Business and Legal Insights

Despite recently issued stay-at-home orders across the state of Florida, most counties are allowing construction sites to operate normally for the time being. However, as the ongoing health crisis continues to escalate, key players in the construction industry can take proactive measures now in order to prepare for future issues or needs created by the pandemic.

Contractors and Subcontractors

Licensed contractors and other tradesmen should determine if affected projects are likely to be temporarily abated, or, for projects that have not begun yet, if they may be terminated due to the economic impact of various governmental restrictions being imposed. Contractors and subcontractors should consider the following proactive measures:

• Be mindful that in addition to mandatory requirements, specific owners or contractors may impose their own requirements and/or contract cancellations or revisions.
• Be sure to serve written notices in accordance with any contractual notice provisions so that your rights to additional money or time are preserved.
• In regard to rental equipment that is on a project site, if there is a likelihood that it won’t be needed for an extended time, reach out to the rental company to seek an abatement or reduction of the rent for an appropriate period of time while allowing the equipment to remain on the project site.
• Be prepared to staff incoming projects that other entities could not by minimizing the risk of coronavirus exposure to your workforce, ensuring that your company quickly prequalifies to replace those unprepared entities.

Residential and Commercial Developers

Residential developers should be acutely aware of the health and financial concerns of their buyers, particularly of those in senior living communities. Both commercial and residential developers should carefully review the terms of their financing packages as well. Developers should consider the following proactive measures:

• Websites (and/or hotline recordings) should be supplemented to include detailed information about precautions being taken to ensure residences are being thoroughly cleaned prior to closings.
• In the event of potential closing delays, buyers should be kept fully apprised to ensure the purchase and sale agreements remain in force.
• Carefully review the terms of financing packages to ensure deadlines, whether for payment or project progression, that are in danger of not being met can be extended or otherwise negotiated prior to a declaration of default.
• Review all key permit conditions to prevent non-compliance that could serve to void the permits.
  • Also review the applicability of recently implemented building permit extensions.

All businesses working within the construction industry should seek out local, state and federal information that may affect the continuation of ongoing projects, as well as those scheduled to commence in the immediate future. The construction attorneys at Shutts & Bowen continue to closely monitor the rapid developments taking place in connection to the current crisis. Our attorneys offer guidance to clients in these uncertain times on all areas impacted by the COVID-19 global pandemic, from construction and development related issues, such as force majeure, to nuanced issues involving government, government contracting and loan programs; federal and state tax-related questions; significant labor and employment questions and concerns; all aspects of financial services and real estate matters; and health care.