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COVID-19 & Your Construction Business - A Triage Checklist

Client Alert

Many business operations are shutting down at an alarming pace. The coronavirus (“COVID-19”) pandemic is already impacting the construction industry and creating uncertainty for the progress of current and future projects. Small/mid-size businesses may not be in financial position to sustain prolonged economic revenue declines. Navigating the next few months will be vital in preserving existing business relationships and planning for future business when the conditions improve. BMD offers some practical advice to manage risks and take reasonable precautions during this pandemic.

The following checklist is designed to help you identify prudent actions so you can successfully navigate the unknown:

Prioritize the Health and Welfare of Your Employees and Clients:

  • Make sure your employees, contractors, suppliers and facilities are safe and smart - forced quarantine will result in labor shortages and shutdowns
  • Over-communicate about best safety practices with employees and clients
  • Assess current projects and enforce heightened safety obligations
    • Ongoing projects in medical facilities? Nursing homes? Schools?
    • Mandatory temperature testing prior to entering healthcare facilities
    • Daily questionnaires regarding potential safety basics
    • Anything from washing hands to properly shielding coughs
  • Consult the CDC and/or State departments of health for guidance.
    Ex: https://www.cdc.gov/coronavirus/2019-ncov/downloads/workplace-school-and-home-guidance.pdf

Run Your Business:

  • Create and enforce an effective company policy approved by your employment attorney
  • Internal communications are vitally important
    • Promote safe practices in the workplace
    • Identify essential staff and functions
    • Prepare, equip and train staff to work remotely, if possible or if deemed mandatory
  • Review Employment Policies and enact emergency policies, if necessary
      • Sick leave
      • Family medical leave
      • Performance expectations
      • Protocol for working remotely

Evaluate Current Projects:

  • Prioritize clients and proper allocation of resources for projects
  • Evaluate availability of workforce, now and in the future when workers become ill
  • Evaluate supply chain impact on materials and supplies
    • Inventory and ration materials where possible
    •  

Review Your Contracts:

  • Review current contracts
  • Do not assume you have an ‘out’
    • Not all construction contracts have ‘force majeure’ provisions
    • Consult §8.3.1 of the AIA A201 regarding circumstances that may be commonly described or accepted as ‘force majeure’ events
  • Consider negotiating a modification of existing contracts and key terms
    • Consult §1.1.1, 1.1.2, 2.5, 3.11, 4.1.2, 4.2.1, 5.2.3, 7, 8.3.1, 9.7, 10.3.2 of the AIA A201 regarding modification
      • Contract duration
      • The goods/services involved in the contract
        • Adding or subtracting goods/services covered in the contract
      • The payment terms
      • The delivery terms
  • Determine notification requirements if performance is impossible or impractical and you are seeking to delay or excuse performance
    • §15.1.6 and §15.1.3 of the AIA A201 provides guidance on claims for delay
  • Do not ‘Self Help’ or bury your head in the sand
    • Communication and transparency are vital
    • Be pro-active and reasonable

Review Your Insurance Policy:

  • Coverage for the treatment of infected employees
  • Coverage for lawsuits filed by employees or other parties relating to COVID-19 exposure
  • Coverage for loss of revenue associated with epidemics, pandemics, and viruses such as COVID-19, governmental shutdown, or limitation of access to an insured’s business
  • Loss of earnings caused by delays or government (foreign or domestic) actions
  • Provide proper written notice of claims to avoid waiver of rights

If you have any questions, or for more information, please contact any member of the BMD Real Estate or Construction Law teams.


Valley National Bank/Trulieve Loan: A Big Step Out of the Shadows

In a late December press release, Trulieve announced that it had secured a $71.5 million commercial bank loan. In addition to the amount of the loan, which may be the largest commercial bank loan to date to a cannabis company, the release prominently identified Valley Bank and featured both a quote from Valley’s Senior Vice President, John Myers, and a description of the Bank’s service platform and commitment to the cannabis industry.

The End of Non-Competes? The Impact It Will Have on the Healthcare Industry

On January 5, 2023, the Federal Trade Commission (“FTC”) announced a proposed rule that, if enacted, will ban employers from entering into non-compete clauses with workers (the “Rule”), and the Rule would void existing non-compete agreements. In their Notice, the FTC stated that if the Rule were to go into effect, they estimate the overall earnings of employees in the United States could increase by $250 billion to $296 billion per year. The Rule would also require employers to rescind non-competes that they had already entered into with their workers. For purposes of the Rule, the FTC has defined “worker” to also include any employees, interns, volunteers, and contractors.”

2022 Healthcare Recap and 2023 Healthcare Check-Up

As the country begins to return to a new “normal” following the COVID-19 pandemic, there are many healthcare rules changing on both the federal and state levels as a result. Thus, it is important for healthcare providers and their employers to be aware of these changing rules, and any implications they may have on their practice. Look back on healthcare in 2022 and find a checklist for 2023.

Direct Support Professional Retention Payments

On December 15, the Ohio Senate and House passed House Bill 45, which authorizes the Department of Developmental Disabilities (DODD), in conjunction with the county boards of developmental disabilities, to launch their initiative to issue retention payments to Direct Support Professionals (DSPs). These retention payments will be distributed quarterly to participating home and community-based waiver providers to address the workforce crisis in the direct provider sector. Governor DeWine needs to sign the Bill to begin the payments, but he is expected to do so by the end of 2022.

Real Estate Investors Position for 2023 Opportunities

Real estate investors weathered another year in a post-pandemic world, with the year closing with yet another interest rate increase coupled with both uncertainty and heightened interest carrying into 2023. Just last Wednesday, the Federal Reserve raised its benchmark interest rate 0.50 percentage points, shifting the target range to 4.25% to 4.50%. The new level is the highest the fed funds rate has been since December 2007 and marks the seventh rate hike this year. So what does this mean to investors, brokers, lenders, and others in the real estate world? Read a few perspectives below from stakeholders familiar with our BMD clients and the markets in which they do business.