Vol. 43, No. 1
The official magazine of the North Carolina Home Builders Association
Spring 2013
Rick Judson
Elected Chairman of NAHB Regional Meeting Wrap-Up Top 10 NCHBA Actions in 2012 New Lien Law Update
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President’s Message by Gary Hill, 2013 NCHBA President
Why do you do what you do?
The official magazine of the North Carolina Home Builders Association
2005 Communicator Award Winner
Dedicated to the advancement of the home building industry, North Carolina Builder (ISSN 1552-8685) is published monthly for the members of the North Carolina Home Builders Association, P.O. Box 99090, Raleigh, N.C. 27624-9090. (800) 662-7129 • http://www.nchba.com Mike Carpenter Executive Vice President and General Counse l
mcarpenter@nchba.org
Lisa Martin Director of Government Affairs
lmartin@nchba.org
Steven Webb Legislative Lobbyist
swebb@nchba.org
Robert Privott Director of Codes and Construction rprivott@nchba.org Kathryn Atkinson Director of Membership Services katkinson@nchba.org Deborah Alford Director of Exhibitions and Education
dalford@nchba.org
Tracie Garrett Director of Exhibitor Services
tgarrett@nchba.org
Kep Paylor Vocational Education
kpaylor@nchba.org
Mike Elledge Controller
melledge@nchba.org
Heather Massengill Director of Communications and Managing Editor Kristin Conklin Assistant Education Coordinator
hmassengill@nchba.org
kconklin@nchba.org
Beth Gray Receptionist
bgray@nchba.org
Publisher Kevin Naughton Graphic Designer Jason Gabel Advertising Sales Manager Brenda Poe Advertising Sales Marsha Suwienski: (800) 935-1592, ext. 106 marshas@wildblue.net Brenda Poe: (800) 935-1592, ext. 115 bpoe@printcomm.com
F
irst, I’d like to say Happy New if you provide services to your Year to all of the 13,000+ customer so that they can purchase members of the North a home or remodel their existing Carolina Home Builders home, you are changing people’s Association. I am eager and excited lives. Somehow, someway. to be your President this year. This year, I encourage you to We’ve already had a very busy year, make an effort to impact people’s lives Hill with the International Builders so that they will say, “Wow, he or she Show, NCHBA Regional Meetings, the made an impact on my life!” I’m going to do NCHBA 1st Quarter Meeting, and the NC the same, and that’s why I made my theme for Builder Institute. the coming year, “Re-Inspire…Passion with a While I’ve been busy for the first few Purpose…Housing in North Carolina.” months of the year, this is my first chance to I have many things that inspire me … my write to all of you, our entire membership wife, my kids, my grandkids and my extended of NCHBA. family. I want to inspire people to do the In my remarks at the Installation Ceremony things that inspire them. last December, I asked everyone a simple On a separate note, I would like to extend question…Why do you do what you do? a personal invitation to you to join us May 21I want you to ask yourself that question 22 in Raleigh at the Legislative Conference. and ponder it a bit. Now make sure that If you read the feature article on me in the you ask the question with the right attitude. last issue, you read that I first got involved in What gives you motivation to get up every the Greensboro Builders Association through morning to do what you do? What is that its Legislative Committee. Our working passion that you have within yourself that relationship with the NC General Assembly causes you to do what you do? members is critical to furthering the message I’ll give you two tips: one, it is not in your of how important the housing industry is head, and two, it is not contained in your to our economy. If you are thinking about back pocket (or purse, ladies!). It must be getting involved in NCHBA this year, May found in your heart. 21-22 is the best way to start. I challenge you Think about the people you may have to be there and make a difference. impacted in your life or career. Did you What a privilege it is to serve as President change their lives? I would submit to you of the largest HBA in the nation! I look that whether you are a builder, remodeler, forward to traveling across the state and supplier of materials, supplier of labor, or visiting with you this year.
Published by:
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Acceptance of advertising in North Carolina Builder does not imply endorsement of the product or service by NCHBA. Opinions expressed in articles are those of the authors and people quoted and not necessarily those of NCHBA, nor does mention of specific products in editorial content imply endorsement by NCHBA. No material may be reproduced for further publication without the express permission of the association. North Carolina Builder is published for the principals and employees of all member firms of the North Carolina Home Builders Association and its receipt is included in the membership fee. North Carolina Builder is published six times per year. Since the mailing list used by North Carolina Builder is compiled according to membership records, address corrections should be directed to your local association. Dues paid to NCHBA are not deductible as charitable contributions for income tax purposes. However, they may be deductible as ordinary and necessary business expenses subject to restrictions imposed as a result of association lobbying activities. NCHBA estimates that the nondeductible portion of your 2013 dues — the portion that is allocable to lobbying — is 49 percent.
4 North Carolina Builder
Features Visit us at booth #834
V ol . 43, N o . 1, S pring 2013
NCHBA members shine at IBS_________________________________ 6 Optimism in the air at 2013 Regional Meetings_____________________ 8 Home builder website visits skyrocketing; are you converting? ________ 11 What home builders need to expect from the new lien laws___________ 12 Builder Classic Golf Tournament to raise money for college scholarships____ 14 Top 10 NCHBA actions to benefit our members in 2012____________ 15 Spring 2013
Rick Judson elected chairman of NAHB Kathy Craven Snodgrass, Tim Minton also hold top posts
s Kathy Craven Snodgrass (center) takes her oath of service as National Associate Chairman.
s Rick Judson installs Tim Minton as 2013 Executive Officers Council chair.
6 North Carolina Builder
Spring 2013
N
CHBA member Rick Judson, a Charlotte, N.C.-based home builder with more than 35 years of experience in the building industry, was elected Chairman of the National Association of Home Builders in January at the International Builders Show. Judson is the owner of Evergreen Development Group in Charlotte, and is a successful builder and developer with several decades of experience in land development and construction of single-family, multifamily and commercial projects. “Our focus this year is to ensure that the housing recovery stays on track and that housing continues to contribute to job and economic growth,” said Judson.“As the debate on tax reform heats up, we will be urging lawmakers to protect the mortgage interest deduction and other important housing tax provisions. In addition, we will be calling on policymakers to resolve a flawed appraisal process that is distorting home values, to restore the flow of credit to home buyers and home builders, and to ensure the federal government plays a constructive role in backing up the U.S. housing finance system.” In addition to Judson’s election to chairman of NAHB, two other NCHBA members were elected to top leadership posts at NAHB at the International Builders Show. Kathy Craven Snodgrass, a member of the Winston-Salem HBA, will hold the position of National Associate Chairman for 20132014. In her position, she will work with NAHB Senior Officers and will be the voice of the associate members. Tim Minton, Executive Officer of the HBA of Raleigh-Wake Co., was installed as Chairman of the NAHB EO Council. Minton leads the largest HBA in the nation. In addition, several local HBAs and members took home awards at IBS.
The Nationals – Sales & Marketing Awards Sales Team of the Year: Christi Thompson, Renee Carroll, Charlotte Marlon of Coldwell Banker Howard Perry and Walston Builder Services in Wake Forest Best SMC: Triangle Sales & Marketing Council Best Special Promotion: Earnhardt Collection Grand Opening in Asheville, Schumacher Homes Building Industry Community Spirit: Homes by Dickerson Best Marketing by an Associate: “Zip It Tight” by Huber Engineered Wood in Charlotte Best Architectural Design for a Single Family Home 2,000-2,500 sq. ft.: Schumacher Homes, Blue Ridge Model Spring 2013
NAHB/Builders Mutual Insurance Company Safety Award for Excellence (SAFE) Specialty Trade Contractor Safety Program of the Year (Less than 50 employees): Custom Home Exteriors/ CHE Home Renovations, Raleigh, N.C. Specialty Trade Contractor Safety Program of the Year (More than 50 employees): Vance Johnson Plumbing Fayetteville, N.C.
Remodelers Council Awards Largest Membership Increase in Category: Remodelers Council of the HBA of Raleigh - Wake Co.
visit oNe oF our loCatioNs: Charlotte, NC 28206 (704) 377-5443 • (800) 438-5908 Fax (704) 376-3559 ElizabEth City, NC 27909 (252) 338-2737 • (800) 841-0408 Fax (252) 338-3123 Fayetteville, NC 28306 (910) 483-3360 • (800) 542-7448 Fax (910) 483-3499 GreeNsboro, NC 27406 (336) 273-8681 • (800) 722-2200 Fax (336) 273-0521 hiCkory, NC 28601 (828) 322-7080 • (800) 236-5607 Fax (828) 322-7274 New berN, NC 28560 (252) 672-8900 • (800) 548-1610 Fax (252) 672-8904
Green Building Awards Remodel Project of the Year: Paradise Found Construction’s Finding Paradise on Picardy in Raleigh, N.C.
Best in American Living Awards Room of the Year: Kitchen in the chancellor’s residence at North Carolina State University; Builder: Rufty Homes; Designed by Marvin Malecha and Weinstein Friedlein Architects
NC Professional Women in Building PWB Spike Rookie of the Year: Deborah Enderli, Onslow HBA PWB
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North Carolina Builder 7
Executive Vice President’s Message by Mike Carpenter, NCHBA Executive Vice President
Optimism in the air at 2013 Regional Meetings
T
he North Carolina Home Builders Association held its Gas and REBIC, in addition to BMIC. Thanks for annual series of ten regional meetings across the state your support! February 4-8. In total, we had 227 members present with Also, I would like to thank the NCHBA senior officers 13 members of the traveling party who participated in Gary Hill, Kevin Annas, Sean Sullivan, Barry Tutor each program and 14 special guests. Some 45 of our 65 local and Erik Anderson—for devoting a week out of their busy associations were represented by at least one attendee. schedules to help lead these meetings from the mountains to Timely information about NCHBA was imparted at each the coast. This year Gary, Kevin and Barry went East and Sean Carpenter meeting locale during the first hour. This part of the program featured and Erik traveled West. Their eager participation vividly demonstrated a PowerPoint presentation with five speakers. Each attendee received a to our local HBAs the dedication to, and passion for, our association and flash drive containing more detailed information. industry that each of these gentlemen brings to their respective offices. The first hour was then followed by a program unique to each I would also like to thank the NCHBA staff who traveled to region chosen by that region’s RegionalVice President.These programs one or more of the meetings: Kathryn Atkinson, Heather varied by region: from a general discussion of statewide, regional and Massengill, and Lisa Martin. In particular, Kathryn and Heather local issues of interest in some to the presentations of a guest speaker in deserve special recognition for the many hours both spent in others. For example, the Region VI meeting in Charlotte included an preparing the popular PowerPoint presentation and the flash drive that impressive panel of eight members of the General Assembly. each participant received. This flash drive is a wonderful resource for Before briefly summarizing the highlights of each meeting, I would our local HBA leadership to explain and categorize the many services like to express NCHBA’s sincere appreciation to Builders Mutual NCHBA offers. Finally, I would also thank our outstanding group of Insurance Company for its sponsorship of all ten of these meetings 2013 Regional Vice Presidents for their planning and execution of and the participation of Mike Gerber, Brad Moock, John Parrish, these meetings. Jerry Cowan, and Katie Mariani in one or more of them. Builders At each meeting, NCHBA services available to local HBAs and Mutual is our longstanding partner in providing the very best of members were discussed in detail along with the 2013 goals of the services to our members and these regional meetings are but the latest association. Updates on governmental affairs and upcoming events, example of BMIC’s continuing commitment to this partnership. including the 11th edition of 21st Century Building Expo & Conference and the STARS awards, were on the agenda of each meeting along As well, the Legislative Panel presentation in Charlotte was with relevant material on all 2013 NCHBA events and programs. sponsored by 2-10 Home Buyers Warranty, Piedmont Natural
Region 1
Among the major issues discussed were: association audits, tax reform, mandatory continuing education, AD&C financing problems and the building code.This discussion was followed by a presentation on BASE by Donna Girardot and Cameron Moore.
Region 2
At Region I Vice President Patrick Mann’s meeting on February 4 in Jacksonville at the Courthouse Cafe, a total of 46 people attended (36 HBA members, 7 in the traveling party: officers, staff, and BMIC, and three special guests). All 7 of the region’s HBAs were represented: Onslow Co., Brunswick Co., Craven-Pamlico Cos., Carteret Co., Kinston, Wayne Co., and Wilmington-Cape Fear HBA. Region I was one of only two regions in 2013 to garner attendance from 100% of its locals. Senate Majority Leader and NCHBA member Harry Brown addressed attendees and gave an update from the NC General Assembly. In addition, Jeff Hudson, Onslow County Manager, and Richard Woodruff, Jacksonville Town Manager, discussed how they have developed strong working relationships with the building industry. 8 North Carolina Builder
Region II Vice President Glenn Morrison had excellent participation by his local associations at the February 5 meeting at the Sunny Side Oyster Bar in Williamston. A total of 28 people, including 7 in the traveling party, attended the meeting, with five of the region’s seven local HBAs represented: Greenville-Pitt County, Roanoke Valley, Rocky Mount, Northeastern North Carolina and Outer Banks. Major issues the group discussed included: continued abuse of the “owner exception” and unlicensed contractors, NAHB dues increase, tax reform and the new lien law. Spring 2013
Region 3
In Region III,Vice President Chad Collins reported that four of his region’s eight HBAs were represented at the meeting held February 7 at The Mez Restaurant in Durham.Thirty-four people, including six in the traveling party, attended from the HBAs of Durham, Orange & Chatham Cos., Franklin Co., Raleigh-Wake Co., and Wilson Co. The second hour of the program was devoted to a presentation from Dan McFarland of Southern Energy Management. He discussed how to lower Home Energy Rating System (HERS) scores to achieve the coveted net-zero score. He also provided interesting data from the Triangle MLS on average price per square foot for traditional new homes, Energy Star homes and green homes.
Attendees discussed the upcoming NAHB dues increase, tax reform and the fact that some municipalities are charging fees that are not authorized by state laws. In addition, special guest speaker Mitch Gillespie, Assistant Secretary at the N.C. Department of Environment and Natural Resources, shared with attendees how DENR is developing a culture of customer service. He reported that under the new Governor McCrory administration, DENR intends to improve its customer service and streamline the regulatory process. Among the efforts already underway: employee training on how to deal with the public, department reorganization, new process for review of all new regulations prior to rulemaking, and a review of all standards used for wetland permits.
Region 6
Region 4
All of his region’s HBAs were represented at Region IV Vice President Ralph Doggett’s meeting February 8 at The Cutting Board in Burlington: Alamance-Caswell Counties, Greensboro BA, Person-Roxboro HBA,Vance-Granville HBA, and High Point BA. A total of 22 attendees (16 HBA members plus 6 in the traveling party) had an informative discussion on tax reform, unemployment insurance and the lien law changes. Nearly $1,300 was raised for NCBUILD-PAC at that meeting.
Six of the region’s seven HBAs were represented at the Region VI meeting, according to Vice President Brian Pace. Fortyeight attendees composed of 6 members of the traveling party and 8 legislators joined 34 HBA members from the Cabarrus Co., Charlotte, Gaston Co., Lake Norman,Yadkin Valley and the Union Co. HBAs at the meeting on February 8 at Myers Park Country Club in Charlotte. The meeting was highlighted by a legislative panel which included: Representatives Bill Brawley, Robert Brawley, Rob Bryan, Rodney Moore and Ruth Samuelson, and Senators Joel Ford, Jeff Tarte and Tommy Tucker (an NCHBA member from Union Co.). This panel responded to questions posed by Lisa Martin regarding several priority issues on NCHBA’s 2013 Legislative Agenda. These issues include enacting zoning/design and aesthetic controls legislation, regulatory reform, a recent bill that would require a 10-year sunset on all state laws, vocational education and technical training, extending the cycle of the residential building code to six years and tax reform. The panel was very receptive to NCHBA’s positions on these issues and indicated support for our efforts. The region also raised nearly $4,000 for NC BUILD-PAC.
Region 5
Region 7
In Region V, Vice President Densel Williams reported that 28 attendees (21 members plus 6 in the traveling party and 1 speaker) met at the offices of the Moore Co. HBA in Aberdeen on February 6. Three of the region’s six HBAs were represented: Fayetteville, Richmond Co., and Moore Co.
In Region VII, Vice President Rick Tozier welcomed the participation of three of his six locals: Davidson Co., Davie Co. and the Winston-Salem HBAs to the Winmock at Bermuda Run on February 7. Nine HBA members joined six in the traveling party.
Spring 2013
(See Executive VP Message on page 10) North Carolina Builder 9
Executive Vice President’s Message (continued from page 9) In the second hour, the group discussed, among other items, efforts to reform the tax code and the new lien law. Tozier arranged for Wayne Thomas of Sterling Enterprises to give a tour of the restored barns where the group met. The builders loved hearing about the architectural and engineering challenges of converting the space into a meeting area. The region collected more than $1,600 for NC BUILD-PAC.
included the results of the builder survey on mandatory continuing education; stormwater requirements; BUILD-PAC participation; marketing ideas; and a discussion of dangers to our industry arising from some of the tax reform ideas circulating in Raleigh.
Region 10
Region 8
Region X saw four of its seven local HBAs attend according to Vice President Thomas McClain. Thirty-three attendees (26 HBA members and 7 in the traveling party) gathered for the meeting February 4 at the Hilton at Biltmore Park. The following HBAs were well represented at the meeting: Asheville, Haywood Co., Hendersonville and Transylvania. Region VIII Vice President Mickey Pruitt arranged this meeting at an excellent location: the Brushy Mountain Smokehouse in North Wilkesboro. Four out of the six locals in this region attended the meeting held on February 6. A total of 19 members from the HBAs of Ashe Co., Hickory-Catawba Valley, Iredell Co., and WilkesYadkin Counties joined 6 in the traveling party for a total attendance of 25 persons. In the second hour of the program, the group discussed the impending lien law procedures, potential fire sprinkler mandates, and tax reform proposals. Nearly $1,300 was raised for NC BUILD-PAC.
Region 9
In the second hour of the program, Asheville attorney Chuck Cloninger with Ward & Smith PA gave a presentation on the upcoming lien law changes. An NC BUILD-PAC raffle was held for an iPad mini, courtesy of Pro-Build. The raffle raised nearly $800. In summary, 45 of the sixty-five local HBAs (69%) were represented at the 10 regional meetings. More importantly, however, these 45 locals represented 90% of our statewide membership. Our leadership and staff will continue to work on the issues discussed at the meetings which require our further attention. Thanks to all who attended and participated. Your participation has helped us sharpen our focus on issues important to the grassroots. Now, we hope your participation will extend to the next level: attendance at one of our upcoming state quarterly meetings. If you will come once, I promise you that you will want to come back. Specifically, make plans to attend our 2nd Quarter Board and Committee meetings on May 21 in Raleigh, which will be followed by our 2013 NCHBA Legislative Reception at the NC Museum of History. Join us the following morning as we visit the Legislative Building to lobby NCHBA’s key issues to your legislators. Register online at www.nchba.org.
According to Region IX Vice President Stoney Story, a total of 24 people attended his meeting at the Silver Creek Plantation near Morganton on February 5 (18 members and 6 in the traveling party). Members from four of the region’s local associations—Western Piedmont, Caldwell Co., McDowell, Mitchell & Yancey Cos., and the High Country HBA—were represented. During the second hour of the program, attendees discussed the upcoming lien law changes and the fact that local code officials have not been advised of their responsibilities under the law. Other issues discussed 10 North Carolina Builder
Spring 2013
Home builder website visits skyrocketing; are you converting? by Meredith Oliver, Creating WOW Communications Meredith@creatingwow.com am pleased to report that January 2013 was a very good month for home builder web traffic. Our clients saw significant increases from December 2012 in Visits, Unique Visits, Average Page Views, Time on Site and Goal Conversions (measured by Google Analytics). We expect to see a bump from December (consistently a slower month) to January, but what really surprised and delighted our clients was the year over year increase from January 2012 to January 2013. Based on these numbers it is very safe to say – housing is back! Are you ready to capitalize on the soaring traffic? What trends are you seeing? What is your plan of attack to capitalize on the changes? Please tweet @CreatingWOW using #BuildersAreBack or comment on Facebook with your thoughts.
• What other sites beyond Facebook are you using? YouTube, Twitter, Pinterest? • Do you have a blog that is tied into your social media sites and is optimized for Google search? • Are you using email marketing to drive fans to your blog and social media pages? Today’s home buyer conducts a Google search for a new home and narrows the options down to three to five homes for sale. The very next step before they call, click or come-by is to conduct a search on Facebook to research what other home buyers have to say about your company and/ or neighborhood(s). This is where you will either earn the “request for information” in the form of a call, email or in-person visit or you will lose the opportunity. With traffic soaring, don’t lose out and get eliminated because your social presence is stale, boring, negative or non-existent.
2013 Sales Conversion Checklist
Your Lead Management • Do you respond to Internet leads within minutes? • Do you have live chat in place to engage web visitors instantly? • Are you building an opt-in email list of interested buyers? • Do you have a lead follow-up process to ensure ongoing and consistent follow-up? • What percentage of your Internet leads make an appointment? Buy a home? • How often do your onsite sales agents follow-up with walk-in traffic? • Do you have a CRM to track and manage leads? Without effective lead management, marketing is a waste of time and money. Yet we fail at this most basic aspect of sales. Why? Because we don’t have the systems and tools in place to ensure success. Part automation and part discipline, lead management only happens when we plan and execute. It isn’t what we know that ensures success. It is using what we know on a daily basis that separates the top producers from the order takers. It’s time to review your sales and marketing processes, refine and re-engage. If you don’t, you are going to miss out on what we all have been waiting for — the return to normal (the new normal). We feel blessed and relieved to be around to witness it. How about you?
I
Your Website • Are your floor plan and inventory pricing up to date? • When was the last time you updated the “About Us” type content? • Do you have sufficient call-to-action to encourage visitors to request information? • Do you have fresh photos and videos to entice buyers to take the next step? • Are you tracking traffic sources in terms of Time on Site, Page Views and Bounce Rate to determine which sources provide the best quality traffic? • Are you tracking the traffic sources of your eLeads? With the right website measurement tools in place, you can fine tune your online sales and marketing process to produce more sales. Set up the Goal Conversions report in Google Analytics and track what traffic sources actually produce Internet leads. Spend more money on those traffic sources and drop the sources that fail to produce leads, have a high bounce rate, low page views and time on site. Your Social Presence • How often are you posting on your business Facebook page? • How often do fans like, comment or share one of your posts? • Is the fan base growing steadily on your social media sites? Spring 2013
Thank you 2013 NCHBA Sponsor Club Members
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Cranfill, Sumner & Hartzog LLP Lewis & Roberts PLLC Stuart Law Firm PLLC North Carolina Builder 11
What home builders need to expect from the new lien laws by Brian J. Schoolman, Safran Law Offices he North Carolina General Assembly passed sweeping changes to the lien laws during the 2012 short session. Those changes place particularly great burdens upon home builders and their subs and suppliers to keep up with paperwork, and to submit a new notice to preserve payment rights. This article highlights some of the biggest changes relevant to NCHBA members, as well as what may still be coming during the current legislative session.
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SB42: Remedies to the “hidden lien” issue? The largest and most controversial change to the lien laws came out of Senate Bill 42, a bill passed mostly as a result of pressure from title insurance companies, and aided by the banks, to address the so-called “hidden lien” problem. Title insurers claimed that they couldn’t know what liens may be coming after a closing, because the law permits a lien to be filed up to 120 days following the date of last furnishing. What they didn’t admit by this argument is that “hidden liens” are really the rightful payment claims by subcontractors and suppliers – the status of claims for many home building trades – who did not get paid for their labor and materials.
Under SB 42, any party furnishing labor, materials or services – the general contractor, subcontractors, material suppliers, architects, engineers, or anyone else having a lien right under Chapter 44A – must deliver a notice to a lien agent. The lien agent is a newly created role, and under SB 42 only title insurers can be registered as lien agents in North Carolina. The theory is that all parties who deliver notices to the lien agent will be known to the title insurer prior to a closing, thus permitting the insurer to better estimate its risk. The impact of this notice requirement is that a party who fails to give the notice can lose some or all of its lien rights. See North Carolina General Statutes Sec. 44A-11.2(k), (l). There are two situations under which a potential lien claimant who fails to give the notice to lien agent can be cut off. First, if the property is sold to an unrelated third party (such as when a home is sold to a family), any contractor or subcontractor who did not either file a claim of lien on the property or else deliver the notice to the lien agent before the deed gets recorded has its lien rights against the real property cut off entirely. Similarly, if the property is refinanced, any potential lien claimant who did not file the lien or serve the notice before the deed of trust get recorded has its lien priority subordinated to the lender. In both cases, the subcontractor loses out, and its likelihood of getting fully paid drops dramatically. The bill did provide for limited exceptions to the harsh consequences of failure to give the notice. No notice needs to be given for a contract for improvements to a single-family residence used by the owner as his residence. Design professionals are also generally excepted from the notice requirements, especially when they contract to provide services before a lien agent might be designated.The most important exception is that late-starting subs and suppliers have a fifteen-day “safe harbor” provision, whereby the potential lien claimant may still perfect its lien, even after a transfer or refinancing, as long as it provides notice to the lien agent no later than fifteen days after the first furnishing of labor or materials. Additionally, a subcontractor who has already performed its work is not required to give the notice if the lien agent identity has not been provided through the building permit, at the job site
Applications now accepted for
college scholarships
T
he North Carolina Home Builders Educational Foundation, Inc. awards scholarships based on a combination of need and merit to four-year college students entering their junior or senior year and technical school students entering their second year who have declared their major in a construction-related field.
To be eligible a student must meet the following criteria: 1. Applicants must be nominated by a NCHBA member firm. 2. Nominees shall be immediate family members - related by blood, (i.e. children, stepchildren or grandchildren). 3. Students related by marriage, (i.e. son-in-law, daughter-in-law, etc.) shall not be eligible. 4. Immediate family members of any current trustee of the foundation shall not be eligible. 5. Awards are for one year, but scholarship winners may submit a renewal application and be considered for renewal if they make satisfactory progress in their studies. 6. Only full-time students will be considered. NCHBA defines a full-time student as one taking a minimum of 12 credit hours per semester.
Deadline for entries: April 30, 2013 For a nomination form or an application packet visit our website at www.nchba.com or contact the NCHBA office at (800) 662-7129. 12 North Carolina Builder
Spring 2013
posting board, and following a written request for the information to the owner, until the owner actually responds to that request. These requirements, along with other details included in the bill, force anyone working or furnishing materials to a residential project to find out who the lien agent is, and to make sure they give notice as early as possible, to avoid the risk of losing their lien rights. The title insurers are already working on a system for handling the notices. (See sidebar).
HB 1052: Revisions Already In Effect On January 1, the key provisions of House Bill 1052, which also revised North Carolina’s lien and public bond statutes., went into effect. For the commercial construction industry, the biggest change from HB 1052 was an increase in protection for general contractors against “double payment” liability on public bonded projects. While that change largely doesn’t apply for the homebuilding industry, other revisions that do affect residential contractors have also gone into effect. On private projects, the most significant changes affect Section 44A-23, the statute for subcontractor lien rights. For projects permitted or starting after January 1, a first-tier subcontractor may use the dates of first and last furnishing of the general contractor for computing priority, as well as the deadline to file and perfect the claim of lien. This may strengthen a sub’s position with respect to priority over other claimants, and may extend the time before which the sub must file its lien claim and/or its complaint to perfect. Another change affects all subs and suppliers. Previously, Section 44A-23 required a sub to give notice of a claim of lien upon funds as a precondition to claiming a lien on real property by subrogation. Under the new statute, the claim of lien on real property may be filed without including (or even having served) the notice of claim on funds. HB 1052 also corrected the outcome from the Harrelson Utilities and Mammoth Grading bankruptcy cases, by making a notice of claim of lien upon funds immediately existent upon the date of first furnishing, rather than only after the notice is served upon the obligor. As a result, the statutes now make clear that the right to a lien on funds exists before the filing of a bankruptcy petition, and that actions taken after such a filing are only to perfect that preexisting right.
LiensNC.com makes lien law requirements simple Beginning in April, general contractors will be able to visit www.LiensNC.com to meet many of the requirements of the new lien law in North Carolina. The website, created by the nine operating title insurance companies in North Carolina, will allow: • Property owners/contractors to appoint a lien agent • General contractors and 1-,2-, or 3-tier subcontractors to file their notice to lien agent • Pay $25 fee for 1-2 family dwellings or $50 fee for other types of dwellings by credit card • Print a copy of the lien agent’s information to take with you to the building permit office. • Email a copy of the lien agent’s information to subcontractors.
Protection of Subrogation Perhaps the only good thing to come out of Senate Bill 42 is that the subrogated lien rights of subcontractors and suppliers are now more easily preserved against a lien waiver by a general contractor. Under the new law, a subcontractor can protect against having its lien rights waived by the general contractor by serving the notice to lien agent, and by serving a notice of claim of lien upon funds to the owner and to the lien agent. Those three steps, taken together, will prevent the general contractor from prejudicing the sub’s lien rights without the sub’s consent. The current session of the General Assembly may simplify the protection even further. As part of a proposal to strip commercial construction out of the requirements of the lien agent bill, AGC proposed guaranteeing a sub’s lien rights as soon as the sub files its claim of lien upon real property against being waived by the general contractor. Many of the sub and supplier groups have spoken out in support of this simplification, and are expected to push for that revision as part of the technical corrections bill that the legislature will take up before the April 1 effective date for SB 42’s revisions. For more information about these and the other lien law revisions, please go to the Safran Law Offices blog at www.safranlaw.com/ safranlawblog, or follow me on Twitter at @SafranLawBJS.
Spring 2013
North Carolina Builder 13
Builder Classic Golf Tournament to raise money for college scholarships
T
he North Carolina Home Builders Educational & Charitable Foundation will present the Builder Classic Golf Tournament April 11 at NCSU’s Lonnie Poole Golf Club in Raleigh to raise funds for scholarships to college students of HBA members majoring in a constructionrelated field. All proceeds from the annual Builder Classic Golf Tournament go towards scholarships for family members of NCHBA members. In 2012, the foundation awarded $7,000 to three college students. In these challenging economic times, these scholarships are more valuable to our members than ever. NCHBA counts on your support of the NCHBECF Golf Tournament to continue to provide this member benefit. To add another element of fun to the tournament, we will also hold the annual President’s Cup Challenge. This challenge is a “tournament within a tournament” for teams with current and past presidents of any level of the federation. Teams with local, state or national presidents will compete for bragging rights and the coveted trophy to be awarded at the 2nd Quarter Board Meeting.
April 11
9:00 a.m. shotgun start
Lonnie Poole Golf Club Raleigh, NC $100 player, which includes green fees, cart fees, beverages, and lunch
Sponsorships Available In addition to playing in the tournament, sponsorships are available to help raise funds for the scholarship program. • Hole Sponsors—Includes a sign at the hole of your choice and a company representative at the tee box to meet golfers. $250/hole • Green Sponsors—Includes a sign at the green of your choice. $100/hole • Door Prizes—Help us thank our golfers for their support with a door prize donation. Examples include gift cards, weekend getaways, golf equipment, tools, small appliances, etc. • Goodie Bag Items—Each golfer will receive a goodie bag to thank them for their support. Examples include tees, golf balls, koozies, hats, fans, towels, etc. We ask that you consider a donation of 100 of each item. • Registration Desk Sponsor—Greet players as they check-in for the day. Includes a sign at the registration desk. $250 (one available) • Beverage Cart—Sponsor the ever-popular beverage and snack cart that circulates the course during play. $750 (one available) Contact Deborah Alford at dalford@nchba.org or 1-800-662-7129 for more information about the golf tournament, scholarship program or sponsorship opportunities.
for your future
AN
or contact the NCHBA office at 1-800-662-7129.
21st Century Building Expo & Conference
INVESTMENT
Download a registration form at www.nchba.org
Presented by the NCHBA
14 North Carolina Builder
Conference:
September 17 – 19, 2013 Exhibits:
September 18 – 19, 2013 What’s Your ROI? • Strategies to generate sales • Be the first to see new products & services • Design trends & consumer preference data • Valuable industry knowledge through education • Earn professional designations
www.21BuildingExpo.com • 1-800-662-7129 Charlotte Convention Center, Charlotte, NC Spring 2013
Top 10 NCHBA actions to benefit our members in 2012
1.
Supreme Court Rejects “Pay-to-Build” Adequate Public Facilities Ordinance (APFO) in Historic Ruling—On October 26, 2012, the Supreme Court of North Carolina rejected the petition by Cabarrus County seeking it to rehear its earlier, historic August 24 decision in the APFO litigation, which struck down APFOs on the basis that Cabarrus County lacked the specific legislative authority to do so. By rejecting the county and local government association’s arguments seeking a broad reading of the general zoning power, the Supreme Court’s opinion calls into question the continued validity of a wide variety of local ordinances enacted on that basis. COST SAVINGS: Just in Cabarrus County alone, the currently pending refund case for APFO fees paid exceeds, with interest, more than $6 million; the TOTAL COST SAVINGS arising from NCHBA’s successful litigation campaign is literally in the hundreds of millions of dollars, as these illegal funding schemes were quickly spreading across the state.
2.
Continued to Lead Effort To Make Solving The AD&C Credit Crisis NAHB’s Number One Priority— At the NAHB Fall Board Meeting in 2010, NCHBA led a successful effort by a coalition of states to get this resolution enacted by the NAHB Board of Directors. In response, NAHB drafted H.R. 1755 (Home Construction Regulatory Improvement Act of 2011. In 2012, we continued to participate in a strong NAHB grassroots effort that has produced broad bi-partisan support, with currently 112 House cosponsors and a companion bill in the Senate. No COST SAVINGS intended; instead, the goal of this effort is to unfreeze credit so that our builders can survive.
3.
Assured Continued Availability of Title Insurance in North Carolina—The enactment of HB 42 (Mech. Liens/Pvt. Lien Agent), which becomes effective 04/01/13, averted a crisis in the availability of title insurance in NC when the leading title insurers threatened to discontinue coverage unless the lien law was reformed. Both the title companies and the legislative leadership credited NCHBA with playing a key role in defusing an impending crisis. While it is far from a perfect bill, we are pleased that we were able to help craft legislation that maximizes practicality and minimizes the burden for our members. COST SAVINGS: Difficult to quantify, but the loss of title insurance would have stopped all real estate transactions and devastated the fragile statewide housing recovery.
4.
Residential Building Permit Crisis Averted by Online Posting of New Code—When it became apparent new code books would not be printed in time to meet the 03/01/12 deadline for the effective date of the new residential building code, several local jurisdictions across the state announced that they would begin withhold building permits (including several of our state’s largest jurisdictions). NCHBA worked closely with the Governor’s Office, the legislative leadership, and the Department of Insurance to find an alternative which would avoid this unacceptable result. Through those efforts, the publisher agreed to put the new code online, which averted this crisis. COST SAVINGS: Difficult to quantify, but if building permits had been withheld until the printed books arrived several weeks after the deadline, it would be fair to estimate that the cost would have been in the hundreds of thousands, if not millions, of dollars.
Spring 2013
5.
Worked With The NCLBGC To Enact Alternative “Net Worth” Test—In order to demonstrate financial responsibility for initial licensing or license renewal, general contractors were required to show working capital (i.e., cash), which varies by license classification. With respect to the limited license classification, this requirement was $17,000. At NCHBA’s urging, the Board adopted an alternative test of “total net worth” in the amount of $80,000, which now permits limited licensees the opportunity to satisfy the standard by either method. Given our recent economy, this alternative will provide useful to those who do not have cash but can demonstrate net worth. This rule becomes effective on 04/01/13 and if it proves successful, NCHBA intends to pursue a similar alternative for the intermediate and unlimited classifications. COST SAVINGS: Difficult to quantify, but would be priceless to any applicant or licensee who obtains or keeps his or her license if unable to satisfy the earlier test.
6. 7.
Continued to Lead Business Coalition to Clarify and Strengthen Reform of Workers’ Comp Laws; Led Business Coalition in Enactment of the Regulatory Reform Act of 2012—COST SAVINGS: Millions of dollars to our members, other employers, and to the public. Began Effort to Reform NC’s Unemployment Compensation System and Repay $2.5 Billion Dollar Debt—COST SAVINGS: If the reforms we have proposed are enacted, they will save NC employers millions of dollars in the future; however, in the short run, this debt must be repaid which means higher FUTA and SUTA taxes.
8. 9.
Continued to Play Prominent Leadership Role in NAHB—See article page 6.
Conducted Scientific Survey of Builders on Mandatory CE Proposal—One of Erik Anderson’s 2012 goals, and that of our current NCHBA Strategic Plan, was to determine if sufficient support existed among our licensed general contractor/builder members for NCHBA to pursue legislation which would mandate continuing education as a requirement of license renewal. The survey, conducted by a well-respected, national polling firm, showed that 43% of our membership is in favor, 46% are not in favor, and 11% have a mixed opinion.
10.
Assured NCHBA Fiscal Integrity and Provided New Member Benefits—Despite difficult times, NCHBA continued to offer vital services to its members while cutting costs and increasing revenue.We finished 2012 in the black, thereby wiping out the 2012 approved budget deficit of $197,966. A balanced 2013 budget has been submitted. NCHBA introduced an endorsed Member Rebate Program which has paid nice dividends to builders who have enrolled in the program and submitted proof that they utilized qualified products. North Carolina Builder 15