Remembering the Notice of Non-Responsibility

 For so long, a hot economy and commercial leasing market meant that concerns over unpaid tenant improvement construction and related mechanic's liens were closeted like winter clothes in the heat of the summer. In the current "pandemiconomy," many commercial businesses are planning their return to the office. Some tenants need to complete bui...
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Joint Check Agreements: No Two Are Alike

Nothing is ever carved in stone, so business credit professionals should always sleep with one eye open when expecting payments on construction projects. Finding a way to become more secure is always in the best interest for creditors, even if it only slightly improves the odds of being paid and being paid on time. Each security mechanism works a l...
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Material Suppliers Best Prepare for Additional Costs During Construction Projects

If the first half of 2020 has proven anything, it is that the pandemic will leave a lasting impact on how society goes about day-to-day living. Many are working from home, stores are cleaning checkout counters after every customer, and masks are a common wardrobe choice. Several companies are adapting their operations within their existing structur...
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Notice Your Lien or Kiss it Goodbye in Minnesota

Like many states, Minnesota requires subcontractors and suppliers to send pre-lien notices to owners to perfect mechanic's lien rights. Failure to comply with the pre-lien notice statute can prove fatal to a lien enforcement action as one masonry supplier recently learned. In Timberwall Land & Masonry Products, Inc., the Minnesota Court of Appe...
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Construction Impacted by Coronavirus? Know Your Lien Rights in Colorado

The current coronavirus crisis has created unprecedented challenges for those in the construction industry. As a result, contractors, subcontractors, and suppliers must be vigilant to protect their ability to receive payment on projects where cash flow might become problematic. One such way to ensure payment is by availing oneself of the various st...
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New Home Sales Exceed Projections in May

New single-family home sales in the U.S. are on the rise. According to the Census Bureau and Department of Housing and Urban Development, sales increased 16.6% in May to a seasonally adjusted annual rate of 676,000. This is better than expected as MarketWatch reported analysts predicted a rate of 650,000, and Reuters' economists forecasted sales wo...
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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 ...
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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...
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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 ...
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Housing Starts See Modest Rebound in May

U.S. housing starts have started to rebound; however, they are still well below the data from a year ago. Housing starts increased 4.3% in May, according to this week's announcement from the Census Bureau and Department of Housing and Urban Development. Yet, this is 23.2% below May 2019. Housing starts were at a seasonally adjusted rate of 974,000 ...
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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...
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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...
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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...
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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...
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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 ...
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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...
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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...
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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...
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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...
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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...
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