CREJ

Page 22 — Property Management Quarterly — April 2020 www.crej.com Management a preparedness checklist, update March 4, that shares several guidelines: • Communicate with tenants and staff. This includes establishing a process to share information with staff and ten- ants and staying engaged with state and local health departments to keep a pulse on what’s happening within your community. • Prepare your tenants and staff on following proper sick policies. Addi- tionally, managers should connect with third-party vendors to make sure they have similar guidance for their employees. • Plan for business continuity. Manag- ers should identify essential business functions to maintain operations, and make plans to deal with increased staff absentees and supply chain interruptions. Other suggestions include cross-training personnel to perform essential functions; consider flexible work sites or hours to increase physical distance between employees; ensure IT infrastructure is ready to handle people working from home; and encouraged local managers to take appropriate actions if a portfolio contains properties in more than one market. The BOMA International guidelines also provide best practices for cleaning during an outbreak as well as supplies to keep on hand – think tissues, soap, alcohol-based hand sanitizer, disposable wipes, no-touch disposal receptacles and routine cleaning products. Another association offering guide- lines for managers is the Apartment Association of Metro Denver, which issued a release March 13. “It’s important to remember that every apartment management company will handle this situation differently depend- ing on what’s best for their communi- ties, but that their top priority is the health and well-being of their residents and employees,” said MarkWilliams, executive vice president, AAMD. In addition to following CDC and CDPH guidelines, the association recom- mends ensuring everyone wash their hands before using building amenities and after using building amenities, particularly fitness centers. Managers should inform tenants to not use fitness centers and other amenities if they have fever, nausea, runny nose, chest conges- tion or the chills. Managers are encour- aged to tell those tenants to “Please get some rest and spare fellow residents the likelihood of also getting sick,” the release said. AAMD also recommends switching to online rent payment. The association canceled, postponed or converted to video conference all meetings for the next eight weeks fol- lowing national recommendations. Many other state associations and com- mercial real estate companies did the same. NAIOP Colorado has converted its operations into a virtual basis and postponed all events through the end of April. Additionally, Polis mentioned he will be releasing an executive order to pro- tect against residential and commerical foreclosures, provide flexibility on loans and waive late fees and evictions, which we’re montinoring closely. Construc- tion projects also may be paused or postponed in light of the evolving situ- ation, especially due to potential supply chain delays. Subcontractor manpower already is down 10 to 15% as employees stay home and building departments have shut down their front offices, said Jim Boots, president and CEO of Boots Construction. At the moment, most of the building departments still are reviewing plans remotely and con- ducting on-site inspections with some special procedures to ensure social distancing. “If they shut down inspec- tions, this would cause construction to slowly grind to a halt,” he said. “This is a day-by-day situation of which safety is everyone’s concern and we need to make decisions in this regard daily.” For retailer not already shut down, many are changing their hours. Mall real estate investment trusts are down, according toThe Real Deal. Simon announced it was closing all of its malls until the end of March, including three in the metro area.The travel industry, especially hotels, will continue to bear the brunt of the immediate reaction, but investors seems optimistic it won’t be too long lasting. As anxiety builds, no matter the prop- erty type, clear communication, trans- parency and established plans can help fight these fears. As asset managers, it’s an important time to be a leader for your staff as well as your tenants. s Continued from Page 1 4. What are parties’ rights under the AIA owner-contractor agreements in the event of a pandemic? A pandemic could dramatically affect the construction labor force and delay the delivery of materials – all of which could cause significant delays to the completion of projects. But who bears the risk of these delays under the widely used AIA con- tract documents? The contractor’s right to make a claim for delays and extensions of time is governed primarily by Section 8.3.1 of the AIA A201-2017 general conditions. As it is written in the standard form, that provision provides five grounds on which the contractor can make a delay claim. At least two of these grounds – “unusual delay in deliveries” and “other causes that … justify delay” – arguably give the contractor a basis for seek- ing an extension of time under the contract in the event of a pandemic. Indeed, Section 8.3.1 usually entitles the contractor to a time extension as a result of any delay that the parties couldn’t have anticipated when they entered into the contract. By contrast, the owner has a right under the AIA agreements to suspend or terminate the contractor for con- venience and without cause. In some cases, it may become attractive, or even necessary, for the owner to exer- cise its rights of suspension and/or termination to control the costs of the project. s Pray Continued from Page 6