Mastering Contracts, New Home Purchase Agreements, Property Insurance Claims, and Business Transition (4-Hour WI Legal/Business Course)

Handouts

Faculty

Bill Gschwind Related Seminars and Products

Principal Attorney

Minnesota Construction Law Services, PLLC

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Bill started Minnesota Construction Law Services in 2012 focusing on residential construction and small business law providing legal and business services to residential contractors and other owner-operated businesses. He became a lawyer after more than 25 years in the business world to bring common sense and business principles to the implementation of legal services for the construction industry.

Stephen Yoch Related Seminars and Products

Felhaber Larson

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Stephen has extensive transactional and litigation experience which allows him to assist builders and developers in evaluating all the alternatives when facing legal challenges. Steve is a highly rated speaker and an award-winning writer. He is a member of the Felhaber Larson Board of Directors, and he currently serves as Chair of the Business and Real Estate Section of the Firm.

Courtney Ernston Related Seminars and Products

North Star Law Group, PLLC

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Courtney Ernston is an attorney with North Star Law Group PLLC. She graduated from the University of Minnesota with a BA and then received her JD from the University of Oklahoma College of Law. Previously, Courtney worked for Minnesota Construction Law Services having joined in 2017 and becoming a partner in 2020. Courtney focused on immigration and small business law. She grew up in the family construction business and served as general counsel. Courtney is a graduate of the National Institute of Trial Advocacy advanced litigation program, among the most respected programs in the country, and is an adjunct professor at Mitchell-Hamline College of Law teaching business organizations. Courtney was named a 2020 Up and Coming Attorney by Minnesota Lawyers and named by Super Lawyers to the 2020 Minnesota Rising Stars List. She was also awarded 2023 Rising Star by Housing First Minnesota. What makes Courtney so effective is she knows when a problem can be solved without the difficulty of litigation because sometimes the practical solution is not the legal solution.

Patrisha Garger Related Seminars and Products

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Pattie Garger, attorney at law, brings a unique perspective and unwavering dedication to her clients and her practice. 

From the start of her legal career, Pattie immersed herself in the intricacies of the construction industry. She began by working for a roofing contractor, handling storm damage claims, and later transitioned to managing property damage claims involving fire, water, smoke, mold, and vandalism. Her experience extended to coordinating services with property management companies, providing her with invaluable insights into the challenges faced by restoration contractors, subcontractors, and property managers.

As a respected voice in the industry, Pattie served on the board of a property insurance adjuster association, as the representative of over 400 vendors who provided a plethora of services related to first party property damage insurance claim handling. Additionally, she dedicated over three years to educating insurance professionals through Continuing Education presentations, covering topics related to claim handling and ethics. Pattie's passion for knowledge led her to create and coordinate a continuing education program tailored specifically to address property insurance issues.

A member of both the Minnesota State Bar Association and the Hennepin County Bar Association, Pattie is deeply committed to serving her community. She actively volunteered in the Street Law program through the Minnesota Justice Foundation during  law school. Pattie serves as a volunteer attorney for Volunteer Lawyers Network handling eviction matters and provides limited pro bono services to small businesses through Legal Corp. Her dedication to advocacy extends beyond her legal practice, as she has been a champion for child advocacy and those who cannot speak for themselves.

With a background rooted in the construction industry, her impassioned, compassionate, tenacious, and determined approach resonates with general contractors throughout Minnesota. 

Course Details

Mastering Contracts: Your Key to Contractor Success

It’s called Contracting for a reason. Nearly every part of the project is governed by a contract. As a licensed contractor, you’re required to have a written contract with your customer. For most of you, the specialty trades are performed under a contract. For many of you, most if not all of the trades are performed by folks who are not employees; those relationships need to be governed by a contract. Most general contractors in the residential area spend less time building and more time coordinating performance under a contract. This course pulls back the curtain of the contract to take the mystery out. Rather than some mysterious legal document meant to protect you, you’ll discover that every contract, just like the projects it governs, has a similar formula – the step-by-step set of instructions for building a successful project.

This course breaks down the parts of and explores the importance of using contracts. This course helps attendees understand the benefits and protection contracts provide. In addition, this course will explain the customization options for project-specific contracts.

Course Outline:

• Introduction
• What is a Contract
• What does a contract do
• Terms every contract should include
• Contracts - What is required in Wisconsin
• Contracts - What is required in Minnesota
• What templates should be in your suite
• Conclusion

Learner Objectives:

• Learn why the contract is more important for a successful project than the plans and specs
• Recognize the magic words every well-drafted contract contains and how to use them
• Know the magic words required in a customer contract for a licensed contractor  
• Recognize the benefits, and dangers, of a “One-size-fits-all” contract template
• Identify contract templates you should have in your library and when to use them

Happy Trails: Retiring, Transferring, or Selling Your Construction Business

This course takes builders through the process of retiring, transferring, or selling their construction business. This course is useful for those planning to do so in the near future and provides important things to know now to plan ahead for the distant future. An understanding of builders’ obligations and careful planning can result in a successful business transition and avoid future problems.

Course Outline:

• WHAT DOES SELLING MEAN?
  • What About Letters of Intent?
  • Asset Sale.
  • Stock Sale.
  • Seller Financed versus Cash Deal versus Payout Over Time Based Upon
  • Performance.
  • What is an ESOP?
• GETTING YOUR HOUSE IN ORDER.
  • Good Financial Statements.
  • Nailing Down Your Key Employees with Contracts.
  • Having All Your Contracts in Good Order.
  • Sale of Real Property.
  • Leasing Back Property.
• TO WHOM DO YOU SELL?
  • Internally – Having a Good Internal Transition Plan.
  • Selling to a Competitor.
  • Closing the Doors and Selling your Assets.
  • Business Only Has Value If It Can Run Without You.
  • Investment Bankers.
• CONTINUING LIABILITY.
  • Statute of Limitations in WI and MN
  • Guarantees and Lines of Credit.
  • Tail Insurance Coverage.
  • Under Funded Pension Liability (Usually Only a Union Issue).
  • Maintaining Company in Good Standing After Sale.
• ACTUALLY SELLING THE COMPANY AND TRANSITION.
  • Expectations For Documenting the Sale/Attorney’s Fees and Costs.
  • Transitioning.
  • Reporting to WI Department of Workforce Development (DWD)
    • WI Statutes Section 108.16(8)(k)
    • WI Report of Business Transfer Form UCT-115‑E
  • Reporting to MN Office of Secretary of State

Learner Objectives:

• Describe the process of transferring or selling a construction business
• Identify how to limit liability while meeting obligations

New Home Purchase Agreements - MN Realtors and WI Real Estate Forms

A course designed for new home contractors and realtors to discuss the pitfalls of using template contracts. The main focus is on the WI and MN realtor template contracts and the statutory forms.

Course Outline:

• Working with a Realtor
• Required vs. not required Real Property Disclosures
  • WI should fill out the “Statement Regarding Condition or Disclosure Report”
  • Wi. Stat. 709.02 governs required seller disclosures and MN Stat. 513.52-513.61
  • Well Disclosure
  • Sewage Disclosure
  • Airport Zoning
  • Predatory Offenders
  • FIRPTA Disclosure
• Required vs. not required construction disclosures
  • WI Adm. Code 110.025
  • WI Right to Cure
  • WI Right to Cancel 423.203
  • Notice of all required permits
  • Pre-lien notice
  • Description of work and materials
  • Notice of Consumer’s Right to Receive Lien Waivers - WI Adm. Code 110.02
• Common issues with Realtor Purchase Agreements
  • Wisconsin
    • Price
    • Closing Date
    • Property Conditions
    • Pre-Closing Walkthrough
    • Possession
  • Minnesota
    • Price
    • Closing Date
    • Modifications
  • Possession
  • Commence of Construction
• Contingencies
  • Mortgage Financing
  • Sale of Buyer’s Property
  • Previously Executed PA
  • Price Protection
• FYI clauses/what’s missing
  • Detailed process for change orders
  • Substantial completion definition
  • Clause for reasonable delays/good faith estimate
  • Attorneys’ fees clause for Buyer default

Learner Objectives:

• Why template contracts are not best for your business.
• What is included in and missing from statutory contracts.
• What clauses to include to best protect your business and your customer relationships.

Property Insurance Claim Handling Overview

This course explores property insurance claim handling and helps students understand the difficulties of claim disputes. In addition, this course will explain the roles of the insurer, the insured, and the contractor while handling insurance claims.

Course Outline:

• Introduction/Background
• Overview of Property Insurance Claims
  • Claim data overview
  • Increased Risks and Increased Claim Expenses for the Insurer
    • Larger losses/more catastrophes
    • More damage
    • Rising labor and material costs
  • Insurance claims are becoming increasingly difficult
    • Reduced coverage
    • Restrictive coverage
    • Higher deductibles
    • More demands on the Insured
• The Policy 
  • The contract
  • Insurance company obligation: “We will pay for direct physical loss or damage to covered property located on the insured premises caused by or resulting from a covered cause of loss.”
  • RCV v. ACV
• The Claim
  • Notice of the claim
    • Timing
  • Proof of Loss
• Handling the Claim
  • The Insurer’s Responsibility
    • Investigate
  • Property Insurance Landscape
    • Wisconsin
    • Minnesota
  • The Insured’s Responsibility (WI + MN)
    • Provide Notice
    • Prove their Loss
    • Duty to Cooperate
      • Inspections
      • Provide Proof of Loss
      • Settlement of the claim
  • The Contractor’s Responsibility
    • Provide an estimate of scope of work needed and price for the work
    • NOT A PUBLIC ADJUSTER!
    • Supplements 1. Upgrades are NOT supplements
    • Provide an invoice
• The Construction Contract 
  • The Initial Contract
    • Terms
      • Scope
      • Price
    •  Cancellation (72 hours after claim denied)
  • Contract Updating a. Agreed upon price/scope
  • CHANGE ORDERS
• Claim Disputes
  • Matching (Effect of Cedar Bluffs case)
  • Harvesting siding (Elm Creek case)
  • Code Compliance (St. Matthews Church case)
  • “Cosmetic” damage
• Appraisals
  • Parties to the appraisal are the insured and the insurance company
  • Contractor is not the expert
• Takeaways
  • There is typically a deadline in your insurance policy for filing a lawsuit related to a claim.
  • Insurance claims exist but are becoming more difficult
  • The Insured and Insurer both have a responsibility
  • The Contractor is there to support the homeowners
• Wrap-Up

Learner Outcomes:

• Gain an understanding of how a contractor can help its customers who experience property insurance damage claims
• Compare the landscape of property insurance claims in Wisconsin and Minnesota.
• Become familiar with policy terms, conditions and the policy obligations
• Determine the contractor’s role in claim handling
• Learn how recent court decisions impact the way contractors can perform repairs.
• Identify the appraisal process