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Professional Practice Terms

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What is a change order?
A change order is a per-change charge for changes made to an order. This is needed when the client is indecisive about the needed product. To be fair to the product designer, a charge per change is assessed before carrying out the modification. The price of modification could serve as a penalty to the client to discourage interative design and encourage pre-design analysis.
What is a Indeminify?
Indemnification is a promise, usually as a contract provision, protecting one party from financial loss. This is sometimes stated as a requirement that one party "hold harmless" the other. Indemnification is a type of insurance, which protects one party at the expense of the other. Indemnification can either by direct payment or reimbursement for the loss. Indemnification clauses cannot usually be enforced for intentional tortious conduct of the protected party.
What is a mechanic's lien?
A mechanics lien is a hold on real property for the benefit of someone whose work or property improves the property. It is called by various names, including materialman's lien, supplier's lien, laborer's lien, construction lien and others. Through "perfecting" a lien, the technical term for establishing a mechanics lien, the owner's title to the property suffers an interference that will have to be addressed before the owner can restore clear title. Generally, a lien would only arise if there is a payment dispute, although some states (e.g. California) require pre-lien notices at the beginning of a project. Since real property ownership is mostly a function of state law, establishing a mechanics lien is mostly a process governed by state law, in particular a mechanics lien statute.
What is a punch list?
The punch list is a list created at the end of the project. It contains a list of items or tasks that need to be repaired or completed. The list is created by the owner and confirmed by the contractor.
What is a Performance bond?
A performance bond is a bond issued by an insurance company to guarantee satisfactory completion of a project by a contractor.

For example, a contractor may cause a performance bond to be issued in favor of a client for whom the contractor is constructing a building. If the contractor fails to construct the building according to the specifications laid out by the contract (most often due to the bankruptcy of the contractor), the client is guaranteed compensation for any monetary loss up to the amount of the performance bond.

Performance bonds are commonly used in the development of real property, where an owner or investor may require the developer to assure that contractors or project managers procure such bonds in order to guarantee that the value of the work will not be lost in the case of an unfortunate event (such as insolvency of the contractor).
Sole Proprietorship?
A Sole proprietorship is a business which legally has no separate existence from its owner. Hence, the limitations of liability enjoyed by a corporation do not apply. All debts of the business are debts of the owner. It is a "sole" proprietor in the sense that the owner has no partners. A sole proprietorship essentially means a person does business in their own name and there is only one owner. A sole proprietorship is not a corporation, it does not pay corporate taxes, but rather the person who organized the business pays personal income taxes on the profits made, making accounting much simpler. A sole proprietorship need not worry about double taxation like a corporation would have to.
Surety Bonds?
A surety bond is a contract between at least three parties: (i) the principal, (ii) the obligee, and (iii) the surety. Through this agreement, the surety agrees to make the obligee whole (usually by payment of money) if the principal defaults in its performance of its promise to the obligee. The contract is formed so as to induce the obligee to contract with the principal, i.e., to demonstrate the credibility of the principal.

Suretyship bonds originated hundreds of years ago as a mechanism through which trade over long distance could be encouraged. They are frequently used in the construction industry: in order to obtain a contract to build the project, the general contractor (and often the sub-contractors as well) must provide the owner a bond for its performance of the terms of the contract. Conversely, owners and contractors may also provide payment bonds to ensure that subcontractors and suppliers are paid for work done. Under the Miller Act, payment and performance bonds are required for general contractors on all U.S. federal government construction projects where the contract price exceeds $100,000.00.
Cost plus contract?
A Cost-plus contract is a contract framed in such a way that when the contractor finishes the agreed-upon work, they receive compensation equal to their expenses plus some bonus (which can be either a fixed amount or proportional to the expenses). Even if the contractor suffers cost overruns, they will still receive full compensation plus their expected profit. There is little or no direct financial incentive to minimize costs, since the contractor will always be fully reimbursed (plus profit) upon contract completion. This is in contrast to a fixed-price contract.
Statute of limintations?
A statute of limitations is a statute in a common law legal system that sets forth the maximum period of time, after certain events, that legal proceedings based on those events may be initiated. In civil law systems, these provisions are usually part of the civil code or criminal code and are often known collectively as "periods of prescription" or "prescriptive periods."
As-Built Drawings?
Drawings of the finished and built design including changes.
Bid Bond?
bid "performance" bond consisting of a small percentage (1-3%) ofthe tender contract price, refunded to losers once the contract is awarded.
Davis-Bacon Wages?
The Davis-Bacon Act of 1931 is a United States federal law which established the requirement for paying prevailing wages on public works projects. All federal government construction contracts, and most contracts for federally assisted construction over $2,000, must include provisions for paying workers on-site no less than the locally prevailing wages and benefits paid on similar projects.
Tort Laws?
Under United States tort law, torts are generally divided into three categories: intentional torts, negligence, and strict liability torts.

Intentional torts
Intentional torts include those actions that are intentional and voluntary and that are made with knowledge by the tortfeasor (i.e. the person who committed the tort) upon the plaintiff (the one who brings the complaint seeking relief). Intentional torts include: battery, assault (apprehension of harmful or offensive contact), false imprisonment, intentional infliction of emotional distress (IIED), invasion of privacy, fraud, defamation of character (includes libel, which is written defamation of character and slander, which is non-written defamation of character), malicious prosecution, abuse of process, the real property tort of trespass to land, and the personal property torts of conversion and trespass to chattels.

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Negligence
Amongst unintentional torts one finds negligence as being the most common source of litigation in most American courts. It is a form of extracontractual liability that is based upon a duty of care of a reasonable person, who, being the proximate cause of damages, and but for the tortfeasor's act, is the cause of damages to the plaintiff. Other non-intentional torts include negligent infliction of emotional distress (or NIED, not recognized in all states), malpractice (professional negligence), and product liability (liability of manufacturers, wholesalers and retailers for unreasonably dangerous products).

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Strict liability
Strict liability torts are brought for injuries resulting from ultrahazardous activities, for which the defendant will be held liable even if there was no negligence on his/her part. Strict liability also applies to some types of product liability claims and to copyright infringement.

Most tort claims or causes of action arise under state law and are heard in state courts. Some state tort claims are heard in federal courts under doctrines like diversity of citizenship of the parties or supplemental jurisdiction; such topics are the core of the standard American civil procedure course and are too complex to summarize here. See United States district court for more information.

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Federal torts
There are relatively few tort claims available under federal law. The most common federal tort claim is the 42 U.S.C. § 1983 remedy for violation of one's civil rights under color of federal or state law, which can be used to sue for anything from a free speech claim to use of excessive force by the police. Tort claims arising out of injuries occurring on vessels on navigable waters of the United States fall under federal admiralty jurisdiction.
code of ethics?
In the context of a code adopted by a profession or by a governmental or quasi-governmental organ to regulate that profession, an ethical code may be styled as a code of professional responsibility, which may dispense with difficult issues of what behavior is "ethical".

Some codes of ethics have the force of law; these are often promulgated by the (quasi-)governmental agency responsible for licensing a profession. Violations of these codes may be subject to administrative (e.g., loss of license), civil or penal remedies. Other codes can be enforced by the promulgating organization alone; violations of these codes is usually limited to loss of membership in the organization. Other codes are merely advisory and there are no prescribed remedies for violations or even procedures for determining whether a violation even occurred.
OSHA
The United States Occupational Safety and Health Administration (OSHA) is an agency of the United States Department of Labor. It was created by Congress under the Occupational Safety and Health Act, signed by President Richard M. Nixon, on December 29, 1970. Its mission is to prevent work-related injuries, illnesses, and deaths by issuing and enforcing rules (called standards) for workplace safety and health.
Accrual basis
Accrual basis
Accrual-basis accounting records financial events based on events that change your net worth (the amount owed to you less the amount you owe others). Standard practice is to record and recognize revenues in the period which they incur and to match them with related expenses in a process known as matching or expense matching. Even though cash is not received or paid in a credit transaction, they are recorded because they are consequential in the future income and cash flow of the company. Accrual-basis is GAAP compliant.

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Example
Your landlord would record an income event on the day your rent comes due (you owe it to him). He records an expense event when the fee owed to the rental agent comes due for your apartment that month (he owes it to the agent). The details of the actual cash flows and their timing are tracked by bookkeeping.
AIA Document b163
The standard document used by LA's to outline professional services
Substantial completion
when a project is complete and ready for inspection as informed by the contractor. A punchlist is made by the LA at this time, if necessary
Final completion
Point at which contractor has resolved all items on the punchlist and the CA gives go ahead for contractor to receive final payment
Final payment
When contractor recieves final payment after he supplies certification that all labor wages, equipment, materials, etc have been paid by the contractor to his subs and suppliers
Arbitration?
Arbitration, in the context of United States law, is a form of alternative dispute resolution — specifically, a legal alternative to litigation whereby the parties to a dispute agree to submit their respective positions (through agreement or hearing) to a neutral third party (the arbitrator(s) or arbiter(s)) for resolution.

Arbitration may also serve a distinct purpose: as an alternative to strikes and lockouts as a means of resolving labor disputes. Labor arbitration comes in two varieties: interest arbitration, which provides a method for resolving disputes about the terms to be included in a new contract when the parties are unable to agree, and grievance arbitration, which provides a method for resolving disputes over the interpretation and application of a collective bargaining agreement.
ASLA
The American Society of Landscape Architects is the national professional association representing landscape architects, with more than 15,000 members and 48 chapters, representing all 50 American states, US territories, and 42 countries around the world.

The Society was founded on January 4, 1899 with the following goals:

To establish landscape architecture as a recognized profession in North America;
To develop educational studies in landscape architecture; and
To provide a voice of authority in the "New Profession".
Its founding members were:

Nathan Barrett
Beatrix Jones Farrand
Daniel W. Langton
Charles N. Lowrie
Warren H. Manning
Frederick Law Olmsted, Jr.
John Charles Olmsted (the Society's first president)
Samuel Parsons, Jr.
George F. Pentecost, Jr.
Ossian Cole Simonds
Downing Vaux (son of Calvert Vaux)
ASCE
The American Society of Civil Engineers (ASCE) is a professional body, founded in 1852, to represent members of the civil engineering profession worldwide. It is the oldest national engineering society in the United States.

Its world headquarters is in Reston, Virginia.
Joint Venture
A joint venture (often abbreviated JV) is a legal entity formed between two or more parties to undertake economic activity together. The parties agree to create a new entity by both contributing equity, and they then share in the revenues, expenses, and control of the enterprise. The venture can be for one specific project only, or a continuing business relationship such as the Sony Ericsson joint venture. This is in contrast to a strategic alliance, which involves no equity stake by the participants, and is a much less rigid arrangement.

Organizations can also form joint ventures, for example, a child welfare organization in the Midwest initiated a joint venture whose mission is to develop and service client tracking software for human service organizations. The five partners all sit on the joint venture corporation's board, and together have been able to provide the community with a much-needed resource.
Equal opportunity employer
Equal opportunity is a descriptive term for an approach intended to give equal access to an environment or to ensure people are not specifically excluded from participating in society, such as education, employment, health care on the basis of immutable traits. Equal opportunity practices include measures taken by organizations to ensure fairness in the employment process.

Equal opportunity practices that are race-blind or gender-blind may be distinguished from practices that involve or require affirmative action or reverse discrimination. The United States federal government and various state and local governments require affirmative action in terms of governmental hiring and contracting; many other countries make such action illegal.

The method of providing equal opportunity is often a subject of controversy, as is the means by which to measure the success or failure of equal opportunity policies. Opportunity itself is often difficult - if not impossible - to accurately measure. Thus, in practice, equal opportunity is said to exist when people with similar abilities reach similar results after doing a similar amount of work. In other words, equal opportunity is measured by the degree of equality of outcome that it generates. Indeed, equal opportunity and equality of outcome are often seen as complimentary. For example, as long as inequalities can be passed form one generation to another through gifts and wealth inheritance and that social darwinism is inherent in society, it is unclear that equality of opportunity for children can be achieved.
Jurisdiction
In law, jurisdiction (from the Latin jus, juris meaning "law" and dicere meaning "to speak") is the practical authority granted to a formally constituted legal body or, or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility.

As a topic, jurisdiction draws its substance from Public International Law, Conflict of Laws, Constitutional Law and the powers of the executive and legislative branches of government to allocate resources to best serve the needs of its native society.
Proprietary
Proprietary indicates that a party, or proprietor, exercises private ownership, control or use over an item of property, usually to the exclusion of other parties.

Where a party, holds or claims proprietary interests in relation to certain types of property (eg. a creative literary work, or software), that property may also be the subject of intellectual property law (eg. copyright or patents).
Equity
A body of rules which provides a measure of fairness not always available under statute or common law. It allows additional procedures to be granted in court proceedings.
Civil Law
private law dealing with the rights and obligations of individuals and corporations in dealing with each other
Contract law
the legally binding rights and obligations of the parties who have made an agreement for a specific purpose.
Tort Law
A tort is literally a "wrong" done by one individual (corporation) to another for which remedy (compensation, injunction, etc) may be sought in the courts. Examples: Negligence, tresspass, nuisance, defamation
Strict Liability
Liability that exists independantly of wrongful intent or negligence. Example: A reservoir flooded a mineshaft on neighboring land and led to a successful claim for damages though no negligence on the part of the reservoir owner was proved.
Vicarious liability
when a party is responsible for the negligent acts of another without necessarily contributing to the negligence. Example: employers responsibility fo the acts of enployees in the course of their work. Architects liability for the defective work of consultants.
Statute of Limitations
statutes that provide a specific limited time period for bringing legal action.
Retention
An agreed upon % retained by the owner to ensure contractors continue their work performance until the completion of work.
Bonds
Enable the owner to claim relief from the surety who underwrites the contractor in the event of the latter's noncompliance with the contract requirements
Surety
One who has become legally liable for the debt, default, or failure in duty of another.
Surety bond
a bond guaranteeing performance of a contract or obligation.
Warranties
Assurances given by parties in respect of their goods and/ or services (ex: roofing) which usually lasts a stated period of time and are legally enforcable.
Indemnity
exemption from incurred penalties or liabilities. Security against hurt, loss, or damage.
Common law
the body of Law developed in England primarliy from judicial decisions based on custom and precedent, unwritten in statute or code, and constituting the basis of the English legal system.
Police Power
An inherent power of a government to exercise reasonable control over persons and property within its jurisdiction in the interest of the general security, health, safetly, morals, and welfare except where legally prohibited.
Easement
An interest in land owned by another that entitles its holder to a specific limited use.
Promulgate
To make known by open declaration . To proclaim.
Waiver
A waiver indicates the giving up by one party of right which may prevail over others.
Liquidated damages
A formula specified by the contract documents which provides an agreed method of assessing damages arising from pate completion.
Mechanic's Lein
A "hold" upon the recipients property to ensure payment of outstanding fees. A lein effectively encumbers the title of the property and may be released after satisfactory settlement of the debt.
Zoning Laws
Regulate the use of property by prescribing what uses land can be put to, and by establishing throughout the community.
Easements
Legal rights enjoyed by one property over the property of another.
setbacks
a designated distance provided in the zoning laws which designates the limits of building areas
Covenant
is a promise to do or not do a specific thing
Condition
are promises to do or not to do somethingm and the penalty for not following the set conditions is taking back the property by the grantor
restrictions
limit the use occupancy of the land
Open space
restricts development on property, and sets it aside for all to beneit
Geologic study zone
places restrictions on development to allow a govermental entity to evaluate the stability of a particular area.
Earthquake/seismic zone
Allows development but limits the development and alerts pptential owners that the area is near a known fault area.
Contract
A written document involving a promise to be fulfilled, for a specific payment at a specific time.
Lien
A form of encumberance which usually makes property secutity for payment of a debt or discharged of an obligation.
Stop Notice
A form of encumberance on funde due
Shared liability
When more than one party is cited for a tort action on the basis that they share responsibility for the act or omission complained of.In the circumstances these parties may become 'joint tortfeasors'
Professional liability insurance
Often referred to as E & O (Errors and Omissions). This insurance varies from firm to firm. Safeguards against the defense of claims the architect must finance, even if not negligent. Also, safeguards against vicarious liability.
Public liability Insurance
a general liability policy to protect against claims involving injury to persons or damage to property in connection to the architects business or premises. Example: Employee related insurance-workers comp, disability, medical. Office related insurance- building contents, documents, criminal loss
Construction contract Insurance
Insurance relating to contingencies relating to personal injury or property damage resulting from operations on site.
Restrictive covenants
restrain an owner from undertaking certain actions in relation to his/her land. Usually established by a previous owner and are often introduced in an effort to protect the character of a neighborhood, or to maintain property values. Examples: To prevent fence building, to prevent tree lopping, to prevent major changes to existing buildings.
What is the HUD?
The Dept of Housing and Urban Development created in 1965. Created to alleviate problems in urban areas by the promotion of major federal aid programs.
What is a zone?
an area that is divided up determined by specific restrictions on types of construction, as into residential and business areas.
Zoning permit?
a permit issued by an appropriate governmental authority authorizing land be be used for a specific purpose.
What is Euclidian zoning?
The most common type of zoning; it consisted of establishing specific districts or zones for particular uses, ie commercial, manuf., residential.
What is cumulative zoning?
Zoning that allows carefully regulated, multi-use districts. It has gradually developed since the 1920's.
What is a variance?
A zoning alternative which enables land to be used for a different purpose than the catergory stated in the zoning ordinance. To receive a variance, applicant must show that 1.) exceptional circumstances exist 2.) strict application of the zoning ordinance would result in hardship 3.) granting of the variance would not be detrimental to the public.
Conditional permits
Permits granted by the zoning authority contrary to an ordinance, provided the applicant agrees to fulfill certian conditions. Ex: noise control
Rezoning
When an applicant asks for land to be rezoned because no other option (variance, special use permits, conditional permits) suits their needs. Difficult and not common as it often would cause hardship to neighbors.
Floating and Bonus zones
Floating zone- located within specific zones to provide flexibility in future development
Bonus zone- allows possible dispensation from the requirements of the zoning ordinance, provided certain extras (bonuses) are built into the project for the benefit of the community. Ex: NYC bldgs provide public plazas or shopping arcades.
What is a contract?
A legally binding agreement between two or more parties, by which rights are acquired by one or more to acts or forebearances on the part of other or others.
Privity
A legal doctrine which recognizes that only a party to a contract may sue upon it. Certain exceptions include: Where an agency relationship exists, the principal is bound by contracts entered into by his agent with third parties.
What is a fixed price/ stipulated sum contract?
One party pays an acceptable sum for a specified amount of work to another party who agrees to undertake it. Nearly always used with competitively bid work (govt projects)
Advantages: Owner knows the final cost of construction at the outset of the work.Also, releases the contractor from having to keep accurate time records for the owner's scrutiny.
What is a cost- type contract?
Owner reimburses the contractor for the actual cost of completing the work, together with a negotiated fee.
Advantages: A full set of dwgs is not needed before a price is negotiated and work can begin.
Disadvantage: Owner is uncertain of the final cost and this gives the contractor no incentive to keep costs down.
What is a negotiated contract?
Where the owner can select a contractor directly based upon the their reputation, etc, then negotiate terms of payment.
What is a competitively bid contract?
When a complete set of contract docs are sent to a number of bidders who bid against each other. Usually, the lowest bidder is awarded the contract.
What do contract documents comprise of? (8)
1.) Owner-contractor agreement
2.)Conditions of the contract
3.) the drawings
4.)The specs
5.)Any addenda previously issued, or modifications (change orders,etc)
6.)Related docs and agreements
7.)Performance bond and labor and materials payment bond
8.)Owner's and contractor's insurance
What is a bid bond?
A bond that covers not less than 10% of the bid amount. Would be used to pay the owner the difference between the two lowest bids if the successful bidder decides to back out.
Performance bond?
Ensures that, in the event of the contractor failing to fulfill the contractual requirements, the surety posting the bond amount guarantees thee owner will be financially protected up to the amount expressed as the bond penalty.
Labor and materials bond?
Ensures that all bills for labor and materials will not revert to the owner in the event of nonpayment by the contractor.
What is a "Cardinal" change to the contract documents?
When the owner demands a change in the contract docs which goes beyond the intent of the original contract.Such a change may give the contractor sufficient justification to stop work and claim damages for breach of contract.
What are "Constructive" changes to the contract documents?
An occurence when the contractor is asked to undertake work:
1.)different from that required by the contract
2.)Which speeds up the project
3.)which requires added expenditure as a result of incorrect specs.

If forced to make a constructive change, the contractor may require the contract sum to be adjusted accordingly.
What is substantial completion?
When the contractor decides the project has reached a point where the owner can occupy or utilize the work for its intended purpose. A punchlist is completed at this point.
What is a retainer?
A fee paid to a lawyer or professional adviser for advice or services for a claim on services when needed.
What is a Transfer of development rights (TDR)?
TDR is the exchange of zoning privileges from areas with low population needs, such as farmland, to areas of high population needs, such as downtown areas. These transfers allow for the preservation of open spaces and historic landmarks, while giving urban areas a chance to expand and experience continued growth.
What are estates in expectancy?
Estate in expectancy (Law), one the possession of which a person is entitled to have at some future time, either as a remainder or reversion, or on the death of some one.

A. Estates in expectancy are divided into:
1. Reversions. A reversion is the residue of an estate left in a grantor or his heirs, or in the heirs of a testator, commencing in possession upon the determination of a particular estate granted or devised.
2. Future estates. A future estate is an estate limited to commence in possession at a future time, either without the intervention of a precedent estate or upon the determination, by lapse of time or otherwise, of a precedent estate created at the same time. A future estate dependent upon a precedent estate is a remainder.

EXPECTANCY: , estates. Having a relation to or dependence upon something future. 2. Estates are of two sorts, either in possession, sometimes called estates executed; or in expectancy, which are executory. Expectancies are, first, created by the parties, called a remainder; or by act of law, called a reversion. 3. A bargain in relation to an expectancy is, in general, considered invalid.
What are homestead rights?
A conveyance of real property by deed to one or more trustees of a revocable trust shall not result in the loss of homestead rights of any person executing the deed (unless the deed contains an express release of homestead rights by such person) provided that such retained homestead rights in any such property shall not be enforceable against any other person to the extent such other person acquired an interest in or lien on the property after its conveyance into the trust without having notice of the revocability of the trust. Such notice may be given by the inclusion of the word "revocable" in the name of the trust as recited in the deed, or by the recitation in the deed or a subsequently recorded document that at the time of the conveyance the trust was a revocable trust.

"Homestead" generally refers to a family's dwelling and the land upon which the dwelling rests. Under Mississippi law, families have the right to keep a certain portion of their homestead exempt from creditors. Specifically, the law exempts 160 acres or $75,000 in equity, whichever is lower, from the reach of creditors. The sole requirement of a property owner to receive this exemption is to occupy the property as his or her primary residence. However, if a spouse is over 60 years of age, he or she can still maintain that exemption, even if the property is no longer the primary residence.
What is a closed shop?
A closed shop is a business or industrial establishment whose employees are required to be union members as a precondition to employment. It is opposed to the open shop, which may represent either the unlawful refusal to hire workers on the basis of their union membership or the lawful refusal to give union members preference in hiring. It is different from the union shop, which does not require employees to be union members as a condition of employment, but does require that they join the union or pay the equivalent of union dues within a set period of time following their hire.
What is the Taft-Hartley Act?
The Labor-Management Relations Act, commonly known as the Taft-Hartley Act, is a United States federal law that severely restricts the activities and power of labor unions. The Act, still largely in effect, was sponsored by Senator Robert Taft and Representative Fred A. Hartley, Jr.. U.S. President Harry S. Truman described the act as a "slave-labor bill" and vetoed it. The Senate followed the House of Representatives in overriding Truman's veto on June 23, 1947, establishing the act as a law. The Taft-Hartley Act amended the National Labor Relations Act (NLRA, also known as the Wagner Act), which Congress had passed in 1935.
What is a special purpose district?
A special-purpose district, also known as a special district, is a type of district differing from general-purpose districts like municipalities, counties, etc., in that they only serve one or a few special purposes and do not provide a broad array of services. They are common in the United States of America, whose 29,000 districts play an important role in providing government services in every U.S. state but Alaska.[1]
Special-purpose districts provide specialized services only to those persons who live within them. They are empowered to tax residents of the district, usually by a property tax but sometimes a sales tax, for the services that they provide. They often cross the lines of towns, villages and hamlets, but rarely cross city or county lines.
Districts are created by legislative action or public referendum, and contain a district board which operates the district. The board serves as a district board of directors and is usually elected by popular vote. The board serves primarily as a legislative board and appoints a chief executive for day to day operations and decision making and policy implementation. It also retains a token judicial function in dealing with employee disciplinary matters.
Districts should not be confused with authorities which are organizationally similar, but are usually required to be financially self-supporting through fees and services rendered charges.
A good example of a special-purpose district would be a school district. Special districts are sometimes created to provide fire protection, sewer service, transit service or to manage water resources. In many states in the USA, school districts manage the schools. These districts are usually much more flexible than more geographically determined municipalities. All special-purpose districts are formed by some level of government in accordance with applicable state and federal laws and exist in all states.
What is Subrogation (regarding a subrogation lien)
the assumption by a third party (as a second creditor or an insurance company) of anothers legal right to collect debt or damages
-Subrogate- To put in the place of another
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