Air Date: 2-24-2012| Episode: 237
Cross & Associates is the nation’s leading law firm advocating for the interests of the cleaning and restoration industries. Edward H. Cross has represented over 50 cleaning and restoration companies across the country...
Cross & Associates is the nation’s leading law firm advocating for the interests of the cleaning and restoration industries. Edward H. Cross has represented over 50 cleaning and restoration companies across the country. He has obtained trial court victories on behalf of cleaning and restoration companies, successfully resolving over 1,000 disputes and recovering many millions of dollars. He was a key contributor to the IICRC’s published standards for professional water damage restoration and mold remediation. Known as “Restoration Lawyer,” Ed has given over 75 invited presentations to RIA, CFI, Connections and other national groups. He has published over 35 articles on legal issues affecting the cleaning and restoration industries. He is the director of the Restoration Industry Defense Alliance (RIDA), the author of the “Restoration Lawyer Newsletter” and “Standardized Contract Forms for the Cleaning and Restoration Industries,” and the Moderator of the Restoration Law Group on LinkedIn.
Ed Cross, Esq.
Ed Cross, the “Restoration Attorney” was today’s guest on IAQradio. As the insurance repair industry evolves and becomes more sophisticated their clients have kept up. Contractors are at growing risk of being sued and/or not being paid for their services. On an annual basis, insurance restoration contractors are been screwed out of millions owed to them for satisfactory work by innumerable unscrupulous property owners and their attorneys. While many attorneys are struggling to find clients, Ed Cross has built a successful law practice that specially caters to the needs of insurance repair contractors and remediators.
Nuggets mined from today’s show:
· Be aware of industry best practice, follow the requirements for contractor’s documents and administration as spelled out in Clean Trust industry standards.
· Use a uniform paper flow system for contract documents.
· Train employees in the firm’s uniform method for how employees present contracts to clients.
· Less is more with contract documents, documents should be short easy to understand. Long, complex documents in legalese are more at risk for fraud allegations.
· Recommends the use of a Service Contract not a Work Authorization. Work authorization is like playing football in sandals. Allows contractor to be on the premises, doesn’t specify how much and how he is going to be paid.
· Change Orders are misunderstood and misused. A Change Orders isn’t an admission of a contractor’s mistake or an oversight but rather demonstrates the contractor’s conscientiousness and monitoring of the site work.
· Get as much cash as possible up front. Residential projects are the most regulated, there may be a legal limit on how much upfront
· Develop a company policy mandating consistency and uniformity of responses to common business and contractual questions.
· Direction of Payment request is weak. Assignment of Benefits is strong, puts contractor in the policyholders shoes, and provides a very strong claim on all the money due the contractor for their work on the projects.
· Advocates the use of “upfront lump sum fixed price contract”, with agreement for a more detailed inspection and price adjustment to follow several days later so that the success of the emergency work can be evaluated.
· Recommends having a 3rd party perform risk management by randomly pulling company service work files and examining them and trying to reconstruct: the who, what, where, when and how?
· Indoor environmental professionals providing consulting services are often in a treacherous legal position. It’s advisable that an IEP’s contract documents include limits of liability and indemnification against contractor’s errors. While IEPs may observe problems, the IEP isn’t performing the remedial work, contractors and property owners may choose to ignore their recommendations and have limited control over the project outcome.
· Mortgage companies withholding claim proceeds. Case law has established the value of repairs, supporting that equity and fairness were more important than unjust enrichment, legal principle of replevin. In creditors’ rights law, replevin, sometimes known as “claim and delivery,” is a legal remedy for a person to recover goods unlawfully withheld from his or her possession.
· Either contractor or property owners attorney may bring in a 3rd party consultant/expert and not disclose this to the opposition under attorney client privilege.
Contract documents are an important business tool worthy of a financial investment.
Today’s Music: Drum solo by Ed Cross
Z-Man signing off