19 Jan Miami developer sues Moriarty for $3M on delayed Boston high-rise
Today’s topic comes from an article from Construction Dive titled “Miami developer sues Moriarty for $3M on delayed Boston high-rise”
The Three Million Dollar Lawsuit
According to Construction Dive article, a Miami developer is suing John Moriarty & Associates for failure to complete construction of a 22-story luxury tower apartment and retail building on time. According to the complaint filed, the project was initially scheduled to complete by November 2019, but around August 2019 it became apparent that the contractor would not be able to finish on time. It was then agreed that the project would be completed in January 2020, but even with the extension it was still not completed on time.
The delay resulted in approximately $4.9 million in lost revenue. Due to the delay many tenants chose to cancel their leases. The developer in their lawsuit is placing the blame on the contractor and their “inability to properly and timely perform its work”. They are currently seeking the recovery of $3 million in contractually specified liquidated damages, as well as costs resulting from the contractor’s failure to timely complete the project.
What is the Biggest Problem here?
There is not a lot of information given around the context and details of the project. All that we know is that a lawsuit is being filed—but this is not a telltale sign of what is happening. The only obvious problem is that this project had a poor tracking system. The project was initially scheduled to be completed in November, yet the client claims in August it was “apparent” that they would not complete on time. After moving the date back to January, the client was still surprised the project was not completed on time. We can blame both sides for different factors, but there is no clear documentation showing who or what had caused the delay. Either way, the fact that the client was surprised only two months before completion in November and then again in January, is a red flag of a poor tracking system. In general, if a good tracking system was in place, there should never be a surprise. If there was a delay it would have been recognized far in advance.
Potential Ways to Avoid this Problem
When proper project tracking occurs, there should be two main activities. The first is a clear milestone schedule [which correlates to a full detailed schedule] agreed on at the very beginning of the project. The milestone schedule should be non-technical and simple, meaning any client stakeholder could easily see the progress and status of the project. The second is a weekly project tracking system which reports to all stakeholder on a weekly basis the current status of the project. If any delays occur to that schedule they are immediately identified with the reason of the delay, the impact and who caused the delay.
If the client had this simple milestone schedule and weekly updates, there could be no surprises. For example, if the project was already delayed earlier that year, the contractor would have already reported to the client the number of days they could expect to be delayed. Not only that, even if the contractor didn’t notify the client themselves, the client would be able to see by milestone deliverables that the contractor is not on track. At that point unless given a simple reason by the contractor in how they would make up the time, the client would know there would be delay. And they would know months in advance, instead of in August, two months before the completion date, when they claimed to notice a delay would happen.
Additionally, with the proper tracking, the client could see in real time who was causing the delay on the project. If someone other than contractor was causing the delay (which is a common occurrence), then they wouldn’t have to spend any the money in litigation suing the contractor. By knowing who and what is causing the delay, client can stop future delays caused by those stakeholders and further minimize the current delay. If it really was the contractor’s fault, the documentation would be clear and there would be no need for litigation, the contractor would have to pay.
It is a possibility that there was no way for the contractor to avoid the delay due to reasons outside of both the contractor and client’s control. Even then, knowing what is causing those delays is still important. If the client had known earlier, they could have been able to notify lease holders sooner on the real move in date. This way even if some of the tenants chose to back out there would still be sufficient time to find new tenants to replace them, minimizing lost revenue.
Conclusion
There is not enough information to know all the problems behind this project. But a clear improvement needed is a better tracking system so surprises and the need for litigation like this don’t happen. When a project gets to the point of litigation, no one wins, and time and money is wasted on lawyers and arguments. At a minimum, with a good project tracking system, these non-value-added activities would be eliminated due to the transparency provided.
A Proven Project Tracking System
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