Joint Check Agreement Causes Big Trouble in Virginia

Many general contractors manage the risk of a subcontractor's financial instability by issuing joint checks to the subcontractor and its suppliers on a project. These arrangements are usually governed by a separate agreement that sets forth the roles and rights of the parties, and limits the general contractor's liability to sub-subcontractors and ...
Continue reading
  1006 Hits
  0 Comments
1006 Hits
0 Comments

Home Sales Drop

As expected, the sales of existing homes dropped and there has been a significant decline in sales since the record set at the start of the year. Back then, all the factors that tend to drive the housing market were in place. There were low mortgage rates and the majority of the population was feeling pretty good about their employment situation. I...
Continue reading
  947 Hits
  0 Comments
947 Hits
0 Comments

Housing Numbers Down

There will be some new housing numbers released this week as well. They are expected to be down again. The homebuyer is still not feeling all that confident about their job prospects. Even low mortgage rates have not been enticing enough. The high-end homes are starting to get some attention again as the markets have bounced back to a degree. That ...
Continue reading
  921 Hits
  0 Comments
921 Hits
0 Comments

Material Suppliers Experience ‘Heightened Economic Uncertainty’

Everyone has felt the wrath of the pandemic, especially small businesses. The U.S. government started the Paycheck Protection Program (PPP) in April to help businesses keep their employees onboard, according to PBS, only to see the $349 billion in loans fade to nothing in less than two weeks. An additional $175 billion was funneled into the program...
Continue reading
  845 Hits
  0 Comments
845 Hits
0 Comments

New Home Starts

The housing market is essentially in free fall at the moment and that is not likely to reverse in the immediate future. Even those who assert that a recovery might develop by the third or fourth quarter of this year are convinced that the housing market will lag that recovery and perhaps for months. There are multiple issues here. The most importan...
Continue reading
  948 Hits
  0 Comments
948 Hits
0 Comments

ABC Economist Suggests Construction Industry Focus on ‘Broader Trends’ Due to ‘Erratic’ Input Prices

Construction input prices have yet to establish a trend over the past few months, despite a slight increase in May. Although prices rose 0.8% last month, Associated Builders and Contractors (ABC) Chief Economist Anirban Basu said U.S. construction firms should focus their attention to "broader trends" given the current economic climate.According to...
Continue reading
  731 Hits
  0 Comments
731 Hits
0 Comments

Construction Sees Largest Monthly Job Increase in More Than 80 Years

The construction industry featured its latest accomplishment in May, adding 464,000 net new jobs—the largest monthly increase in more than 80 years, according to Associated Builders and Contractors (ABC). Although there were fewer jobs in May compared to the prior year, nonresidential construction employment added 237,000 net new jobs last month af...
Continue reading
  813 Hits
  0 Comments
813 Hits
0 Comments

April Construction Spending Slips; Better than Expected

Construction spending is still being impacted by COVID-19; however, outlays fell slightly lower than expected in April. Despite the better-than-expected fall, April's 2.9% drop was the worst since October 2018, according to Reuters. However, spending in April was 3% higher than April 2019, according to a release from the Census Bureau.Construction ...
Continue reading
  931 Hits
  0 Comments
931 Hits
0 Comments

Do Not Sign That Lien Waiver

Every month, contractors, subcontractors and suppliers submit applications for payment upstream along with a form they are contractually required to execute: a release and waiver of claims or liens, commonly called a "lien waiver." The language in these lien waivers is intended to identify how much the contractor has been paid and release any claim...
Continue reading
  976 Hits
  0 Comments
976 Hits
0 Comments

Pending Home Sales Plummet in April

Pending home sales is the latest sector to see record drops from the impacts of COVID-19. The Pending Home Sales Index from the National Association of Realtors (NAR) declined 21.8% in April. All regions saw a month-to-month and year-over-year decline in pending home sales."With nearly all states under stay-at-home orders in April, it is no surpris...
Continue reading
  927 Hits
  0 Comments
927 Hits
0 Comments

Working Through COVID-19 in Construction

There is always some sort of risk for credit professionals when a credit application comes in or the salesperson knocks on the door with a new customer. The risk of nonpayment for goods and services rendered is always at the back of a creditor's mind no matter how nice and clean a transaction looks on paper. Even cash in advance can get tricky if t...
Continue reading
  915 Hits
  0 Comments
915 Hits
0 Comments

Material Suppliers Adapt to Accommodate Canceled, Delayed Projects

It has been more than three months since COVID-19 appeared in the U.S., and the challenges are never-ending. Many schools are transitioning to online learning, thousands of businesses remain closed, and a lot of the workforce is working from home. Some sectors, such as construction, operate in a gray area as projects are either moving forward, post...
Continue reading
  827 Hits
  0 Comments
827 Hits
0 Comments

Mississippi Deadlines for Mechanic’s Liens and Construction Liens

For contractors and subcontractors, late payments can be an all-too-familiar part of the construction industry. Many assume the best of intentions—maybe the check is still in the mail? Maybe there was an emergency around-the-clock project? When it eventually becomes clear there is a problem, many will still try to work it out themselves. But all th...
Continue reading
  859 Hits
  0 Comments
859 Hits
0 Comments

Risk Mitigation in Supply Chain Contracts: Termination, Credit and Insurance Terms

As business shutdowns related to the COVID-19 crisis continue to wreak havoc on supply chains across the globe, companies responding to supply chain disruptions will find that their obligations, rights and remedies largely depend on specific language in their contracts. A carefully crafted (or renegotiated) contract and an appropriate, timely respo...
Continue reading
  819 Hits
  0 Comments
819 Hits
0 Comments

New Home Sales Rise Slightly Showing ‘Potential Recovery’

Although existing home sales declined last month, new home sales held their ground in April with more than a half-percent rise. National Association of Home Builders (NAHB) reported the increase brought the seasonally adjusted annual rate to 623,000 units.NAHB Chairman Dean Mon said in the report that the new home sales results "show the potential ...
Continue reading
  881 Hits
  0 Comments
881 Hits
0 Comments

Reviewing Construction Contracts in the Time of COVID-19

As several industries adjust to their altered operations due to COVID-19, some are looking ahead to assess their options financially, specifically how to keep business afloat until work ramps up again. Almost everything with a schedule is either delayed or canceled altogether, including movie theater releases, sports events and even construction pr...
Continue reading
  815 Hits
  0 Comments
815 Hits
0 Comments

Joint Check Agreement Basics

COVID-19 has turned the world upside down in more ways than one, leaving different parties stuck and hung out to dry through no fault of their own. This black swan has crippled many businesses and individuals, with still many outcomes left to be known. While some larger companies such as Under Armour, Nike and Adidas have come out and said they wil...
Continue reading
  919 Hits
  0 Comments
919 Hits
0 Comments

The COVID-19 Potential Impact on Contract Surety

The COVID-19 pandemic raises a series of unknowns for contractors, owners, subcontractors, suppliers and sureties. Much is being written about whether construction is deemed an essential infrastructure exception to governors' various executive stay-at-home orders. Surety practitioners are facing novel legal issues raised by the pandemic as they ana...
Continue reading
  974 Hits
  0 Comments
974 Hits
0 Comments

Decrease in April Construction Input Prices Spells Good News for Industry

A bit of good news made its way to the construction sector last week when Associated Builders and Contractors (ABC) reported a dip in construction input prices in April. Overall prices declined nearly 4.5% last month, the majority of the decline seen in nonresidential construction input prices at 4.2%. ABC Chief Economist Anirban Basu said inflatio...
Continue reading
  812 Hits
  0 Comments
812 Hits
0 Comments

The Impact of COVID-19 on Payments and Order Cancellations for Suppliers and Distributors

At the present time, many suppliers and distributors are looking at the impact of COVID-19 on their businesses and thinking—hard.Thoughts are likely to be at three levels.1. Goods supplied for which payment has not been receivedFirst, in terms of goods supplied, it may be that payment has not yet been made. If the distributor becomes insolvent, it ...
Continue reading
  853 Hits
  0 Comments
853 Hits
0 Comments