Coronavirus & Construction Cash Flow

Amidst uncertainty, contractors and suppliers need to understand their payment rights, and the key steps they can take now to protect their financial health.
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Coronavirus in Construction

How construction businesses can survive coronavirus impact

Construction industry experts are predicting huge impacts on the construction economy, from delayed material supplies to legal disputes over non-payment. Contractors and suppliers can take simple, concrete steps now to give themselves the best chance to survive the COVID-19 outbreak.

Is construction an essential business?

As states and cities declare stay-at-home and shelter-in-place orders, many “non-essential” businesses are being forced to close. While the Department of Homeland Security (DHS) has issued guidelines for critical industries during a national emergency, states are generally free to define “essential” as they see fit. In some states, construction is specifically mentioned as an essential business, while others are more vague with their directives.

Look at your contract: Force majeure & delay clauses

Some cities are already shutting down construction projects in response to coronavirus concerns. For projects already in progress, contractors and suppliers should look at their contract’s delay provisions and force majeure clauses – to determine their next steps. In addition to that, be sure to look out for any “no damages for delay clauses” as well.

Prepare for supply chain disruptions

With border shutdowns and restrictions on travel and transport, construction companies need to prepare for some disruptions to supply chains. To anticipate these delays and increased costs, companies need to start planning ahead to identify alternative building material sources, and adjust their project schedules and contracts accordingly.

Coronavirus & business interruption insurance

Construction companies need to begin preparing for the inevitable financial losses associated with loss of income. To protect their company from these coronavirus-related losses, one consideration should be to seek out coverage under a business interruption insurance policy.

Cash flow options

While construction projects are delayed or cancelled, contractors and suppliers still have bills to pay and expenses to meet. They would do well to assess their financial situation and cash flow needs now, and determine what additional infusions they may need to ride out the downturn. Construction businesses that anticipate needing extra cash have a number of viable options, including US Small Business Administration (SBA) Disaster Relief Loans, a line of credit, bank loans, invoice factoring, and more.

File a mechanics lien to get paid

As cash and credit lines dry up, the coronavirus outbreak may make it more difficult for contractors and suppliers to get paid. But in this unprecedented situation, you may not have time to follow the normal mechanics lien process. The most important thing you can do is act now to protect your lien rights.

Lien rights & field hospital construction

To increase patient capacity, some cities are hiring contractors to build mobile field hospitals. While highly important work, building temporary structures can be a financial risk. Most states don’t give construction companies lien rights for work on these types of projects.

County office closures: How to record mechanics liens & other documents remotely

Every day, more county offices across the US are closing. However, construction businesses still need to record important construction documents to secure their right to payment. Such as notices, mechanics liens, and more. In most cases, contractors and suppliers have options to record a lien or notice remotely.

Coronavirus in Construction: Videos & Webinars

Video content about the effect of coronavirus on construction businesses, and what they can do to prepare.

County Recorder & Clerk Office Closures

With the unpredictable nature of current events, there may be some confusion as to whether or not recording offices around the country are still accepting documents for recording.

While we cannot guarantee that this page will contain every closure or delay, we are working diligently to update information as we receive it. If you have any specific questions, please contact the county directly so they can provide you with the most current information on their status.


Find Your County Recorder / Clerk Contact Information


The county offices listed below have announced closures or service limitations: View your options for recording a mechanics lien and other documents remotely.

Alabama

  • Jefferson County
  • Madison County
  • Marshall County

California

  • Alameda County
  • Contra Costa County
  • Kern County
  • Los Angeles County
  • Marin County
  • Orange County
  • Riverside County 
  • San Bernardino County
  • San Francisco County
  • San Mateo County
  • Santa Clara County

Colorado

  • Delta County
  • Eagle County
  • Douglas County
  • Fremont County
  • Summit County
  • Weld County

Florida 

  • Duval County

Georgia

  • Clayton County
  • Fulton County

Illinois

  • Cook County
  • Kane County

Indiana

  • DeKalb County

Maryland

  • All Maryland Counties

Massachusetts

  • Nantucket County
  • Norfolk County

Minnesota

  • Hennepin County

Michigan

  • Calhoun County
  • Kent County
  • Muskegon County
  • Wayne County (Detroit)
  • Washtenaw County

New Jersey

  • Bergen County
  • Burlington County
  • Essex County
  • Morris County
  • Monmouth County
  • Union County

New York

  • Montgomery County
  • Rockland County
  • Steuben County
  • Suffolk County
  • New York County
  • Kings County
  • Queens County
  • Bronx County
  • Richland County

Nevada

  • Nye County

Ohio

  • Cuyahoga County

Oregon

  • Grant County

North Carolina

  • Pamlico County

Pennsylvania 

  • Adams County
  • Philadelphia County
  • Delaware County
  • Lancaster County
  • Leheigh County 
  • Luzerne County
  • Montgomery County

Texas 

  • Denton County
  • Travis County

Virginia

  • City of Richmond
  • Chesterfield
  • Goochland
  • Hanover
  • Henrico
  • Spotsylvania County

Washington

  • Clark County
  • King County, WA (Seattle)
  • Pierce County
  • Snohomish County

Utah

  • Beaver County

Frequently Asked Questions About Coronavirus & Cash Flow

Answers to common questions about the coronavirus, how it affects a contractor's cash flow, and what construction businesses can do about it.

How is the coronavirus impacting construction?

Though the ultimate impact of the coronavirus is still yet to be seen, there are a few effects that construction industry experts are predicting; some of which are already developing:

  • Disruptions in supply chains
  • Project delays
  • Labor shortages
  • Economic slowdown or recession
  • Project cancellations
  • Legal disputes over payment

Learn more in The Contractor's Guide to Surviving Coronavirus

What can contractors do to reduce payment delays or prevent non-payment during a pandemic?

The way for construction businesses to protect themselves is to be proactive in reducing or eliminating payment problems during the coronavirus outbreak. These steps are generally the same that are recommended on every project; which include:

Can I still file a mechanics lien or notice if the county office is closed?

Generally, yes. Many recorder’s offices provide the ability to file documents remotely. However, you should continue to monitor the status of your county recorder’s office. Coronavirus closures may affect the office’s normal capabilities or procedures.

Will a delay caused by coronavirus cause me to default on my contract?

The answer to this question will ultimately be determined by the terms of the contract itself. Generally, most construction contracts contain delay provisions and force majeure clauses. These will determine what types of delays are permissible, if compensation is available, and if the delay constitutes a breach of contract.

In addition to the contract terms, there may be other defenses to non-performance that should be considered, such as impossibility or impracticability of performance.

What can I do if a customer cancels my contract over coronavirus?

The options available will generally depend on the language in your contract. Most construction contracts contain a termination clause that spells out the scenarios, notice requirements, and procedures necessary to terminate the contract.

Learn more:

Questions? Get Answers from Construction Lawyers

Ask an Expert for Free

Do you have questions about how to protect your payments and cash flow during the coronavirus epidemic? Get answers from construction lawyers across the country.

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Coronavirus Information & Support

Information and resources to help contractors understand the coronavirus (COVID-19), protect their health, and take advantage of resources available.

  • US Center for Disease Control (CDC)
  • US Small Business Administration (SBA)
  • US Department of Labor

Coronavirus Resources & Information from The Center for Disease Control (CDC)

Learn more from the CDC

The US Small Business Administration offers long-term disaster relief loans to businesses in select areas.

Learn more about the SBA loan program

Information on workplace safety, wages & leave, unemployment insurance, and more.

Learn more from the Department of Labor

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SBA Small Business Administration Logo
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