.

However, all of the great drafting and pre-construction negotiation in the world won’t do you a bit of good if you don’t follow those provisions. I can’t count the number of times that a contractor or subcontractor has read and even understood the construction documents but then put the contract in the drawer and didn’t look at it again. Your experienced construction attorney, while helpful at the drafting and negotiation stages and beyond, cannot help do the work. Your lawyer can help you negotiate and highlight the notice provisions of the contract but cannot provide that notice to the Owner or General Contractor when you have a claim. In short, the best contract in the world is only as good as those that are following it.

Mr. Hill may be contacted at chrisghill@constructionlawva.com

Reprinted courtesy of The Law Office of Christopher G. Hill

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Golfer teeing up

We must stop treating mediation as a single-day event and start treating it as a managed, sequenced process. The centerpiece of this resolution is the “Tee-Up Day.”

New Year’s Resolution: Engineering the “Tee-Up Day” for Complex Construction Mediations

February 17, 2026 — Joël Bertet - The Dispute Resolver

The construction industry is defined by its commitment to "Critical Path" scheduling. From the moment a project breaks ground, every stakeholder—from the MEP sub to the owner’s rep—is focused on sequencing. We know that you cannot hang drywall before the rough-in is inspected, and you cannot pour a slab-on-grade until the vapor barrier is verified.

Yet, when these projects devolve into litigation, the legal community often abandons the logic of sequencing. We rush headlong into "The Mediation Day"—a high-stakes, expensive, one-day marathon where we expect dozens of parties, hundreds of insurance layers, and thousands of pages of expert reports to magically align into a settlement by 6:00 PM.

As we open our calendars for the new year, it is time for a professional resolution. We must stop treating mediation as a single-day event and start treating it as a managed, sequenced process. The centerpiece of this resolution is the “Tee-Up Day.”

Mr. Bertet may be contacted at joel@resolvebertet.com

Reprinted courtesy of Joël Bertet, ResolveBertet

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San Diego Skyline Palm Trees

The law’s intent is clear—ease financial strain on contractors and subcontractors while still providing owners with security (albeit reduced) with respect to project completion.

California’s Retention Reform on Private Construction Projects

February 17, 2026 — Michael McKeeman - The Construction Seyt

Retention has long been a contentious issue in California construction. Traditionally, owners withheld retention of 10% from each progress payment until completion, arguing it was necessary to ensure performance, quality and timely delivery. Contractors and subcontractors, however, often struggled with cash flow, payroll, and material costs while waiting months—sometimes even years—for withheld retention.

Recognizing the financial challenges contractors and subcontractors face, the California legislature passed Senate Bill 61 (“SB 61”), now codified under California Civil Code Section 8811 and effective January 1, 2026, limiting retention to 5% on private works of improvement, aligning with the public works standard in place since 2012. The law’s intent is clear—ease financial strain on contractors and subcontractors while still providing owners with security (albeit reduced) with respect to project completion.

Mr. McKeeman may be contacted at

Reprinted courtesy of Michael McKeeman, Seyfarth

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Note pinned to wall

If there are important provisions dealing with time, you don’t want to leave them undefined as that can create an ambiguity in the contract.

Quick Note: Include Key Time Related Facts in Contract to Avoid an Ambiguity

February 17, 2026 — David Adelstein - Florida Construction Legal Updates

When drafting or negotiating a contract, it is important to consider key time-related facts. In other words, if there are important provisions dealing with time, you don’t want to leave them undefined as that can create an ambiguity in the contract.

In a recent case dealing with an investment contract, discussed here, that’s exactly what happened. The contract allowed investors to exercise an option to return their equity in exchange for a refund of their investment but the contract didn’t contain an expiration date on when the option must be exercised. The investors tried to exercise the option two years later leading to a dispute as to whether that was a “reasonable time.” This is because the lack of clarity regarding this temporal fact led to a latent ambiguity meaning it was a question of fact as to whether the investors exercising the option two years later was reasonable under the circumstances.

Mr. Adelstein may be contacted at dma@kirwinnorris.com

Reprinted courtesy of David Adelstein, Kirwin Norris

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Check next to Exclude

The excess policy defined “professional services” to include “inspections” done by architectural and engineering professionals.

Indiana District Court Finds Crane Inspection Services Do Not Trigger “Professional Services” Exclusion in Liability Policy

February 17, 2026 — Jason Taylor - Traub Lieberman Insurance Law Blog

In Crane 1 Holdco, Inc. et al. v. Continental Ins. Co., 23-cv-205 (N.D. Ind. Jan 12, 2026), the District Court for the Northern District of Indiana had occasion to interpret the scope and meaning of the term “professional services” in an excess liability policy exclusion. By way of background, Robert Coppage was crushed by a crane while at work. He was seriously injured and later received a significant settlement in a state court civil action against the company that inspected the crane, Crane1. Crane1 sought coverage for the settlement under a first layer excess policy issued by Continental Insurance Company, which included an exclusion for any “liability arising out of the actual or alleged rendering of, or failure to render, any professional services by the Insured or any other person for whose acts the Insured is legally responsible.” The underlying complaint alleged that Crane1 was negligent in its modification, services, maintenance, inspection, and/or repair of the crane.

Mr. Taylor may be contacted at jtaylor@tlsslaw.com

Reprinted courtesy of Jason Taylor, Traub Lieberman

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Gavel

New York Partner Minyao Wang, Chicago Partner Bryan Sugar, and Denver/Washington, D.C. Partner Christopher Wood secured a victory on behalf of Lewis Brisbois’ client, a hotel developer.

Cross-Office Team Secures Litigation Stay and Order of Arbitration on Behalf of Hotel Developer

February 17, 2026 — Lewis Brisbois Newsroom

New York Partner Minyao Wang, Chicago Partner Bryan Sugar, and Denver/Washington, D.C. Partner Christopher Wood secured a victory on behalf of Lewis Brisbois’ client, a hotel developer, when the Circuit Court of Cook County, Illinois granted the client’s motion to dismiss and ordered the parties to proceed to arbitration.

In this matter, the 39 plaintiffs, represented by a New York based law firm that focuses on EB-5 litigation against high-end real estate developers, were foreign nationals living in China or Taiwan who were seeking EB-5 visas and invested in a lending company. The lending company loaned money to entities that were managing a project that involved renovating a hotel and constructing a mixed-use tower in downtown Chicago. Disputes developed among the parties. The foreign investors organized informally and ultimately filed suit against Lewis Brisbois’ client, alleging claims of breach of fiduciary duty, breach of contract, conversion, and conspiracy, as well as aiding and abetting conversion. The defendants faced exposure of at least $20 million.

Reprinted courtesy of Lewis Brisbois

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Construction site workers sunset

Attorney Garret Murai covers the Dodge Construction Network’s Outlook 2026 Ebook.

2026 Construction Outlook: Dampening Outlook With Some Potential Bright Spots

February 17, 2026 — Garret Murai - California Construction Law Blog

According to Dodge Construction Network’s Outlook 2026 Ebook, “the construction industry came roaring into 2025” – with large government investments through the Infrastructure Bill and the CHIPS Act (promoting investment in the domestic semiconductor industry), as well as outsized spending on data centers to support cloud and AI technology – but “throttled back significantly” due to “rapid changes to economic and fiscal policies.”

These changes include short-term cost impacts due to tariffs and labor impacts due to the federal government’s immigration crackdown and long-term concerns following enactment of the One Big Beautiful Bill (OBBBA) which is anticipated to add $3.4 trillion to the federal deficit over ten years.

Mr. Murai may be contacted at gmurai@nomosllp.com

Reprinted courtesy of Garret Murai, Nomos

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Gold Stars

Their inclusion reflects their extensive trial experience, national leadership roles, and sustained excellence representing clients in complex, high-stakes matters.

John Palmeri and Peter Siachos Named to 2026 Lawdragon 500 Leading Lawyers in America

February 17, 2026 — Gordon Rees Scully Mansukhani

Gordon Rees Scully Mansukhani is proud to announce that Partners John Palmeri and Peter Siachos have been named to the Lawdragon 500 Leading Lawyers in America for 2026. Their inclusion reflects their extensive trial experience, national leadership roles, and sustained excellence representing clients in complex, high-stakes matters.

Now in its 21st year, the Lawdragon 500 Leading Lawyers in America guide honors attorneys who lead the profession through exceptional advocacy, dedication to clients, and influence within their firms and communities. Selected through yearlong research, peer discussion, and robust nominations, the guide recognizes lawyers who continue to shape the legal landscape at the highest levels.

Reprinted courtesy of Gordon Rees Scully Mansukhani

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Offshore wind energy

The move follows Jan. 12 decision to lift stop work ordere on $6.2B Revolution Wind project.

Court Ends Trump Shutdown of NY's $5B Empire Wind, Second Offshore Project Revived

February 17, 2026 — Debra K. Rubin - Engineering News-Record

In a much-anticipated decision Jan. 15, the federal district court in Washington, D.C., revoked a construction shutdown ordered by the Trump administration against another major East Coast offshore wind project—the $5-billion Empire Wind underway south of New York City. The project's developer, Norway-based Equinor, won a stay and preliminary injunction in response to its lawsuit and one from the state, which aims to direct most of the project's planned 810 MW of power generation to the city's metro area.

Ms. Rubin may be contacted at rubind@enr.com

Reprinted courtesy of Debra K. Rubin, Engineering News-Record

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Two construction workers wearing safety harnesses

“Recognize, Respond and Respect”: This year’s Construction Safety Week theme focuses on the shared responsibility of maintaining top-notch safety standards across every project phase.

A New Vision for Safety: Construction Safety Week’s Five-Year Plan

February 17, 2026 — Adam Jelen - Construction Executive

Construction Safety Week has long been a powerful show of force—a catalyst for bringing the industry together and focusing on the critical importance of health and safety. Over the last decade, we’ve made meaningful strides: advancing best practices, transitioning from hard hats to helmets, shedding light on vital issues such as mental health, fostering a culture of care and accountability and creating partnerships and initiatives that improve jobsite safety.

Building on the progress we’ve made, we’ve launched a bold five-year vision to bring everyone together with trust and respect and to drive alignment in how safety is understood, owned and engineered at every step of the project. This is an industrywide effort to further deepen the culture of care centered around respect for the skilled craft and through all aspects of a project where all team members share this responsibility, this respect, across every phase: design, planning, construction and beyond.

Reprinted courtesy of Adam Jelen, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

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Consulting Design and Architecture Expert Witness

Forensic Architect CA, AZ, NV, CO, TX, UT, FL, NM, OK - NCARB - National Council of Architectural Registration Boards

California Architectural Registration Board Supplemental Examination Commissioner

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Homes under construction aerial view

Sales of New US Homes Hold Close to Fastest Pace Since 2023

February 17, 2026 — Michael Sasso - Bloomberg

Sales of new homes in the US were little changed in October near the strongest pace since 2023 as builders lured anxious customers with price cuts and incentives.

New single-family home sales eased 0.1% to an annual rate of 737,000 following a 3.8% September increase, according to government data released Tuesday. The report, which included the first estimate of September sales, was delayed by the record-long federal shutdown.

Reprinted courtesy of Michael Sasso, Bloomberg

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Upward trend arrow

Construction Input Prices "Surged" Year-Over-Year in November, ABC Says

February 17, 2026 — Alisa Zevin - Engineering News-Record

Construction input prices rose 3.4% in November, year-over-year, according to the Price Producer Index recently released by the U.S. Bureau of Labor Statistics. On a monthly basis, overall prices increased 0.6%.

Ms. Zevin may be contacted at zevina@enr.com

Reprinted courtesy of Alisa Zevin, Engineering News-Record

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Sensor next to window

Building Sensors Make Financial Sense in Construction Insurance

February 17, 2026 — Chad Hollingsworth - Engineering News-Record

How many insurance managing general agencies can say they helped renovate and protect from damage a national landmark? Let me explain the context. You know that spiraling material costs, labor shortages and other challenges make it hard for contractors and developers to stay on track and budget. Any delays or disruptions can devastate profits.

ENR may be contacted at enr@enr.com

Reprinted courtesy of Chad Hollingsworth, Engineering News-Record

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Seminar

DRI’s 2026 Insurance Coverage & Claims Institute

February 17, 2026 — Beverley BevenFlorez – CDJ Staff

Attendees will learn “from experts on subjects such as business interruption coverage, the impact of towers of coverage, navigating the bad faith minefield, and more.” Topics to be covered include implications of rescinding or voiding insurance policies, coverage for business interruption claims, impact of towers of coverage and their impact on coverage litigation, trends in insurance coverage, and the ins and outs of coverage for privacy claims under Section B of CGL policies.

March 11th-13th, 2026
Loews Chicago
455 N Park Dr
Chicago, IL 60611

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Homeowners Say Beverly Hills Businesswoman Is Wrongfully Hitting Their Homes with Massive Liens

A group of homeowners in the Beverly Hills area say they have a warning for all property owners, 7 On Your Side Investigates reported. They claim their homes have all been hit with massive, multimillion-dollar liens by someone they've never done business with.

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3 Arrested for Burbank Real Estate Fraud Scheme

A 63-year-old San Bernardino County woman and two other men were arrested for the alleged fraudulent sale of a $1.5 million Burbank home they did not own, federal officials announced. KTLA's Omar Lewis reports on Feb. 13, 2026.

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