CLIENT ALERT
By: John Perten
March 23, 2020
We now know that it is just a matter of time before this current crisis either shuts your jobs down completely or, at a minimum, causes massive delays. Today, March 23rd, the Commonwealth of Massachusetts shut down all non-essential businesses effective tomorrow, March 24th, at noon. And, last week, Boston shut down all construction projects. The emergency order signed by Governor Baker exempts, on the public side: “Workers such as plumbers, electricians, exterminators, inspectors and other service providers who provide services that are necessary to maintaining the safety, sanitation, and essential operation of residences, construction sites and projects, and needed facilities.” This seems to limit construction activities to those aimed at maintaining construction sites as opposed to improving (constructing) new projects. For the private sector, the emergency order exempts: “Construction Workers who support the construction, operation, inspection, and maintenance of construction sites and construction projects (including housing construction).” This is a bit unclear as “support” would appear to a broader verb than merely “maintain”. Read literally, it appears to allow activities that permit construction to proceed to continue. Given the context it seems unlikely that this was what was intended. We are seeking clarification of this order.
While some of this will be a wait and see game as we monitor how this whole situation plays out, there are a few things that you might want to think about immediately.
- Stay in communication with your clients. They are in this together with you and being transparent with them may avoid litigation down the road.
- If you are delayed, remember to get a change order extending the date of substantial completion.
- Review your contracts and make sure there is a “force majeure” clause there (that’s the one that says you are not responsible for Acts of God, earthquakes, strikes, etc.). The virus should qualify. Force majeure may provide an opportunity to terminate the contract or suspend it, and may obligate the owner to pay regardless of the event.
- Check your subcontracts to see what your rights are in the event the owner suspends or terminates the prime contract. Don’t forget to make sure you give whatever notices you have to give to subcontractors.
- Check with your insurance provider to see if you have business interruption coverage and, if so, whether it provides coverage for interruption caused by the Covid-19.
- Make sure you are up to date on employment laws as you will have to figure out what to do with your employees if they cannot go to the job site (and our employment lawyers are here to help you).
We will continue to monitor this situation and update this alert as the situation unfolds.