“Vaccinating” Your Construction Business: An Ounce of Prevention is Worth a Pound of Cure

On April 3, Florida Governor Ron DeSantis issued Executive Order 20-91, the Safer At Home Order, restricting all “movements and personal interactions outside of [the] home to only those necessary to obtain or provide essential services or conduct essential activities” through April 30. 

The effects may be far-reaching for Florida’s construction industry.  In 2018, Florida’s real estate industry accounted for $227.3 billion or 21.9% of Florida’s gross state product, with more than half coming from new home construction.  Protracted local lockdown of planning and permitting could cause substantial damage to Florida’s economy, particularly if it occurs in densely populated areas.

Defining Essential Services:

Section 2 of Order 20-91 defines “essential services” based the U.S. Department of Homeland Security’s (“DHS”) “Guidance on the Essential Critical Infrastructure Workforce,” v.2 (March 28, 2020) as well as those listed by Miami-Dade County in multiple local orders.  Governor DeSantis refers to websites of Florida’s Division of Emergency Management and Department for the most recent list of essential services exempted from the order.  

DHS considers the following as essential critical infrastructure workforce regarding construction-related services:

• Residential/Shelter Facilities and Services: “Workers performing housing construction related activities to ensure additional units can be made available to combat the nation’s existing housing supply shortage” and “[w]orkers supporting the construction of housing, including those supporting government functions related to the building and development process, such as inspections, permitting and plan review services that can be modified to protect the public health, but fundamentally should continue and serve the construction of housing (e.g., allow qualified private third-party inspections in case of government shutdown); and
• Commercial Facilities: “Workers who support the supply chain of building materials from production through application/installation […]”

The Safer at Home Order includes as essential those services defined in Miami-Dade’s Emergency Order 07-20.  In the local order, Miami-Dade County exempts “contractors and other tradesmen, […] who provide services that are necessary to maintaining the safety, sanitation, and essential operation of residences and other structures,” as well as “open construction sites, irrespective of the type of building,” and “architectural, engineering, or land surveying services.”

The statewide order supersedes any conflicting orders of local officials, and those entities may not relax the restrictions.  However, local governments are free to restrict “essential activities” further based on local conditions.  

However, even “essential services” can be prohibited if they involve known exposure to the virus.  Building Department functions for unincorporated Miami-Dade County are one example.  On March 19, that Building Department was temporarily shut down because an employee tested positive for COVID-19.  Without a Chief Building Official, or her designee, reviewing plans and issuing permits, nascent projects cannot be pushed forward into active construction.  When projects stall, the economic impact ripples through many sectors of the economy, including lending, development, design, contracting, manufacturing, distribution, supply, and government agencies that rely on fees and taxes.  Fortunately, Florida law provides at least two potential solutions – private providers and government outsourcing.  Each is discussed briefly below.

Building Departments Plan Review & Inspection Functions: Plan review and inspection services may be provided by Florida-registered architects and engineers, in lieu of building officials.  Private providers may then step in to process permits and inspections, in accordance with Florida Statute 553.791 “Alternative Plans Review and Inspections.”  In construction hot-spots, the practice is more common, allowing developers to move projects forward by avoiding backlogged local building departments.  This same process is available to transition a project that has stalled in government plan review and permitting.

Government Outsourcing: Primarily under the authority of the Municipal Home Rules Power Act (“MHRPA”), codified in Chapter 166 of the Florida Statutes, some local governments have taken to outsourcing building department functions, including plan review, permitting, and inspection services.  For local governments that have pre-existing professional service contracts with design professional firms that include performance of building department functions, those firms are de facto building departments.  To keep current projects active and new ones moving towards permitting, local governments may consider engaging firms to bridge the gap.  

In either scenario, the building official maintains police power to shut down a construction site that presents a heightened risk for spreading COVID-19.  Those officials must first determine COVID-19 is “a condition on the building site” that “constitutes an immediate threat to public safety and welfare” before they can issue a stop-work order, per Florida Statute 553.791 (15)(c).  Thus, a stop-work order is possible but unlikely so long as there are no infected people on the building site.  Following CDC guidelines on COVID-19 prevention will help protect one’s project from a stop-work order. With scientists, government, and health providers concerned about rebounding virus in the Fall, planning ahead is key to a successful project.  These alternatives may well provide the antidote to a collapsing construction economy in Florida.

If you have any questions about essential services, building departments plan review and inspection functions, or government outsourcing generally, please contact Dean Meyers at dean.meyers@csklegal.com or 954-343-3912 or contact Kéran Billaud at keran.billaud@csklegal.com or 954-343-3906.