Turnover Traps for Community Associations: Investigate First, Release Claims Later
April 14, 2026 —
Nicholas B. Vargo - Ball Janik LLPTurnover of a community association from developer control to owner control is a uniquely vulnerable moment. Developers are increasingly presenting Florida condominium and homeowners’ associations with “standard” settlement or release agreements at turnover, often being framed as routine steps to finalize the transition of control. In reality, these agreements can have sweeping consequences, including the release of construction-defect claims before the association has conducted any meaningful independent evaluation.
The developer has years of project knowledge and access to plans, subcontractors, and internal records. The newly elected board is just beginning to organize, obtain documents, and understand the property’s condition. Many defects, especially those involving roofing, waterproofing, windows, or structural components, are latent and not yet visible. Signing a release at this stage means the association is making a binding decision under conditions of uncertainty, without full information, to release all future potential claims.
Over the last few years, there has been a rise in reports of developers offering a packaged deal: they agree to complete certain repairs, often minor punch-list or cosmetic items, and to “forgive” an alleged financial deficit (often around $50,000) supposedly owed by the association from the developer-control period. In exchange, the association is asked to sign a broad release covering all claims, including known and unknown construction defects. To a new HOA board that received their community with limited operating and reserve funds, they are left with a difficult decision to either accept the developer’s offer or assess their owners to pay this alleged debt.
These agreements are occasionally presented through community management companies, which may describe them as “standard” or "routine.” Whether due to misunderstanding or influence from the developer, management companies can unintentionally reinforce the idea that signing is expected. Any recommendation provided to HOAs about whether to sign these releases could open community management to liability down the road. The best practice for both associations and community managers is to refer any agreements to be reviewed by general counsel for the association.
The following two case studies illustrate the real-world consequences:
Case Study One: A newly transitioned board relies on its management company to negotiate with the developer-builder to resolve irrigation issues, pond concerns, and signage deficiencies, along with forgiving an asserted financial shortfall. In exchange, the board signs a broad release covering all claims, including latent defects.
Within a year, several punch-list items remain incomplete, and more serious issues arise. When the association demands completion, the developer delays, prompting the association to seek advice on how to enforce the settlement agreement. The association hires counsel to hold the developer responsible for both the previously agreed-upon items and newly identified construction defects. However, when the association brings claims against the developer, the developer points to the release of all potential construction defects in the community. Thus, the only remaining remedy is limited to enforcement of the specific punch-list terms. The community, still relatively new, has no viable claims against the developer-builder for the construction defects. With warranties expired and the release, the association must fund repairs through special assessments, despite defects that would otherwise have been actionable.
Case Study Two: A community is presented with a similar agreement as above. The management company encourages execution, suggesting it is standard and even telling the board to “name your price.” The developer also pressures the newly elected board to sign.
Instead of signing, the board consults with their attorney. Counsel advises the board not to sign the release and recommends further investigation. Engineers are retained and identify early indicators of broader issues, including stucco cracking, water intrusion, and irrigation deficiencies. Based on this information, the association declines to sign the release. Subsequent evaluation reveals potentially significant construction-defect claims, allowing the community to pursue recovery that would have been lost under the proposed agreement.
These scenarios underscore a fundamental point: signing a release at turnover is not an administrative formality—it is a major legal decision. Board members act in a fiduciary capacity on behalf of their community, and their decisions can bind all current and future owners. At turnover, an association’s right is to investigate and pursue claims. Preserving that right until a full and independent evaluation is completed is not adversarial—it is responsible governance.
Accordingly, associations should retain independent evaluations of the property and consult qualified legal counsel before signing any “standard” agreements, especially ones involving a release of future claims.
Nicholas B. Vargo is a partner in Ball Janik LLP’s Construction Practice Group. He may be reached at nvargo@balljanik.com.
Oracle's $16B Michigan Data Center Secures Financing as Power Contracts Face Appeals
June 08, 2026 —
Bryan Gottlieb - Engineering News-RecordA $16 billion hyperscale data center under construction outside Ann Arbor, Mich., has secured financing backed by Blackstone and other institutional investors, even as the project's power supply agreements now face a legal challenge before the Michigan Court of Appeals.
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Bryan Gottlieb, Engineering News-RecordMr. Gottlieb may be contacted at
gottliebb@enr.com
New Law Prompts ABC Minnesota/North Dakota to Design New Telecommunications Safety Training Program
June 29, 2026 —
Grace Calengor - Construction ExecutiveOn the first day of the year, a
Minnesota law requiring installers of underground telecommunication infrastructure broadband, fiber or phone lines (when projects utilize directional drilling, and/or work is being conducted within 10 feet of existing utilities) to undergo a 40-hour certification went into effect.
Originally passed in mid-2024 and proposed to go into effect in July 2025, the law’s requirements were postponed until January 2026, giving
ABC Minnesota/North Dakota—in partnership with
NCCER and the
Minnesota Cable Communications Association—time to roll out their
Safety Qualified Underground Telecommunications Installer training program, which would ensure the workforce of their contractor members were certified.
Reprinted courtesy of
Grace Calengor, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Surety Liability Is Coextensive with Its Bond Principal
April 14, 2026 —
David Adelstein - Florida Construction Legal UpdatesA recent Miller act payment bond case, U.S. f/u/b/o Whitetail General Constructors v. Northcon, Inc., 2026 WL 46671 (D.Mont. 2026), contains a short noteworthy discussion as to a surety’s liability being coextensive with that of its bond principal. If you are bonded, or you are pursuing a bond, you need to appreciate this, which is why this is a noteworthy discussion:
A “surety’s liability on a Miller Act bond must be at least coextensive with the obligations imposed by the Act if the bond is to have its intended effect.” “Therefore, ‘the liability of a surety and its principal on a Miller Act payment bond is coextensive with the contractual liability of the principal only to the extent that it is consistent with the rights and obligations created under the Miller Act.’” In other words, “[w]here a subcontract’s terms are consistent with the Miller Act’s provisions, the surety’s liability on the Miller Act bond is coextensive with the contractual liability of its princip[al].”
“The liability of a surety under the Miller Act is controlled by federal law, rather than state contract law[.]” The court may, however, “look to state law when interpreting contractual provisions” in a Miller Act case.
“[T]he measure of recovery under the Miller Act is generally determined by the terms of the subcontract [or underlying contract].”
Northcon, supra, at *4-5 (internal citations omitted).
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David Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
A Win for Clarity: What a Recent Federal Court Decision Means for Davis-Bacon Compliance
July 13, 2026 —
Stephen E. Irving - Peckar & Abramson, P.C.Following the
Department of Labor’s 2023 Davis-Bacon rule changes, federal construction contractors faced a pressing question: not whether paying prevailing wages is required, but how far those obligations could extend. Could they reach off-site material suppliers? Delivery drivers? Contracts that omitted Davis-Bacon clauses entirely? A recent federal court decision in AGC of America v. US Department of Labor answers these questions in important ways, vacating several disputed provisions and giving contractors greater certainty when pricing, bidding, and administering federal construction projects.
The ruling addresses three aspects of the 2023 regulations that sought to extend Davis-Bacon obligations beyond their traditional scope. By vacating those provisions, the decision creates a more predictable compliance environment and reinforces an important principle: Davis-Bacon enforcement works best when contractors, workers, and regulators operate under clear, objective rules.
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Stephen E. Irving, Peckar & Abramson, P.C.Mr. Irving may be contacted at
sirving@pecklaw.com
Connecticut Expands Construction Wage-Theft Liability and Prevailing Wage Recordkeeping Requirements
June 29, 2026 —
Anand Gupta & Guest Contributor - Construction Law ZoneThis post was co-authored by Labor + Employment group lawyer Christopher Costain, Hayden Eckblom (Summer Intern), and Pasqualina Fox-Mina (Summer Associate). Hayden and Pasqualina are not admitted to practice law.
On May 11, 2026, Connecticut Governor Ned Lamont signed into law Public Act 26-12, a wide-ranging bill centered around employee rights. Our colleagues in Robinson+Cole’s Labor, Employment, Benefits + Immigration group recently published a
legal update summarizing the key components of Public Act 26-12. Here, we focus on the Wage Theft and Prevailing Wage concepts in the bill that directly relate to the construction industry.
Wage Theft
With exceptions for public works and small residential projects, general contractors will be jointly and severally liable for any unpaid wages owed to an employee of a subcontractor of any tier on private construction projects, beginning with contracts entered into on or after January 1, 2027. As we know, there is a separate regime for public works projects involving payment bonds.
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Anand Gupta, Robinson & Cole LLPMr. Gupta may be contacted at
agupta@rc.com
The Deadline to File Suit on a Public Works Payment Payment Bond is Triggered by a Claimant’s Work on a Project Not by a Claimant’s Work Under a Contract
June 02, 2026 —
Garret D. Murai - California Construction Law BlogCalifornia law requires that prime contractors furnish a payment bond – providing for payment to lower-tiered subcontractors and suppliers – on state and local public works projects with a value in excess of $25,000. There are three conditions that must be satisfied when a claimant makes a claim against a payment bond on a public works project in California:
- First, generally, the claimant must have served a preliminary notice, unless the claimant is a first-tier subcontractor or supplier;
- The claimant must have “ceased to provide work” on the project; and
- The claimant must file suit against the payment bond no later than six (6) months after the period in which a stop payment notice must be given or, in other words, the earlier of 270 days after completion of the public works project or 210 days after a notice of completion or cessation was recorded on a public works project.
In
Tarlton & Sons, Inc. v. Great American Insurance Company, 111 Cal.App.5th 376 (2025), the 2nd District Court of Appeal examined whether a subcontractor timely filed a claim against a payment bond when a prime contractor was terminated and replaced by another prime contractor who the subcontractor continued to perform work for.
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Garret D. Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
Snell & Wilmer Recognized With Top Honor in Ranking Arizona: Top Law Firms for 2026
June 22, 2026 —
Snell & WilmerPHOENIX – Snell & Wilmer is pleased to announce that the firm has been voted as the top law firm in Arizona for the 17th consecutive year in the 2026 edition of AZ Big Media’s
Ranking Arizona: The Best of Arizona Business. The firm was again recognized in the category of “Top 10 large law firms in Arizona” which looked at firms with 39 attorneys or more.
“We are honored to receive this award recognizing our team’s ongoing commitment to excellence in service of our clients, our community, and each other,” said Firm Chair Barbara J. Dawson. “We are proud to play a meaningful role in supporting the strength and growth of Arizona’s vibrant business environment amid a rapidly changing global economy.”
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Snell & Wilmer
