Owner vs. Contractor Duties in a Construction Contract Construction contracts are the blueprint of a successful project. They are generally executed between the project owner and the general contractor and define the scope, terms, and conditions of the agreement. Below is a general overview of the owner vs.
Identifying and obtaining the required resources. This includes a competent and skilled workforce for all necessary specialized and general tasks, a sufficient supply of construction materials, and all required equipment. Setting and following the project schedule and budget. If either one needs to be adjusted, the contractor must communicate with the owner. Addressing all legal and regulatory requirements and issues. This includes obtaining all necessary permits before construction begins. Supervising, directing, and inspecting the project from start to finish, to ensure success as defined by the construction agreement. Ensuring that the project complies with all of the specifications in the contract documents. Implementing a reliable and consistent communication strategy between all stakeholders. Ensuring occupational health and safety on the construction site, This includes effective risk management strategies, hazard communication programs, and preventive safety measures.
Owner’s Duties The project owner has an implied duty to cooperate with the general contractor and refrain from acting in ways that interfere with or intentionally delay the contractor’s work. Other duties include:
Warranting the plans, specifications, and any owner-furnished building materials, This includes bearing responsibility for any inaccuracies or defects. Ensuring adequate funding for all payables. This includes reserve funding for any legitimate change orders. Paying the contractor after the receipt of each invoice, either within the time period specified or in accordance with applicable statutes. Providing all necessary site surveys needed for proper installation of the work, This includes accurate locations of all existing utilities like phone lines, sewer systems, and storm lines. Obtaining and paying for easements so that the contractor has access to the site. Obtaining all required agency approvals and complying with building code requirements so that the contractor can obtain a building permit. Disclosing any superior knowledge that directly or indirectly relates to the work, This could include unavailability of a specific building material or soil condition issues that could impede progress. Providing clarification and reviewing change orders promptly in order to minimize any impact on the construction schedule.
Essentially, both the owner and contractor are legally obligated to act in good faith during the performance of their contractual obligations. This includes cooperating with one another and keeping an open line of communication for the duration of the project.
A properly-drafted construction contract makes it possible for owners and contractors to work together to achieve time, budget, and quality objectives. Contact a Construction Law Attorney At Rosen Law, LLC, our draft contracts that cover a multitude of project types, from residential developments to office skyscrapers and vast, multi-unit retail complexes.
Our industry knowledge and experience helps clients navigate issues and resolve challenges in these construction projects in order to support a successful outcome. For more information, please us today. : Owner vs. Contractor Duties in a Construction Contract
- 1 Who is the main role player in the construction industry?
- 2 What are owners responsibilities?
- 3 What is the role of an owner in a project?
- 4 What is the head of a construction team called?
- 5 Who is the risk owner in construction?
- 6 Who controls a construction site?
- 7 Why is it important to be an owner?
- 8 What is the position of owner?
- 9 What is the role of manager and owner?
- 10 What are contractors responsibilities?
What are some of the important responsibilities of the contractor to the owner?
General Responsibilities of a Building Contractor – In general terms, a contractor is responsible for planning, leading, executing, supervising and inspecting a building construction project. The responsibility extends from the beginning to the end of the project, regardless of its scope.
Who is the main role player in the construction industry?
The Contractor: – The Main Contractor oversees and manages the construction of the building for the Client, following the Architect and Engineers’ designs. The work is delivered under a contractual agreement. The Main Contractor will select specialist sub-contractors based on their capability, availability and price.
If a project is Design & Build, the Contractor will be directing the Engineer and Architect’s product selection. They will have in-house decision makers interpreting the Client’s needs and briefing the specifiers. They need to know that building work will not be delayed by lack of product availability and that product cost remains within the estimate, so they can remain profitable.
The manufacturer needs to demonstrate how selecting their product can help the contractor meet challenges such as:
Achieving project schedules Meeting client needs Remaining profitable
What is the role of the business owner concerning risk?
The owner has the ultimate responsibility for identifying, analyzing, mitigating, and controlling project risks, including acceptance of the project risks, or modification, or termination of the project—all of which are project risk management activities.
Who is involved in the construction of a building?
Introduction to Construction Project Team – Building Teams in Construction The construction of a building involves many people: Architects; Designers; Engineers; Contractors; Sub-Contractors all working together to meet the needs of the Client. These construction professionals are brought together for a specific construction project and then disbanded once construction is complete.
What are owners responsibilities?
What does a Business Owner do? – The Business Owner plays a strategic role and is not engaged in the day-to-day activities of managing the service. Rather, they focus on the big picture. They define the vision and roadmap. They have the knowledge and authority to make strategic decisions and clear the path of political and financial obstacles.
What is the role of an owner in a project?
Project Roles & Responsibilities › › › › Project Roles & Responsibilities A successful project requires the project team to participate (at some level) in the planning process, buy-in to the project plan, and be responsible for completion of assignments.
It is important to have a defined formal structure for the project and for the project team. This provides each individual with a clear understanding of the authority given and responsibility necessary for the successful accomplishment of project activities. This section describes the typical roles and responsibilities for projects.
The Construction Project Team: Roles & Responsibilities Of 9 Key Staff Positions
Roles may be assigned to one or more individuals. Conversely, individuals may have one or more roles on a project. Project Sponsor – The Project Sponsor is the executive (AVC or above) with a demonstrable interest in the outcome of the project and who is ultimately responsible for securing spending authority and resources for the project.
Oversee high-level project progress Provide input to and approval of the project charter Provide and approve project budget and resources. Approve any project change requests Champions the project to provide exposure and buy-in from senior management. Approve the project completion.
Project Manager – The Project Manager is the person assigned by Information Technology Division to ensure that the project team achieves the project objectives and completes the project. The Project Manager develops the project charter and plan with the team and manages the team’s performance of project related tasks.
Develop, monitor, and review project management deliverables and activities within the project plan Communicate to and receive feedback from the project team Escalate and resolve issues as needed Initiate project meetings in consultation with project team and sponsor Develop project and implementation plans Prepare deliverables for approval by stakeholders Schedule and track resource Communicate project status to Project Sponsors and stakeholders
Project Owner – The project owner is typically the head of the business unit that proposed the project or is the recipient of the project output or product. The project owner bears the business responsibility for successful project implementation. The Project Owner will:
Assist the project manager in providing leadership for and managing the team’s performance of project activities Acts as a “champion” for the project, in partnership with the project sponsor. Assist the project manager in providing leadership towards the completion of project tasks. Actively encourage buy in from other project stakeholders
PMO Director – The Project Management Office (PMO) Director supports the Information Technology Division’s commitment to a more structured project planning process. The Director helps the IT Division select the right projects and supports their successful implementation through planning, project work, and oversight.
General Project Management questions and advice Facilitation of project planning, project kickoff, reviews, and lessons learned sessions Project Management training, mentoring, and consulting Service Now technical support (online Project Portfolio Management (PPM) platform) Project Portfolio oversight, reporting, and escalation
Functional Director – The Functional Director is responsible for providing resources (both people and equipment) as needed according to the project plan. They may also function as a Subject Matter Expert and provide oversight and guidance for the project.
Service Owner – The Service Owner is accountable for a specific service (Infrastructure, Application or Professional Service) within the organization regardless of where the technology components or professional capabilities reside. Subject Matter Expert (SME) – The Subject Matter Expert is that individual who has a high level of expertise in performing a specialized job, task, or skill within the organization.
Project Managers need to work with SMEs in the research and execution phases of a project and should involve them in the technical validation of project charters and plans. Project Team – The Project Team has responsibility for conducting project activities.
Project Team members, as necessary, assist the Project Manager in planning the development effort and help construct commitments to complete the project within established schedule and budget constraints. The Project Team may include the subject matter experts responsible for implementing the project solution.
Customers and/or Stakeholders should interact with the Project Team to ensure that requirements are properly understood and implemented. The Project Team may include both UMass Boston staff members and external Consultants brought on for the project engagement.
Who is the head of the construction team?
Project manager : The project manager is in charge of the project team.
What is the head of a construction team called?
Construction foreperson Job duties: A construction foreman leads the work crew. They are responsible for managing employees and overseeing daily productivity.
Who is the team leader in building construction?
Construction team leaders work in supervisory roles and are generally in charge of a team working on a construction project. As a construction team leader, you may specialise in overseeing a particular area of construction, relating to your previous skills and experience, such as bricklaying, roofing or another trade.
Who is the risk owner in construction?
Risk ownership in project management – The term risk owner refers to the individual responsible for identifying, assessing, and mitigating risks. While risk management is a team effort, the risk owner plays a vital role in ensuring that potential threats are identified and addressed in a timely manner.
What are the responsibilities of management to owners of business?
Roles, Duties And Responsibilities Of A Business Owner And Manager Small businesses need time to get established. The effort that goes into making a small business transform into a large enterprise is not easy. The contribution of the business owner and manager is crucial.
- They are the directors of the employees and correctly lead the business.
- So, it is vital to understand the on-job responsibilities and all other unsaid duties that every business owner and manager is expected to perform.
- The answer to this question is tricky.
- Why? Because the practicalities of the business conditions, operations and size matter in defining what the roles are.
A small business owner may have to perform anything and everything to run the business. In contrast, the owner of a large-scale business may only supervise certain business areas. So, it is tough to define the roles and responsibilities of a small business owner or manager accurately.
A manager actively helps in setting goals and objectives for the business.A business manager plans and deploys the resources to help in implementing the plans into action.Coordination and supervision are two key-activity areas of a business manager to bring out the best productivity. Derive plans and strategies to improve the efficiency of the employees working in the company.
Besides these, a business manager needs to evaluate the existing business operations and give constructive feedback. A manager in a small business also needs to adhere to the regulations and legal norms, as there may not always be a separate department to review the compliances.
Strengthening the company for future development : A small business owner or entrepreneur is the captain of the business and decides the course of development. Future expansion, planning and everything depend on the analyzing power and vision of the business owner. The owner decides the best path to follow to upscale the business and develop a strategy for operations.
Managing the employees and recruitment : For small businesses, developing the company’s strengths is a crucial task. It depends on recruitment and employee management. The owner acts as the HR-department supervisor in structuring the best ideas for ensuring optimal productivity. Thus, if you are a small business owner, you have to perform most of the duties that are usually the task of the HR manager –
Designing employee policies
Payroll structuring and recognition programsManaging workplace safety and staffingDesigning employee benefits and welfare programs
Taking care of financial matters : Business owners during the initial stage of developing their small business into a large enterprise have to oversee the finances. They supervise the fund management to ensure optimal utilization of the limited resources.
Starting from finding investors to how to utilize the funds, the business owner manages it all. A small business owner also plans the budget and keeps the account records to ensure transparency in all financial transactions.
Analysis, planning and decision-making : All business decisions are taken by the business owner or manager. In small businesses, the owner performs the duties of the business manager and thus sets the goals for operation and business expansion. They help in creating a plan that will help in generating the best revenue and profits in the long run.
Planning and strategy for business: Business operation requires proper planning and strategy. Deploying resources and assigning separate tasks to the employees is also a part of the duties of the owner. Besides that, analyzing the best market strategies and competitor moves is an essential job that the owner needs to perform diligently. It is the only way to stay one step ahead of the competitors and cope with the dynamicity of the business operations.
Daily monitoring and operation : Checking on the employee performance, operational productivity and efficacy of the operation strategies on a day-to-day basis are also responsibilities of the owner. It helps the business owner stay proactive about the shortcomings. They can easily recognize the operational risks.
Marketing decisions and sales strategies : A business owner is also responsible for creating marketing strategies for sales increment. Small businesses do not have sufficient funds to manage the need for maintaining a separate department to review these business aspects. Hence, the owner has to meet the responsibilities and develop marketing plans for boosting sales.
Supervise customer services and policies : Ensuring an overall satisfactory customer service experience is also a duty of the business owner in a small enterprise. From developing client-oriented service policies to reputation management, a business owner has to cover it all.
All the discussed duties and responsibilities of a manager of a business or the owner require a clear vision that aims at resolving dynamic problems arising in the operations. Communicating with employees to ensure the best working environment for them to review the ways to amplify the sales, everything depends on how well you can blend all the responsibilities and carry them out efficiently.
Work for the business and as part of the business to grow the small endeavour into a large-scale enterprise. Every responsibility of the business owner or manager is crucial for growth and needs a diligent approach. Do what the business necessitates and put your efforts to transform your business into a reputable brand in the long run.
: Roles, Duties And Responsibilities Of A Business Owner And Manager
What is a control owner?
There is a range of terms used when conducting risk management. Refer to our glossary to learn more:
|Cause||Potential occurrences that would result in the risk event.|
|Consequence||The outcome of an event affecting objectives.|
|Consequence description||An explanation of the main consequences of the risk event.|
|Control||Any action taken by management which either reduces the likelihood of a risk event occurring or reduces the potential for damage arising from that risk event. It can include any process, policy, device, practice, or other action that modifies the risk.|
|Control gap||There is no adequate control in place to address the given risk of an activity or process.|
|Control owner||A person or entity with accountability for ensuring that the control activity is in place and is operating effectively. The control owner does not necessarily perform the control activity, however, if not conducting the control, they should have a level of oversight of its performance.|
|Forecast risk||The level or risk remaining after agreed treatment plans have been implemented.|
|Framework||A structure with which a firm identifies and manages the risk, internal control, and compliance requirements to support the assurances provided by the firm to its stakeholders.|
|Inherent consequence||The outcome of an event affecting objectives without consideration to the impact of controls.|
|Inherent risk||The level of risk without giving consideration to the impact of controls.|
|Key risk indicator||A measure to indicate the risk level of an activity. KRIs give early warning to identify potential events that may harm continuity of an activity.|
|Likelihood||The probability of a risk event occurring in the next 12 months, expressed in terms of a percentage between 0% and 100%.|
|Process owner||Person or role responsible for the operation of a process or activity. This role may be formally designated or, by default, may be the person responsible for the process or activity’s main tasks.|
|Residual consequence||The outcome of an event affecting objectives when the current control environment is taken into account.|
|Residual risk||The level of risk after the current control environment is taken into account.|
|Risk||The effect of uncertainly on objectives.|
|Risk description||Details of the risk event.|
|Risk owner||A person or entity with the accountability and authority to manage a risk. Where the ‘control owner’ and the ‘treatment owner’ are different, the risk owner has accountability to ensure that the treatment plan is implemented.|
|Risk treatment / Treatment plan||The process of selecting one or more options for mitigating risks and implementing those options.|
|Treatment plan owner||The person accountable for monitoring and reporting implementation progress of the treatment plan.|
Who are the owners of the building?
Pay a visit to the county records offices – Every county in every state has local records offices. If you’re in the neighborhood, you’ll be able to visit in person, though there is a very good chance that they have an online database as well. When searching for the name of a property owner, there is more than one office that will be able to help, but sometimes you will need to cross-reference them for a full picture.
- To find the name of the building owner, the county tax assessor’s office will be the place to start.
- Everyone that owns a building pays taxes on their property.
- The county tax assessor’s office exists to estimate tax rates for all of the property in a given county.
- Importantly for you, it also keeps records of those property tax assessments and the name of the owner who is responsible for paying those taxes.
These records are available to the public. To find the building owner through the tax assessor’s website, you’ll need to know the building’s address or the property’s parcel number. (Once you do find the owner’s name, you can use that as a search term as well.
- This can be useful if you want to find out what other property they own in the area.) The results should show you a variety of information, including the history of tax assessments for the property, the condition the property is in, and of course, the current owner and list of previous owners.
- If all you need is a name, then you can stop right there.
But if you want to make sure you have a full picture of the property’s history before approaching the owner, you will also want to search the records in the county recorder’s office. Whereas the county tax assessor is responsible for the tax assessment of a property, the county recorder’s office is responsible for recording, keeping, and making available to the public all documents that affect the property in question, including property deeds.
The deed will be signed by the current owner (so you can double-check that the name you found at the assessor’s office is the same) and whoever sold it to the current owner. You’ll also be able to use the deeds to put together a list of all previous owners and get the full picture of the property’s history.
And in addition to the deed, you can find out important information like whether there are any liens on the property, which will affect its value. When you search the recorder’s office records, you’ll again be able to search by name, address and/or parcel number.
And though every county runs its database a little bit differently, you may have more search options available at the county recorder, like searching by the date of purchase. Next, the Secretary of State It’s possible that after digging through those records to find out who owns the building in question, the name you’ve found isn’t for a person at all but an LLC.
It is increasingly common for LLCs to be the listed owner on commercial property records, and for good reason. A significant benefit of an LLC is that it shields the building owner from personal liability, But, of course, it also makes it harder to find out who is behind the LLC and who you want to contact to make an offer on the building you have your eye on.
So, after you’ve found an owner from the county tax assessor or county recorder that has turned out to be an LLC, you’ll want to head to the website for the Secretary of State, There you can input the name of the LLC that you have found. An LLC is required to file articles of organization, which among other things, includes the names of its members.
It is possible that the organizing member for one LLC is listed as another LLC. In this case, you’ll need to search again with that name and go down the chain until you come to a person that you can contact about the building you’d like to acquire.
Who are the members of a construction team?
There are seven notable professionals in the construction industry, namely; architects, engineers, builders, quantity surveyors, town planners, land and estate surveyors, and valuers, where each has a specific role to play in building project delivery.
Who controls a construction site?
Superintendent (construction) On large projects, the superintendent’ s job is to run the day-to-day operations on the construction site and control the short-term, The role of the superintendent also includes important and coordination responsibilities.
It is common for most finance-related tasks (especially labor and material cost control) and long-term scheduling to be handled by a, The project manager and superintendent need to cooperate and share control effectively. Superintendents are almost universally stationed on the construction site, while project managers are usually based in the contractor’s office with part-time on site responsibilities.
On anything other than small projects, the superintendent is often assisted by a also employed by the construction company. On very large projects, those generally in excess of $100m, there are multiple tiers of superintendents. These tiers are generally broken down into the following: Program superintendent, super-structure superintendents, MEPF (mechanical, electrical, plumbing and fire protection) superintendents, interior superintendents, craft/trade superintendents and assistant superintendents.
- There is a similar tier for the project management side.
- Program superintendents are responsible for the overall coordination and completion of the project through the direction of the second and third tiers of superintendents.
- Program superintendents commonly have very little hands on construction interaction due to delegation to other tier superintendents.
The number of hours worked may reflect the tier of the superintendent, with program superintendents generally having a normal Monday thru Friday (8:00am to 5:00pm work schedule). The compensation package is also related to the tier level of the superintendent.
- In Australia, the common building contracts in use also have a “Superintendent”.
- This is a person who represents the owner or principal and administers the contract terms and conditions.
- The responsibilities include: assessing and certifying claims for payment, extensions of time and variations to the contract.
The Superintendent is also responsible for confirming the builder’s compliance with the requirements of the building contract and for answering queries in relation to contract matters or other matters related to the construction. The Superintendent in a building contract usually comes from an architectural, quantity surveying or engineering background.
Why is it important to be an owner?
Updated on January 17th, 2022 You’ve seen the headlines — employee engagement is frighteningly low. In fact, research from Gallup indicates that only 15 percent of employees globally are engaged in their work. There are numerous strategies intended to combat this apathy and engage employees, but one of the most important involves cultivating a culture of ownership.
When employees feel a sense of ownership over their company and their work, they’re more likely to do their best. After all, they have “skin in the game.” In an ownership culture, employees are guided less by rules and more by their own personal values, and they are more likely to make the right decisions even when no one is around to catch them if they take the easy way out.
Ownership is also important because it gives employees a sense of autonomy. Instead of requiring constant hand-holding, employees will focus on what the company needs overall rather than just what’s required of them. That’s because they feel invested in the team’s success.
- In case of annulment of marriage, and the wife is the guilty party, she shall resume her maiden name and surname.
- If she is the innocent spouse, she may resume her maiden name and surname.
- However, she may choose to continue employing her former husband’s surname, unless: (1) The court decrees otherwise, or (2) She or the former husband is married again to another person.
What is the rule of owner?
Civil Code of the Philippines(4) – TITLE XIII Use of Surnames (n) ARTICLE 364. Legitimate and legitimated children shall principally use the surname of the father. ARTICLE 365. An adopted child shall bear the surname of the adopter. ARTICLE 366. A natural child acknowledged by both parents shall principally use the surname of the father.
If recognized by only one of the parents, a natural child shall employ the surname of the recognizing parent. ARTICLE 367. Natural children by legal fiction shall principally employ the surname of the father. ARTICLE 368. Illegitimate children referred to in article 287 shall bear the surname of the mother.
ARTICLE 369. Children conceived before the decree annulling a voidable marriage shall principally use the surname of the father. ARTICLE 370. A married woman may use: (1) Her maiden first name and surname and add her husband’s surname, or (2) Her maiden first name and her husband’s surname, or (3) Her husband’s full name, but prefixing a word indicating that she is his wife, such as “Mrs.” ARTICLE 371.
ARTICLE 372. When legal separation has been granted, the wife shall continue using her name and surname employed before the legal separation. ARTICLE 373. A widow may use the deceased husband’s surname as though he were still living, in accordance with article 370.
ARTICLE 374. In case of identity of names and surnames, the younger person shall be obliged to use such additional name or surname as will avoid confusion. ARTICLE 375. In case of identity of names and surnames between ascendants and descendants, the word “Junior” can be used only by a son. Grandsons and other direct male descendants shall either: (1) Add a middle name or the mother’s surname, or (2) Add the Roman numerals II, III, and so on.
ARTICLE 376. No person can change his name or surname without judicial authority. ARTICLE 377. Usurpation of a name and surname may be the subject of an action for damages and other relief. ARTICLE 378. The unauthorized or unlawful use of another person’s surname gives a right of action to the latter.
ARTICLE 379. The employment of pen names or stage names is permitted, provided it is done in good faith and there is no injury to third persons. Pen names and stage names cannot be usurped. ARTICLE 380. Except as provided in the preceding article, no person shall use different names and surnames. TITLE XIV Absence CHAPTER 1 Provisional Measures in Case of Absence ARTICLE 381.
When a person disappears from his domicile, his whereabouts being unknown, and without leaving an agent to administer his property, the judge, at the instance of an interested party, a relative, or a friend, may appoint a person to represent him in all that may be necessary.
This same rule shall be observed when under similar circumstances the power conferred by the absentee has expired. (181a) ARTICLE 382. The appointment referred to in the preceding article having been made, the judge shall take the necessary measures to safeguard the rights and interests of the absentee and shall specify the powers, obligations and remuneration of his representative, regulating them, according to the circumstances, by the rules concerning guardians.
(182) ARTICLE 383. In the appointment of a representative, the spouse present shall be preferred when there is no legal separation. If the absentee left no spouse, or if the spouse present is a minor, any competent person may be appointed by the court.
(183a) CHAPTER 2 Declaration of Absence ARTICLE 384. Two years having elapsed without any news about the absentee or since the receipt of the last news, and five years in case the absentee has left a person in charge of the administration of his property, his absence may be declared. (184) ARTICLE 385.
The following may ask for the declaration of absence: (1) The spouse present; (2) The heirs instituted in a will, who may present an authentic copy of the same; (3) The relatives who may succeed by the law of intestacy; (4) Those who may have over the property of the absentee some right subordinated to the condition of his death.
(185) ARTICLE 386. The judicial declaration of absence shall not take effect until six months after its publication in a newspaper of general circulation. (186a) CHAPTER 3 Administration of the Property of the Absentee ARTICLE 387. An administrator of the absentee’s property shall be appointed in accordance with article 383.
(187a) ARTICLE 388. The wife who is appointed as an administratrix of the husband’s property cannot alienate or encumber the husband’s property; or that of the conjugal partnership, without judicial authority. (188a) ARTICLE 389. The administration shall cease in any of the following cases: (1) When the absentee appears personally or by means of an agent; (2) When the death of the absentee is proved and his testate or intestate heirs appear; cdasia (3) When a third person appears, showing by a proper document that he has acquired the absentee’s property by purchase or other title.
- In these cases the administrator shall cease in the performance of his office, and the property shall be at the disposal of those who may have a right thereto.
- 190) CHAPTER 4 Presumption of Death ARTICLE 390.
- After an absence of seven years, it being unknown whether or not the absentee still lives, he shall be presumed dead for all purposes, except for those of succession.
The absentee shall not be presumed dead for the purpose of opening his succession till after an absence of ten years. If he disappeared after the age of seventy-five years, an absence of five years shall be sufficient in order that his succession may be opened.
- N) ARTICLE 391.
- The following shall be presumed dead for all purposes, including the division of the estate among the heirs: otiteo (1) A person on board a vessel lost during a sea voyage, or an aeroplane which is missing, who has not been heard of for four years since the loss of the vessel or aeroplane; (2) A person in the armed forces who has taken part in war, and has been missing for four years; (3) A person who has been in danger of death under other circumstances and his existence has not been known for four years.
(n) ARTICLE 392. If the absentee appears, or without appearing his existence is proved, he shall recover his property in the condition in which it may be found, and the price of any property that may have been alienated or the property acquired therewith; but he cannot claim either fruits or rents.
194) CHAPTER 5 Effect of Absence Upon the Contingent Rights of the Absentee ARTICLE 393. Whoever claims a right pertaining to a person whose existence is not recognized must prove that he was living at the time his existence was necessary in order to acquire said right. (195) ARTICLE 394. Without prejudice to the provision of the preceding article, upon the opening of a succession to which an absentee is called, his share shall accrue to his coheirs, unless he has heirs, assigns, or a representative.
They shall all, as the case may be, make an inventory of the property. (196a) ARTICLE 395. The provisions of the preceding article are understood to be without prejudice to the action of petition for inheritance or other rights which are vested in the absentee, his representatives or successors in interest.
- These rights shall not be extinguished save by lapse of time fixed for prescription.
- In the record that is made in the Registry of the real estate which accrues to the coheirs, the circumstance of its being subject to the provisions of this article shall be stated.
- 197) ARTICLE 396.
- Those who may have entered upon the inheritance shall appropriate the fruits received in good faith so long as the absentee does not appear, or while his representatives or successors in interest do not bring the proper actions.
(198) TITLE XV Emancipation and Age of Majority CHAPTER 1 Emancipation ARTICLE 397. Emancipation takes place: (1) By the marriage of the minor; (2) By the attainment of majority; (3) By the concession of the father or of the mother who exercises parental authority.
- 314) ARTICLE 398.
- Emancipation treated of in No.3 of the preceding article shall be effected in a public instrument which shall be recorded in the Civil Register, and unless so recorded, it shall take no effect against third persons.
- 316a) ARTICLE 399.
- Emancipation by marriage or by voluntary concession shall terminate parental authority over the child’s person.
It shall enable the minor to administer his property as though he were of age, but he cannot borrow money or alienate or encumber real property without the consent of his father or mother, or guardian. He can sue and be sued in court only with the assistance of his father, mother or guardian.
- 317a) ARTICLE 400.
- In order that emancipation by concession of the father or of the mother may take place, it is required that the minor be eighteen years of age, and that he give his consent thereto.
- 318) ARTICLE 401.
- Emancipation is final or irrevocable.
- 319a) CHAPTER 2 Age of Majority ARTICLE 402.
Majority commences upon the attainment of the age of twenty-one years. The person who has reached majority is qualified for all acts of civil life, save the exceptions established by this Code in special cases. (320a) ARTICLE 403. Notwithstanding the provisions of the preceding article, a daughter above twenty-one but below twenty-three years of age cannot leave the parental home without the consent of the father or mother in whose company she lives, except to become a wife, or when she exercises a profession or calling, or when the father or mother has contracted a subsequent marriage.
- 321a) ARTICLE 404.
- An orphan who is minor may, at the instance of any relative or other person, obtain emancipation by concession upon an order of the Court of First Instance.
- 322a) ARTICLE 405.
- For the concession and approval referred to in the preceding article it is necessary: ewIdne (1) That the minor be eighteen years of age; (2) That he consent thereto; and (3) That the concession be deemed convenient for the minor.
The concession shall be recorded in the Civil Register. (323a) ARTICLE 406. The provisions of article 399 are applicable to an orphan who has been emancipated according to article 404. The court will give the necessary approval with respect to the contracts mentioned in article 399.
- In litigations, a guardian ad litem for the minor shall be appointed by the court.
- 324a) TITLE XVI Civil Register ARTICLE 407.
- Acts, events and judicial decrees concerning the civil status of persons shall be recorded in the civil register.
- 325a) ARTICLE 408.
- The following shall be entered in the civil register: (1) Births; (2) marriages; (3) deaths; aoLnLe (4) legal separations; (5) annulments of marriage; (6) judgments declaring marriages void from the beginning; (7) legitimations; (8) adoptions; (9) acknowledgments of natural children; (10) naturalization; (11) loss, or (12) recovery of citizenship; (13) civil interdiction; (14) judicial determination of filiation; (15) voluntary emancipation of a minor; and (16) changes of name.
(326a) ARTICLE 409. In cases of legal separation, adoption, naturalization and other judicial orders mentioned in the preceding article, it shall be the duty of the clerk of the court which issued the decree to ascertain whether the same has been registered, and if this has not been done, to send a copy of said decree to the civil registry of the city or municipality where the court is functioning.
- N) ARTICLE 410.
- The books making up the civil register and all documents relating thereto shall be considered public documents and shall be prima facie evidence of the facts therein contained.
- N) ARTICLE 411.
- Every civil registrar shall be civilly responsible for any unauthorized alteration made in any civil register, to any person suffering damage thereby.
However, the civil registrar may exempt himself from such liability if he proves that he has taken every reasonable precaution to prevent the unlawful alteration. (n) ARTICLE 412. No entry in a civil register shall be changed or corrected, without a judicial order.
N) ARTICLE 413. All other matters pertaining to the registration of civil status shall be governed by special laws. (n) BOOK II Property, Ownership, and its Modifications TITLE I Classification of Property PRELIMINARY PROVISIONS ARTICLE 414. All things which are or may be the object of appropriation are considered either: eEEmir (1) Immovable or real property; or (2) Movable or personal property.
(333) CHAPTER 1 Immovable Property ARTICLE 415. The following are immovable property: (1) Land, buildings, roads and constructions of all kinds adhered to the soil; (2) Trees, plants, and growing fruits, while they are attached to the land or form an integral part of an immovable; (3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking the material or deterioration of the object; (4) Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings or on lands by the owner of the immovable in such a manner that it reveals the intention to attach them permanently to the tenements; (5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works; (6) Animal houses, pigeon-houses, beehives, fish ponds or breeding places of similar nature, in case their owner has placed them or preserves them with the intention to have them permanently attached to the land, and forming a permanent part of it; the animals in these places are included; (7) Fertilizer actually used on a piece of land; (8) Mines, quarries, and slag dumps, while the matter thereof forms part of the bed, and waters either running or stagnant; (9) Docks and structures which, though floating, are intended by their nature and object to remain at a fixed place on a river, lake, or coast; (10) Contracts for public works, and servitudes and other real rights over immovable property.
334a) CHAPTER 2 Movable Property ARTICLE 416. The following things are deemed to be personal property: (1) Those movables susceptible of appropriation which are not included in the preceding article; (2) Real property which by any special provision of law is considered as personalty; (3) Forces of nature which are brought under control by science; and (4) In general, all things which can be transported from place to place without impairment of the real property to which they are fixed.
(335a) ARTICLE 417. The following are also considered as personal property: (1) Obligations and actions which have for their object movables or demandable sums; and (2) Shares of stock of agricultural, commercial and industrial entities, although they may have real estate.
(336a) ARTICLE 418. Movable property is either consumable or nonconsumable. To the first class belong those movables which cannot be used in a manner appropriate to their nature without their being consumed; to the second class belong all the others. (337) CHAPTER 3 Property in Relation to the Person to Whom It Belongs ARTICLE 419.
Property is either of public dominion or of private ownership. (338) ARTICLE 420. The following things are property of public dominion: (1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character; (2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth.
- 339a) ARTICLE 421.
- All other property of the State, which is not of the character stated in the preceding article, is patrimonial property.
- 340a) ARTICLE 422.
- Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State.
(341a) ARTICLE 423. The property of provinces, cities, and municipalities is divided into property for public use and patrimonial property. (343) ARTICLE 424. Property for public use, in the provinces, cities, and municipalities, consist of the provincial roads, city streets, municipal streets, the squares, fountains, public waters, promenades, and public works for public service paid for by said provinces, cities, or municipalities.
- All other property possessed by any of them is patrimonial and shall be governed by this Code, without prejudice to the provisions of special laws.
- 344a) ARTICLE 425.
- Property of private ownership, besides the patrimonial property of the State, provinces, cities, and municipalities, consists of all property belonging to private persons, either individually or collectively.
(345a) Provisions Common to the Three Preceding Chapters ARTICLE 426. Whenever by provision of the law, or an individual declaration, the expression “immovable things or property,” or “movable things or property,” is used, it shall be deemed to include, respectively, the things enumerated in Chapter 1 and in Chapter 2.
Whenever the word “muebles,” or “furniture,” is used alone, it shall not be deemed to include money, credits, commercial securities, stocks and bonds, jewelry, scientific or artistic collections, books, medals, arms, clothing, horses or carriages and their accessories, grains, liquids and merchandise, or other things which do not have as their principal object the furnishing or ornamenting of a building, except where from the context of the law, or the individual declaration, the contrary clearly appears.
(346a) TITLE II Ownership CHAPTER 1 Ownership in General ARTICLE 427. Ownership may be exercised over things or rights. (n) ARTICLE 428. The owner has the right to enjoy and dispose of a thing, without other limitations than those established by law. The owner has also a right of action against the holder and possessor of the thing in order to recover it.
- 348a) ARTICLE 429.
- The owner or lawful possessor of a thing has the right to exclude any person from the enjoyment and disposal thereof.
- For this purpose, he may use such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property.
(n) ARTICLE 430. Every owner may enclose or fence his land or tenements by means of walls, ditches, live or dead hedges, or by any other means without detriment to servitudes constituted thereon. (388) ARTICLE 431. The owner of a thing cannot make use thereof in such manner as to injure the rights of a third person.
(n) ARTICLE 432. The owner of a thing has no right to prohibit the interference of another with the same, if the interference is necessary to avert an imminent danger and the threatened damage, compared to the damage arising to the owner from the interference, is much greater. The owner may demand from the person benefited indemnity for the damage to him.
(n) ARTICLE 433. Actual possession under claim of ownership raises a disputable presumption of ownership. The true owner must resort to judicial process for the recovery of the property. (n) ARTICLE 434. In an action to recover, the property must be identified, and the plaintiff must rely on the strength of his title and not on the weakness of the defendant’s claim.
- N) ARTICLE 435.
- No person shall be deprived of his property except by competent authority and for public use and always upon payment of just compensation.
- Should this requirement be not first complied with, the courts shall protect and, in a proper case, restore the owner in his possession.
- 349a) ARTICLE 436.
When any property is condemned or seized by competent authority in the interest of health, safety or security, the owner thereof shall not be entitled to compensation, unless he can show that such condemnation or seizure is unjustified. (n) ARTICLE 437.
- The owner of a parcel of land is the owner of its surface and of everything under it, and he can construct thereon any works or make any plantations and excavations which he may deem proper, without detriment to servitudes and subject to special laws and ordinances.
- He cannot complain of the reasonable requirements of aerial navigation.
(350a) ARTICLE 438. Hidden treasure belongs to the owner of the land, building, or other property on which it is found. Nevertheless, when the discovery is made on the property of another, or of the State or any of its subdivisions, and by chance, one-half thereof shall be allowed to the finder.
If the finder is a trespasser, he shall not be entitled to any share of the treasure. If the things found be of interest to science or the arts, the State may acquire them at their just price, which shall be divided in conformity with the rule stated. (351a) ARTICLE 439. By treasure is understood, for legal purposes, any hidden and unknown deposit of money, jewelry, or other precious objects, the lawful ownership of which does not appear.
(352) CHAPTER 2 Right of Accession GENERAL PROVISIONS ARTICLE 440. The ownership of property gives the right by accession to everything which is produced thereby, or which is incorporated or attached thereto, either naturally or artificially. (353) SECTION 1 Right of Accession with Respect to What is Produced by Property ARTICLE 441.
To the owner belongs: (1) The natural fruits; (2) The industrial fruits; (3) The civil fruits. (354) ARTICLE 442. Natural fruits are the spontaneous products of the soil, and the young and other products of animals. Industrial fruits are those produced by lands of any kind through cultivation or labor.
Civil fruits are the rents of buildings, the price of leases of lands and other property and the amount of perpetual or life annuities or other similar income. (355a) ARTICLE 443. He who receives the fruits has the obligation to pay the expenses made by a third person in their production, gathering, and preservation.
356) ARTICLE 444. Only such as are manifest or born are considered as natural or industrial fruits. With respect to animals, it is sufficient that they are in the womb of the mother, although unborn. (357) SECTION 2 Right of Accession with Respect to Immovable Property ARTICLE 445. Whatever is built, planted or sown on the land of another and the improvements or repairs made thereon, belong to the owner of the land, subject to the provisions of the following articles.
(358) ARTICLE 446. All works, sowing, and planting are presumed made by the owner and at his expense, unless the contrary is proved. (359) ARTICLE 447. The owner of the land who makes thereon, personally or through another, plantings, constructions or works with the materials of another, shall pay their value; and, if he acted in bad faith, he shall also be obliged to the reparation of damages.
- The owner of the materials shall have the right to remove them only in case he can do so without injury to the work constructed, or without the plantings, constructions or works being destroyed.
- However, if the landowner acted in bad faith, the owner of the materials may remove them in any event, with a right to be indemnified for damages.
(360a) ARTICLE 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent.
- However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees.
- In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity.
- The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof.
(361a) ARTICLE 449. He who builds, plants or sows in bad faith on the land of another, loses what is built, planted or sown without right to indemnity. (362) ARTICLE 450. The owner of the land on which anything has been built, planted or sown in bad faith may demand the demolition of the work, or that the planting or sowing be removed, in order to replace things in their former condition at the expense of the person who built, planted or sowed; or he may compel the builder or planter to pay the price of the land, and the sower the proper rent.
(363a) ARTICLE 451. In the cases of the two preceding articles, the landowner is entitled to damages from the builder, planter or sower. (n) ARTICLE 452. The builder, planter or sower in bad faith is entitled to reimbursement for the necessary expenses of preservation of the land. (n) ARTICLE 453. If there was bad faith, not only on the part of the person who built, planted or sowed on the land of another, but also on the part of the owner of such land, the rights of one and the other shall be the same as though both had acted in good faith.
It is understood that there is bad faith on the part of the landowner whenever the act was done with his knowledge and without opposition on his part. (364a) ARTICLE 454. When the landowner acted in bad faith and the builder, planter or sower proceeded in good faith, the provisions of article 447 shall apply.
- N) ARTICLE 455.
- If the materials, plants or seeds belong to a third person who has not acted in bad faith, the owner of the land shall answer subsidiarily for their value and only in the event that the one who made use of them has no property with which to pay.
- This provision shall not apply if the owner makes use of the right granted by article 450.
If the owner of the materials, plants or seeds has been paid by the builder, planter or sower, the latter may demand from the landowner the value of the materials and labor. (365a) ARTICLE 456. In the cases regulated in the preceding articles, good faith does not necessarily exclude negligence, which gives right to damages under article 2176.
- N) ARTICLE 457.
- To the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the current of the waters.
- 366) ARTICLE 458.
- The owners of estates adjoining ponds or lagoons do not acquire the land left dry by the natural decrease of the waters, or lose that inundated by them in extraordinary floods.
(367) ARTICLE 459. Whenever the current of a river, creek or torrent segregates from an estate on its bank a known portion of land and transfers it to another estate, the owner of the land to which the segregated portion belonged retains the ownership of it, provided that he removes the same within two years.
(368a) ARTICLE 460. Trees uprooted and carried away by the current of the waters belong to the owner of the land upon which they may be cast, if the owners do not claim them within six months. If such owners claim them, they shall pay the expenses incurred in gathering them or putting them in a safe place.
(369a) ARTICLE 461. River beds which are abandoned through the natural change in the course of the waters ipso facto belong to the owners whose lands are occupied by the new course in proportion to the area lost. However, the owners of the lands adjoining the old bed shall have the right to acquire the same by paying the value thereof, which value shall not exceed the value of the area occupied by the new bed.
- 370a) ARTICLE 462.
- Whenever a river, changing its course by natural causes, opens a new bed through a private estate, this bed shall become of public dominion.
- 372a) ARTICLE 463.
- Whenever the current of a river divides itself into branches, leaving a piece of land or part thereof isolated, the owner of the land retains his ownership.
He also retains it if a portion of land is separated from the estate by the current. (374) ARTICLE 464. Islands which may be formed on the seas within the jurisdiction of the Philippines, on lakes, and on navigable or floatable rivers belong to the State.
- 371a) ARTICLE 465.
- Islands which through successive accumulation of alluvial deposits are formed in non-navigable and non-floatable rivers, belong to the owners of the margins or banks nearest to each of them, or to the owners of both margins if the island is in the middle of the river, in which case it shall be divided longitudinally in halves.
If a single island thus formed be more distant from one margin than from the other, the owner of the nearer margin shall be the sole owner thereof. (373a) SECTION 3 Right of Accession with Respect to Movable Property ARTICLE 466. Whenever two movable things belonging to different owners are, without bad faith, united in such a way that they form a single object, the owner of the principal thing acquires the accessory, indemnifying the former owner thereof for its value.
(375) ARTICLE 467. The principal thing, as between two things incorporated, is deemed to be that to which the other has been united as an ornament, or for its use or perfection. (376) ARTICLE 468. If it cannot be determined by the rule given in the preceding article which of the two things incorporated is the principal one, the thing of the greater value shall be so considered, and as between two things of equal value, that of the greater volume.
In painting and sculpture, writings, printed matter, engraving and lithographs, the board, metal, stone, canvas, paper or parchment shall be deemed the accessory thing. (377) ARTICLE 469. Whenever the things united can be separated without injury, their respective owners may demand their separation.
Nevertheless, in case the thing united for the use, embellishment or perfection of the other, is much more precious than the principal thing, the owner of the former may demand its separation, even though the thing to which it has been incorporated may suffer some injury. (378) ARTICLE 470. Whenever the owner of the accessory thing has made the incorporation in bad faith, he shall lose the thing incorporated and shall have the obligation to indemnify the owner of the principal thing for the damages he may have suffered.
If the one who has acted in bad faith is the owner of the principal thing, the owner of the accessory thing shall have a right to choose between the former paying him its value or that the thing belonging to him be separated, even though for this purpose it be necessary to destroy the principal thing; and in both cases, furthermore, there shall be indemnity for damages.
- If either one of the owners has made the incorporation with the knowledge and without the objection of the other, their respective rights shall be determined as though both acted in good faith.
- 379a) ARTICLE 471.
- Whenever the owner of the material employed without his consent has a right to an indemnity, he may demand that this consist in the delivery of a thing equal in kind and value, and in all other respects, to that employed, or else in the price thereof, according to expert appraisal.
(380) ARTICLE 472. If by the will of their owners two things of the same or different kinds are mixed, or if the mixture occurs by chance, and in the latter case the things are not separable without injury, each owner shall acquire a right proportional to the part belonging to him, bearing in mind the value of the things mixed or confused.
(381) ARTICLE 473. If by the will of only one owner, but in good faith, two things of the same or different kinds are mixed or confused, the rights of the owners shall be determined by the provisions of the preceding article. If the one who caused the mixture or confusion acted in bad faith, he shall lose the thing belonging to him thus mixed or confused, besides being obliged to pay indemnity for the damages caused to the owner of the other thing with which his own was mixed.
(382) ARTICLE 474. One who in good faith employs the material of another in whole or in part in order to make a thing of a different kind, shall appropriate the thing thus transformed as his own, indemnifying the owner of the material for its value. If the material is more precious than the transformed thing or is of more value, its owner may, at his option, appropriate the new thing to himself, after first paying indemnity for the value of the work, or demand indemnity for the material.
If in the making of the thing bad faith intervened, the owner of the material shall have the right to appropriate the work to himself without paying anything to the maker, or to demand of the latter that he indemnify him for the value of the material and the damages he may have suffered. However, the owner of the material cannot appropriate the work in case the value of the latter, for artistic or scientific reasons, is considerably more than that of the material.
(383a) ARTICLE 475. In the preceding articles, sentimental value shall be duly appreciated. (n) CHAPTER 3 Quieting of Title (n) ARTICLE 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title.
- An action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein.
- ARTICLE 477.
- The plaintiff must have legal or equitable title to, or interest in the real property which is the subject-matter of the action.
- He need not be in possession of said property.
ARTICLE 478. There may also be an action to quiet title or remove a cloud therefrom when the contract, instrument or other obligation has been extinguished or has terminated, or has been barred by extinctive prescription. ARTICLE 479. The plaintiff must return to the defendant all benefits he may have received from the latter, or reimburse him for expenses that may have redounded to the plaintiff’s benefit.
ARTICLE 480. The principles of the general law on the quieting of title are hereby adopted insofar as they are not in conflict with this Code. ARTICLE 481. The procedure for the quieting of title or the removal of a cloud therefrom shall be governed by such rules of court as the Supreme Court shall promulgate.
CHAPTER 4 Ruinous Buildings and Trees in Danger of Falling ARTICLE 482. If a building, wall, column, or any other construction is in danger of falling, the owner shall be obliged to demolish it or to execute the necessary work in order to prevent it from falling.
If the proprietor does not comply with this obligation, the administrative authorities may order the demolition of the structure at the expense of the owner, or take measures to insure public safety. (389a) ARTICLE 483. Whenever a large tree threatens to fall in such a way as to cause damage to the land or tenement of another or to travelers over a public or private road, the owner of the tree shall be obliged to fell and remove it; and should he not do so, it shall be done at his expense by order of the administrative authorities.
(390a) TITLE III Co-ownership ARTICLE 484. There is co-ownership whenever the ownership of an undivided thing or right belongs to different persons. In default of contracts, or of special provisions, co-ownership shall be governed by the provisions of this Title.
392) ARTICLE 485. The share of the co-owners, in the benefits as well as in the charges, shall be proportional to their respective interests. Any stipulation in a contract to the contrary shall be void. The portions belonging to the co-owners in the co-ownership shall be presumed equal, unless the contrary is proved.
(393a) ARTICLE 486. Each co-owner may use the thing owned in common, provided he does so in accordance with the purpose for which it is intended and in such a way as not to injure the interest of the co-ownership or prevent the other co-owners from using it according to their rights.
- The purpose of the co-ownership may be changed by agreement, express or implied.
- 394a) ARTICLE 487.
- Any one of the co-owners may bring an action in ejectment.
- N) ARTICLE 488.
- Each co-owner shall have a right to compel the other co-owners to contribute to the expenses of preservation of the thing or right owned in common and to the taxes.
Any one of the latter may exempt himself from this obligation by renouncing so much of his undivided interest as may be equivalent to his share of the expenses and taxes. No such waiver shall be made if it is prejudicial to the co-ownership. (395a) ARTICLE 489.
Repairs for preservation may be made at the will of one of the co-owners, but he must, if practicable, first notify his co-owners of the necessity for such repairs. Expenses to improve or embellish the thing shall be decided upon by a majority as determined in article 492. (n) ARTICLE 490. Whenever the different stories of a house belong to different owners, if the titles of ownership do not specify the terms under which they should contribute to the necessary expenses and there exists no agreement on the subject, the following rules shall be observed: (1) The main and party walls, the roof and the other things used in common, shall be preserved at the expense of all the owners in proportion to the value of the story belonging to each; (2) Each owner shall bear the cost of maintaining the floor of his story; the floor of the entrance, front door, common yard and sanitary works common to all, shall be maintained at the expense of all the owners pro rata; (3) The stairs from the entrance to the first story shall be maintained at the expense of all the owners pro rata, with the exception of the owner of the ground floor; the stairs from the first to the second story shall be preserved at the expense of all, except the owner of the ground floor and the owner of the first story; and so on successively.
(396) ARTICLE 491. None of the co-owners shall, without the consent of the others, make alterations in the thing owned in common, even though benefits for all would result therefrom. However, if the withholding of the consent by one or more of the co-owners is clearly prejudicial to the common interest, the courts may afford adequate relief.
(397a) ARTICLE 492. For the administration and better enjoyment of the thing owned in common, the resolutions of the majority of the co-owners shall be binding. There shall be no majority unless the resolution is approved by the co-owners who represent the controlling interest in the object of the co-ownership.
Should there be no majority, or should the resolution of the majority be seriously prejudicial to those interested in the property owned in common, the court, at the instance of an interested party, shall order such measures as it may deem proper, including the appointment of an administrator.
- Whenever a part of the thing belongs exclusively to one of the co-owners, and the remainder is owned in common, the preceding provisions shall apply only to the part owned in common.
- 398) ARTICLE 493.
- Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved.
But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. (399) ARTICLE 494. No co-owner shall be obliged to remain in the co-ownership.
Each co-owner may demand at any time the partition of the thing owned in common, insofar as his share is concerned. Nevertheless, an agreement to keep the thing undivided for a certain period of time, not exceeding ten years, shall be valid. This term may be extended by a new agreement. A donor or testator may prohibit partition for a period which shall not exceed twenty years.
Neither shall there be any partition when it is prohibited by law. No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership. (400a) ARTICLE 495. Notwithstanding the provisions of the preceding article, the co-owners cannot demand a physical division of the thing owned in common, when to do so would render it unserviceable for the use for which it is intended.
- But the co-ownership may be terminated in accordance with article 498.
- 401a) ARTICLE 496.
- Partition may be made by agreement between the parties or by judicial proceedings.
- Partition shall be governed by the Rules of Court insofar as they are consistent with this Code.
- 402) ARTICLE 497.
- The creditors or assignees of the co-owners may take part in the division of the thing owned in common and object to its being effected without their concurrence.
But they cannot impugn any partition already executed, unless there has been fraud, or in case it was made notwithstanding a formal opposition presented to prevent it, without prejudice to the right of the debtor or assignor to maintain its validity.
- 403) ARTICLE 498.
- Whenever the thing is essentially indivisible and the co-owners cannot agree that it be allotted to one of them who shall indemnify the others, it shall be sold and its proceeds distributed.
- 404) ARTICLE 499.
- The partition of a thing owned in common shall not prejudice third persons, who shall retain the rights of mortgage, servitude, or any other real rights belonging to them before the division was made.
Personal rights pertaining to third persons against the co-ownership shall also remain in force, notwithstanding the partition. (405) ARTICLE 500. Upon partition, there shall be a mutual accounting for benefits received and reimbursements for expenses made.
- Likewise, each co-owner shall pay for damages caused by reason of his negligence or fraud.
- N) ARTICLE 501.
- Every co-owner shall, after partition, be liable for defects of title and quality of the portion assigned to each of the other co-owners.
- N) TITLE IV Some Special Properties CHAPTER 1 Waters SECTION 1 Ownership of Waters ARTICLE 502.
The following are of public dominion: (1) Rivers and their natural beds; (2) Continuous or intermittent waters of springs and brooks running in their natural beds and the beds themselves; (3) Waters rising continuously or intermittently on lands of public dominion; (4) Lakes and lagoons formed by Nature on public lands, and their beds; (5) Rain waters running through ravines or sand beds, which are also of public dominion; (6) Subterranean waters on public lands; (7) Waters found within the zone of operation of public works, even if constructed by a contractor; (8) Waters rising continuously or intermittently on lands belonging to private persons, to the State, to a province, or to a city or a municipality from the moment they leave such lands; (9) The waste waters of fountains, sewers and public establishments.
- 407) ARTICLE 503.
- The following are of private ownership: (1) Continuous or intermittent waters rising on lands of private ownership, while running through the same; (2) Lakes and lagoons, and their beds, formed by Nature on such lands; (3) Subterranean waters found on the same; (4) Rain waters falling on said lands, as long as they remain within the boundaries; (5) The beds of flowing waters, continuous or intermittent, formed by rain water, and those of brooks, crossing lands which are not of public dominion.
In every drain or aqueduct, the water, bed, banks and floodgates shall be considered as an integral part of the land or building for which the waters are intended. The owners of lands, through which or along the boundaries of which the aqueduct passes, cannot claim ownership over it, or any right to the use of its bed or banks, unless the claim is based on titles of ownership specifying the right or ownership claimed.
- 408) SECTION 2 The Use of Public Waters ARTICLE 504.
- The use of public waters is acquired: (1) By administrative concession; (2) By prescription for ten years.
- The extent of the rights and obligations of the use shall be that established, in the first case, by the terms of the concession, and, in the second case, by the manner and form in which the waters have been used.
(409a) ARTICLE 505. Every concession for the use of waters is understood to be without prejudice to third persons. (410) ARTICLE 506. The right to make use of public waters is extinguished by the lapse of the concession and by non-user for five years. (411a) SECTION 3 The Use of Waters of Private Ownership ARTICLE 507.
The owner of a piece of land on which a spring or brook rises, be it continuous or intermittent, may use its waters while they run through the same, but after the waters leave the land they shall become public, and their use shall be governed by the Special Law of Waters of August 3, 1866, and by the Irrigation Law.
(412a) ARTICLE 508. The private ownership of the beds of rain waters does not give a right to make works or constructions which may change their course to the damage of third persons, or whose destruction, by the force of floods, may cause such damage.
413) ARTICLE 509. No one may enter private property to search waters or make use of them without permission from the owners, except as provided by the Mining Law. (414a) ARTICLE 510. The ownership which the proprietor of a piece of land has over the waters rising thereon does not prejudice the rights which the owners of lower estates may have legally acquired to the use thereof.
(415) ARTICLE 511. Every owner of a piece of land has the right to construct within his property, reservoirs for rain waters, provided he causes no damage to the public or to third persons. (416) SECTION 4 Subterranean Waters ARTICLE 512. Only the owner of a piece of land, or another person with his permission, may make explorations thereon for subterranean waters, except as provided by the Mining Law.
- Explorations for subterranean waters on lands of public dominion may be made only with the permission of the administrative authorities.
- 417a) ARTICLE 513.
- Waters artificially brought forth in accordance with the Special Law of Waters of August 3, 1866, belong to the person who brought them up.
- 418) ARTICLE 514.
When the owner of waters artificially brought to the surface abandons them to their natural course, they shall become of public dominion. (419) SECTION 5 General Provisions ARTICLE 515. The owner of a piece of land on which there are defensive works to check waters, or on which, due to a change of their course, it may be necessary to reconstruct such works, shall be obliged, at his election, either to make the necessary repairs or construction himself, or to permit them to be done, without damage to him, by the owners of the lands which suffer or are clearly exposed to suffer injury.
(420) ARTICLE 516. The provisions of the preceding article are applicable to the case in which it may be necessary to clear a piece of land of matter, whose accumulation or fall may obstruct the course of the waters, to the damage or peril of third persons. (421) ARTICLE 517. All the owners who participate in the benefits arising from the works referred to in the two preceding articles, shall be obliged to contribute to the expenses of construction in proportion to their respective interests.
Those who by their fault may have caused the damage shall be liable for the expenses. (422) ARTICLE 518. All matters not expressly determined by the provisions of this Chapter shall be governed by the Special Law of Waters of August 3, 1866, and by the Irrigation Law.
What is the right of the owner?
Right to use and quiet enjoyment. Right to allow others a right to use (licenses and leases) Right to privacy and to exclude others. Right to disposition or to transfer the property to someone else by selling, gifting or inheritance.
What is owner in construction project?
The Role of the Owner in the Construction Project: Doing More Than Writing Checks It was during one of those interminable construction site meetings that a comment was made that caused this writer to pause then agree. The architect and the general contractor were arguing as usual about the typical question of whether cost saving techniques proposed by the architect would actually save money or cause chaos and their dispute deteriorated into mutual recriminations then mutual protestations that each had the hardest task in the construction project and no one else on the project understood how hard their particular task was.
The Owner, who was suffering through his first real construction project broke in. “You guys have it easy. Each of you has a job that’s tough. I have the job of supervising the big picture and getting the moneyplus I have to handle you guys as well.” He was right. Risk allocation is a fundamental consideration in all contracts.
Usually, parties to construction contracts will seek to include provisions that limit and distribute their respective risks, duties, responsibilities and liabilities. Such provisions can be unreasonable in their attempts to shift responsibilities from one party to another, and should, therefore, be scrutinized very closely during contract formation and negotiation.
Even where express contract provisions are provided, the law generally imposes implied warranties, duties, and responsibilities on the parties. See the other articles on this web site on Construction Law and Litigation. The person “in charge” of the overall project is usually termed the “Owner” and is often the only nonprofessional in the entire project.
It is critical for each Owner, until he or she has built numerous projects, to understand that they are operating under a significant handicap. Not only must they contend with professionals who do these types of projects (and create form contracts) for a living, but the various builders and suppliers have finite tasks while the Owner must assume financial responsibility for the success of the entire project.
- Owner duties and responsibilities that have arisen in typical disputes include: 1.
- Providing financing for the project.2.
- Providing site surveys.3.
- Securing and paying for easements.4.
- Warranting the plans and specifications.5.
- Warranting owner furnished materials.6.
- Disclosing superior knowledge.7.
- Acting on clarifications and changes.8.
Interpreting the documents.9. Cooperating with the contractor.10. Selecting all professionals on the project.11. Interacting with various governmental bodies.12. Interacting with real estate professionals to sell the finished project.13. Interacting with title companies to facilitate the sales.
TYPICAL OWNER OBLIGATIONS 1. Financing the work It’s the money, honey.
Above all, the Owner must assure adequate funding for the project to be paid in a timely manner. And part of that task is to arrange reserve funding for the inevitable problems that arise in any job. Some would list this as the owner’s first responsibility to the contractor, and it is probably the primary area of disputes between owner and contractor.
In the case of a public bid, if the funding source had not been properly secured, it is at best unfair to those contractors who had taken the time and expended the energy (and money) to bid the project. Once the project is underway, one of the owner’s primary responsibilities, as far as the contractor is concerned, is to secure funds to allow payments as prescribed in the contract.
Related issues include: (a) The timing of payables Payments to the contractor are typically made after receipt of each invoice within the time period specified, or within the requirements of appropriate legal statutes. The contract language itself often determines which takes precedence.
- If the contractor has met the necessary requirements, the owner can become responsible for subsequent delay and possibly consequential damages, such as interest charges.
- Most cases involve disputes over owner partial payments, late payment or non-payments to contractors and/or designers.
- After all, when all is said and done, isn’t construction about money? (b) Rates and amounts corresponding to the actual job progress If materials can be substantiated to be properly stored on the site and/or installed in-place in an acceptable manner considering all project requirements, the owner will typically pay for those materials.
An alteration of the process by the owner for convenience may create a hardship on the general and subcontractors which may entitle them to compensation. On the other hand, contract abandonment and termination cases often involve disputes over the reconciliation between the aggregate amount of material delivered, installed and paid-for, and the aggregate uninstalled amount of material remaining on-site.
Have you ever heard someone say that “material walked-off the site”? Equally typical disputes are installation that is defective and must be removed; installation that interferes with later equally vital installation; installation done out of order; or installation that is not complete. All these areas must be resolved or payment disputes are inevitable.
Remember, the financing institution normally pays predicated on amount of completion and the owner may find that the financial institution refuses to release funds due to disputes as to amount of completion. (c) Contingency for changes Change orders are a normal part of the construction process.
- As such, the owner has an obligation to anticipate their occurrence.
- Public project funding will incorporate some additional percentage (often 5% to 7%) of the project bid amount to be budgeted to fund legitimate changes as they occur.
- Responsibility for the delay in the owner’s response to proper contract changes that results from lack of, or late availability of, funds will often rest with the owner.
Change orders occupy the single greatest source of litigation/arbitration in construction projects in the United States. The owner must both master the procedure for handling change orders, and keep accurate and complete reconciliations of how much they are costing and if funds are available to handle them.2.
- Providing site surveys It is the owner’s responsibility to provide complete and accurate relevant data, as may become necessary for correct installation of the work.
- The contractor is typically responsible for the correct layout and execution of the work.
- A) Establishment of property lines The most basic information provided by the owner includes the project property lines, or at least the contract limit lines within which the contractor has the right to operate.
We have worked on a number of disputes involving damages issues resulting from inaccurate existing data or the improper layout of property lines. (b) Site material composition If excavation is required, geo-technical data describing the soil composition that will have to be dealt with is a fundamental prerequisite.
- The interesting corollary here is that the boring and soils information should be given in locations properly relevant to the construction.
- If, as arose in a recent case, the boring information around the perimeter of a foundation indicates dry gravel, with a low water table, and no information regarding the soils characteristics is given within the foundation area, the contractor may assume dry gravel with no water in the way of the excavation exists throughout the entire foundation construction.
When either rock or soup is subsequently encountered while excavating the interior portions of the foundation (where no specific information had been given), the contractor may be entitled to additional compensation. (c) Baselines and benchmarks The contractor is most often responsible for the layout of the work from baselines furnished by the owner.
- These data should be physically located on the site, and the owner assumes responsibility for and/or warrants its correctness.
- If, as occurred in a recent case, the project is then correctly laid out by the contractor relative to the baselines and benchmark, errors in the project layout transmitted from incorrect baseline or benchmark information would typically fall to the owner’s account.
(Here, the architect may be at fault and may face liability from the owner. Nevertheless, the owner can expect to face liability to the contractor for providing such incorrect information.) (d) Utility locations The owner is typically responsible for providing accurate locations of all existing utilities.
Locations of telephone lines may be necessary to tie-in new building services or may be necessary to prevent accidental interruption. Correct sanitary and storm line locations and elevations are critical to the design of underground drainage systems and tie- ins. Invert elevations are also necessary to allow proper estimates of the amount of excavation and backfill for the respective lines.
If, as a rose in a recent case, the invert elevation indicated on the drawings as 43.0 ft. is actually 38.0 ft., the additional 5 ft. of excavation depth may require shoring or greater trench width – all at increased cost to the contractor. If this is due to an improper representation on the drawings of the subject utility location, the owner will often pay for the increased costs.
- E) Effects of adjacent properties The relationship of adjacent properties may be significant to the construction on the site.
- An important piece of information that may not be disclosed in the contract documents and may not be readily apparent in a pre-bid site investigation by the contractor, for instance, are the drainage characteristics of a surrounding property.
If, as arose in a recent case, surface water from several acres of land drains into a swale that creates an active watercourse through the site that lasts several days each time it rains, the responsibility for resulting downtime, additional drainage requirements, and rework of the affected areas will likely rest with the owner.3.
Securing and paying for easements (a) Site access The contractor typically expects to have access to the site, even if such access is limited or restricted, as may be the case when working within a military complex, a security area of a manufacturing facility, or some similar environment, and the particulars should be made known to the contractor prior to the bid.
On the other hand, the contractor should consider the potential lost time and attendant costs associated with site access. If, as arose on a recent project, these or any other types of access restrictions were not made clear prior to the commencement of the work and are not apparent in a reasonable pre-bid site investigation, the contractor will probably not be expected to carry the associated resultant additional financial burden.
(b) Agency approvals It is often the owner’s responsibility to secure all agency approvals prior to the start of work. In the absence of any noted exceptions in the contract documents, the contractor has the right to expect that such administrative matters have been taken care of. Even when the contractor is responsible for securing and paying for the building permit, as is usually the case, this responsibility amounts to a formality requiring a small amount of clerical paperwork and a payment to the jurisdiction in which the project is located.
The contractor has the right to expect that, by the time the building permit is applied for, all building code requirements have been met by the design, and the permit procedure should not require any effort beyond a simple filing. If any delays in securing the building permit result from code noncompliance of the design, the owner may be responsible for the resulting costs.4.
- Warranting the plans and specifications The owner usually warrants the adequacy of the plans and specifications on many projects and, therefore, bears the responsibility for any defects or deficiencies in them.
- Such defects can exist in many forms, but tend to fall into the two categories: product and time,
Most defective specifications problems involve the inaccuracy of the technical specifications, Time, then, most often becomes a consequential consideration related to the failure of the contract to provide the technical requirements accurately and completely.
- Typical situation: in the middle of a critical early part of the project, the wrong requirements for some product results in the building inspector rejecting the work.
- The new product must be specially ordered which delays the project for two weeks and costs a great deal to produce.
- All the other trades are delayed; some go to other projects which interfere with the timely performance on the immediate project, etc, etc.
A part costing only a few hundred dollars can end up costing tens of thousands in delays.) 5. Warranting owner furnished materials Where the owner furnishes material and/ or equipment to the contractor for use in the work, there is a warranty that these items will be suitable for their intended purpose.
Beyond the fundamental compatibility of materials, the owner is also responsible for the timing and coordination of the respective items in the same manner and extent as every other subcontractor and supplier. Shop drawings and other coordination information should be submitted and distributed correctly and in a timely manner, and material deliveries should be made within the requirements of the progress schedule.6.
Disclosing superior knowledge The owner has a duty to disclose superior knowledge to the contractor that may directly or indirectly relate to the work, where that knowledge is either unknown by, or has not been made available to, the contractor. Referring back to the boring data case example, assume that the boring and soils data did in fact exist for the interior portions of the construction, but the data was intentionally left out of the contract.
The hope that the contractor might absorb the cost of working through the rock (once it is finally encountered) that would have otherwise been disclosed by the proper inclusion of the relevant information may leave the owner with liability. Likewise, where the owner’s superior knowledge of a factor, such as the unavailability or inadequacy of a specified material, would lead to reduced costs, improved efficiency, or simply an earlier disclosure of a problem, the owner has an obligation to so advise the contractor.
Allegations relating to whether or not the owner knew or should have known that the project could not be built in the time specified in the contract commonly refer to the owner’s “superior knowledge.” If, as arose in a recent case, one general contractor informed the owner that, in his judgment, the project could not reasonably be built in one-year, was that owner obligated to pass that contractor’s unsolicited opinion on to the other bidders? Probably.
Certainly if the owner did not one could expect that issue to be hotly litigated should the project go wrong.7. Action on clarifications and changes Construction contracts, whether produced by and for a private owner or public agency, recognize the need and importance of timeliness with respect to issuing clarifications and reviewing change orders.
This is an acknowledgment that change orders can interfere with and disrupt the orderly sequence of the work and that they should be resolved as quickly as possible to minimize their potential direct and consequential impact on construction. The process of anticipating, identifying, pricing, negotiating and executing changes, change orders and change directives is perhaps the most prominent thread through most construction disputes.
And, it is a process that exposes human frailties and faults in virtually all forms and varieties. Acts of generosity, greed, ignorance and laziness are not uncommon. Change orders account for most construction disputes. They are inevitable; they are controversial; and even if the contract provides for clear processes, most courts and arbitrators will ignore any terms that strike them as “unfair.” Above all areas in the owner’s realm of responsibility, change orders are the ones that require the most attention and care.8.
Interpretation of the documents Although the architect normally researches and prepares recommendations for technical matters relating to design, when involving quality, cost and/or time, these corrections, changes, and interpretations are communicated to the owner who often controls the final disposition on the matter.
Actual authority for some portion of the process may rest with the architect. Because no direct contractual tie exists between the architect and the contractor, however, responsibility for the architect’s performance in these situations rests with the owner.9. Cooperating with the contractor Even when not expressed in the contract, it is generally understood that the owner has an implied duty to cooperate with the contractor to the best of his ability, and not to impede, hinder, obstruct, or interfere with the work.
The same concept applies to the contractor. Although this sounds simple, its success or failure often boils down to the personalities involved. Both parties are focused on the traditional objectives of time, cost and budget, but to differing degrees and from different perspectives.
A consistent theme in disputes is the disintegration of cooperation as a result of conflicts between owner and contractor over the achievement of time, cost and quality objectives.10. Selecting all professionals on the project. Long before there is a contractor, the owner makes what may be the most vital decisions on the typical construction project: what contractor, architect, CPA, attorney, real estate broker, engineer, bank officer, etc.
to utilize. Most often, the owner selects an attorney or contractor and those people have a group of experts they often work with. More important than the job itself is the right mix of people to work on the project AND the constant supervision of the group of professionals to make sure that all tasks are being completed and that they are working well together.
It must be recalled that the tools for litigation, such as Mechanics Liens and Stop Notices can delay or even destroy a project and that to avoid such disastrous tools one must have the right group of professionals, get the best advice, and make sure that long before such documents are recorded the owner has taken every step possible to remedy the situation: and that requires the best group of professionals one can find.11.
Interacting with governmental bodies Particularly in California, zoning, land use, the various inspection agencies, neighborhood groups, etc, etc. form a complex web of often competing interests that must be addressed and dealt with. More than any other aspect of the project, these “problems” do not go away if ignored.
- The architect, contractor and attorney should each be assigned specific tasks for interaction but, ultimately, it is the owner who must make sure each and every agency and local group is contacted and all documents and forms filled in correctly.
- The delays otherwise caused can easily destroy a project.
Most contractors and architects in a local area pride themselves on being able to interact with the various agencies but all too often their relationship can actually be detrimental to the project. It is not uncommon for a past dispute between an architect and the Planning Department to have poisoned the atmosphere so much that the owner’s project is red lined by the department for special review-or revenge.
- The owner would do well to cross examine all the professionals to make sure no ill will exists.12.
- Interacting with real estate professionals to sell the finished project.
- Quite often the owners ARE real estate professionals but if not, it must be recognized that the typical project, once completed, must be rented out or sold.
It is vital for the owner to begin establishing the correct relationship with the real estate people who will market and sell the finished project and to negotiate the rates of compensation. Often the developer will not wish to use real estate people to achieve sales and this question should be explored closely since rapid and professional sales efforts are normally required to make a profit on a project.
Do not assume that the super heated market of California in the 90’s is typical. Most of the time the sales portion of the project can be the most difficult and interaction (and shopping for) the correct expertise in such sales if usually of critical importance.13. Interacting with title companies to facilitate the sales.
Ultimately, the title companies will determine when escrows close and a part of the project all too often ignored is making sure title is clear and unambiguous. This is particularly important in subdivisions with large common areas or with the far more common Tenancy in Common methods of ownership used more and more in California cities.
- The time to engage in such planning is long before the project ends so that by the time the real estate brokerage house is given the assignment of selling the project title is either not a question or a Quite Title Action has been brought to ensure appropriate salable lots.
- Conclusion The creation of improved property can be one of the most satisfying of all occupations.
One sees land developed capable of providing homes or offices for people; one can participate in the creative process and be part of those who create beautiful things that may last for generations. Consider: when you think of great cities or civilizations, more often than not it is the buildings that seize the imagination and most buildings of most great cities were built not by the government but by private owners much like here.
- Paris may have beautiful public buildings but it is the private apartment houses and homes that give the city its unique charm.
- But to counter that creative and often profitable advantage is the need to take risk and master a entire galaxy of skills and the above list is only the beginning.
- Getting experienced assistance is a must for the new developer and retaining a flexible mind, keeping alert to the innumerable problems that inevitably ariseand keeping a sense of humor are all central metal preparation for this remarkable challenge.
But if one stares at the landscape and sees the tens of thousands of structures built in just the last twenty years it is clear that the challenge, while major, is by no means impossible and after the first project is completed one can create systems that often work on their own to control the project.
What is the position of owner?
What is an Owner of a company? – The owner on the other hand does not have a specific role. Their role changes depending on the company and the needs of their company. An ‘owner’ is someone who owns 100% percent of the company. While, a ‘co-owner’ owns part of a company along with a partner or multiple partners.
What is the role of manager and owner?
Page 5 – Paul Sr., a true entrepreneur, spotted a need in the marketplace for a well-made widget. Little did he envision the wild success of his enterprise. With this success, Paul Sr. realized he could provide employment for his offspring and that one day the business might be theirs.
The eldest second-generation sibling became a physician; the other three joined the business and over the years became successful managers in their respective departments. All of the four siblings married and had their own offspring. The ten children of the family managers grew up in a close cousin environment because of their parents’ work; hence, they spent a lot of time together.
The three children of the eldest sibling, who was not part of the business, were less connected to their cousins. At age 70, Paul Sr. began to think about retirement, what to do with the company and how to structure his estate. He quietly made the decision that since the eldest sibling had done well as a physician and had nothing to do with the company, a fourth of Paul Sr.’s outside investments would suffice as his inheritance.
The three siblings who worked in the company would inherit their share of the outside investments and would also inherit the company itself. After all, they had helped make the company successful. Upon Paul Sr.’s death, the second-generation siblings, in honor of their father’s vision, developed a policy that only the family members who were managers in the company could own it.
They did not foresee how this ownership policy would challenge the third generation, only one of whom was interested in working in the business. The policy also challenged the cohesion of the family, as the oldest of the four siblings and his children grew more distant from their relatives.
Eventually the three second-generation siblings chose to sell the business and split the proceeds among themselves. What went awry? Why did another successful family business end at the second generation? Is there an alternative way to meet the challenge faced by this family and their business? Understanding the challenge The above scenario presents some challenges to family business survival that are unwittingly set in place by well-meaning entrepreneurs.
Family businesses are defined as enterprises influenced by an owning family. If that family becomes disengaged, the business might survive, but not as a family business. The desire to reward offspring with employment and ownership of a business must be balanced by good governance protocols and practices to meet some of the challenges to family business survival.
- More and more, family business research, looking at long-surviving family enterprises, is developing a set of best practices and sound advice that promote living legacies lasting into the fifth, sixth and seventh generation, and even more.
- What happened in this case? Management and ownership became entangled, which challenges both the professionalism of the business and the legacy of the family.
In some cases, family managers are hired and promoted on the basis of their genes rather than their professional competence. Further, when ownership is limited to family employees or family managers, the other family members are cut off from the business and from the family legacy.
These non-employee family members lose not only their connection to the family business, but also their connection to the family story. Research into family business best practices has shown that there is a better way-a way to enable the business to be professionalized and the family to stay together.
Clarifying the roles Managers are employees of a business. Owners are investors in a business. In the world of family business, both roles are played by the same people. In fact, in the first generation the founder is the owner and often the only manager.
- However, as the business matures and the family expands, more family members enter the business.
- Several family members can then be playing both roles: manager and owner.
- What about those family members not in the business? It is at this stage that each role must be clearly defined.
- The employee/manager role should be limited to those qualified in management.
The owner role should be inclusive of all family members in order to maintain the legacy. In successful businesses, the role of manager is held by professional employees chosen for their leadership role on the basis of their education and proven competence.
In a family business, there should be restricted access into management ranks based on family members’ qualifications. Manager compensation usually comes from a basic salary structure with bonuses for outstanding achievement that are funded from the excess of company profits over goals. Managers who are family members should be compensated on the same basis.
Just as all employees of a well-run company should be held accountable through professional development plans and annual reviews, family employees should be treated the same. Providing professional accountability for all employees, whether they are family or not, reassures non-family employees that promotions and compensation are based on merit, not on family genes.
- The organizational structure for managers is the management team or executive committee, which focuses on the success of the business.
- In family businesses, such a team should include both family and non-family managers and executives.
- In larger organizations, the board of directors oversees management.
Managers—even family managers—should not be voting members of their own board; rather, they should report to it. Oversight cannot be adequately provided when one is overseeing oneself! Professionalized boards also provide invaluable advice and insight to strengthen the company.
A manager’s responsibility is to receive this advice and use it in managerial decisions. Professionalizing the family manager’s role strengthens the family enterprise. Family businesses are usually closely held enterprises. That is, the owner or owners are family members. A formalized ownership structure usually is developed as the first-generation founder-owner gets ready to “pass the baton” to the second generation.
At this point, it is important to consider the ramifications of the role of family owner as investor (shareholder). Unlike access to employment in the business, access to ownership of the family enterprise should be inclusive of all family members. Such an inclusive policy can serve as a way to keep the family members together and the family legacy alive.
In a family business, ownership most often occurs through inheritance because the shares are not openly traded. Compensation for being an investor comes through distributions of some of the company’s profits and through increased share value from the company’s growth and retained earnings. For a family investor, growing and developing into a responsible owner of the family’s business requires education: education about financial matters, education about the business and education about the family legacy.
Responsible owners should be held accountable for their role as investors in the family business. These family shareholders are educated and organized through an annual meeting. If the shareholder group is large enough, it might be represented by a shareholder council or committee.
- Whatever the organizational structure, the annual meeting is a great time to have educational components focused on building sound shareholder knowledge.
- The family directors, the shareholder council or the family council can also serve as the oversight group for shareholder accountability.As discussed above, the roles of manager and of owner are distinct and separate within any business environment.
Family businesses are no different, even when some people fill each role at the same time. To aid this effort, two documents in particular are helpful: a family employment policy and a shareholder agreement. Documenting the roles Where to start in the process of writing these two documents is an individual decision; it will vary in each family business.
Two things are most clearly needed for a successful process: supportive company family managers and transparent, open and honest communication. In all my research, including my study of my own family, it was a concerned family CEO who started the process. And after the CEO realized that help was needed, an early step in the process was to hire a good guide—a professional consultant/adviser.
This does require expenditure of company funds, but as our third-generation CEO, James Warjone, clearly stated, “Investing in your investors is a wise business decision.” Change is never easy, and changing family culture can be challenging at best. Throughout the process, making sure all stakeholders are kept in the communication loop is vital.
- Good advisers can help the family members work their way through the difficult conversations.
- Choosing which governance document to write first—the family employment policy or the shareholders’ agreement—is another decision.
- What do you have? What is most needed? The most important thing is that the process of developing these documents through open discussions and many meetings will strengthen your business.
Through the process, your family managers will strengthen their professional roles, and your shareholders will know and be proud of their inherited investment, the family legacy. Charlotte Lamp, Ph.D., a family owner of Port Blakely Companies, is the principal of Rockwood Consulting LLC.
What are contractors responsibilities?
Construction (Design and Management) Regulations 2015 – A principal contractor is appointed by the client to control the construction phase of any project involving more than one contractor, Principal contractors have an important role in managing health and safety risks during the construction phase so they must have the skills, knowledge, experience and, where relevant, organisational capability to carry out this work.
plan, manage, monitor and coordinate the entire construction phase take account of the health and safety risks to everyone affected by the work (including members of the public), in planning and managing the measures needed to control them liaise with the client and principal designer for the duration of the project to ensure that all risks are effectively managed prepare a written construction phase plan before the construction phase begins, implement, and then regularly review and revise it to make sure it remains fit for purpose have ongoing arrangements in place for managing health and safety throughout the construction phase consult and engage with workers about their health, safety and welfare ensure suitable welfare facilities are provided from the start and maintained throughout the construction phase check that anyone they appoint has the skills, knowledge, experience and, where relevant, the organisational capability to carry out their work safely and without risk to health ensure all workers have site-specific inductions, and any further information and training they need take steps to prevent unauthorised access to the site liaise with the principal designer to share any information relevant to the planning, management, monitoring and coordination of the pre-construction phase
When working for a domestic client, the principal contractor will normally take on the client duties as well as their own as principal contractor. If a domestic client does not appoint a principal contractor, the role of the principal contractor must be carried out by the contractor in control of the construction phase.
What is the most important responsibility of a business owner?
Planning and strategy – Small business owners are responsible for the direction of their own company. They are in charge of creating and managing their business plan, developing their marketing campaigns, and coming up with ways to keep the company competitive and profitable. Research and planning are essential skills for a business owner.
What are the responsibilities of a contractor under the contract?
Construction (Design and Management) Regulations 2015 (CDM 2015) – A contractor is anyone who directly employs or engages construction workers or manages construction work. Contractors include sub-contractors, any individual self-employed worker or business that carries out, manages or controls construction work.
- They must have the skills, knowledge, experience and, where relevant, the organisational capability to carry out the work safely and without risk to health.
- Contractors and the workers under their control are most at risk of injury and ill health from construction work.
- Contractors therefore have an important role in planning, managing and monitoring their work to ensure any risks are controlled.
Contractors on all projects must:
make sure the client is aware of the client duties under CDM 2015 before any work starts plan, manage and monitor all work carried out by themselves and their workers, taking into account the risks to anyone who might be affected by it (including members of the public) and the measures needed to protect them check that all workers they employ or appoint have the skills, knowledge, training and experience to carry out the work, or are in the process of obtaining them make sure that all workers under their control have a suitable, site-specific induction, unless this has already been provided by the principal contractor provide appropriate supervision, information and instructions to workers under their control ensure they do not start work on site unless reasonable steps have been taken to prevent unauthorised access ensure suitable welfare facilities are provided from the start for workers under their control, and maintain them throughout the work
In addition to the above responsibilities, contractors working on projects involving more than one contractor must:
coordinate their work with the work of others in the project team comply with directions given by the principal designer or principal contractor comply with parts of the construction phase plan relevant to their work
Where a contractor is the only contractor working on a project, they must ensure a construction phase plan is drawn up before setting up the site. When working as the only contractor for a domestic client, the contractor takes on the client duties, as well as their own as contractor.
- However, this should involve them doing no more than they will normally do to comply with health and safety law.
- Where a domestic project involves more than one contractor, the principal contractor normally takes on the client duties and the contractor will work to the principal contractor as ‘client’.
If the domestic client does not appoint a principal contractor, the role of the principal contractor must be carried out by the contractor as principal contractor and the client duties must be carried out by the contractor in control of the construction phase and the client duties must be carried out by the contractor as principal contractor.