Canadian Lawyer InHouse

August/September 2020

Legal news and trends for Canadian in-house counsel and c-suite executives

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Page 31 of 43

30 FEATURE AS THE COVID-19 crisis has rocked the world and devastated the economy this year, the commercial property industry has been plagued by construction delays, contract amendments and a broad slowdown in transaction activity. All construction projects were suspended in Quebec as a result of the health crisis, while all but essential projects were suspended in Ontario until May. Those that have re-started are progressing more slowly and incurring greater expense due to social-distancing requirements on construction sites. "From a lawyer's perspective, there has been a flurry of activity in considering the application of force majeure clauses, which is a very contract-dependent analysis," says David Longcroft, a partner at Borden Ladner Gervais LLP. "Even if there is a force majeure Lawyers brace for surety claims and insolvencies following commercial construction delays clause, it's not a get-out-of-jail-free card. Everybody is hurting as a result of the delay, so there is going to be a knock-on effect. We're already seeing delay claims increasing, which is a strong signal of significant disputes to be resolved, so there is going to be a lot of that activity over the next few years." Longcroft anticipates an uptick in insol- vency proceedings from lenders in the construction world, in addition to an increase in surety claims, when project security is called upon to complete the work of defaulting contractors and to pay sub-trades. Ultimately, he expects to see a continued slowdown in the commercial construction sector. QuadReal Property Group's ongoing construction projects have not been nega- tively impacted by the pandemic, but safety procedures have been ramped up on sites to Landlords and tenants navigate issues arising from business shutdowns during the COVID-19 pandemic protect workers. Taking care of employees is a key concern for Vancouver-based QuadReal, so the legal team has fielded questions related to measures supporting front-line employees working in buildings. "A lot of employees are working much harder at this time, so we need to make sure they have the resources and rest they need and they continue to be supported," says Roger Chouinard, chief legal officer and corporate secretary at QuadReal. "That's something we have been working on with the HR team and managers across the organization." RioCan REIT was also fortunate to be permitted to keep most construction projects operating during the lockdown. "All of them are now fully ramped back up, but, obviously, there are different safety protocols and enhanced measures on that front," says Jennifer Suess, senior vice president, general counsel and corporate secretary at RioCan. "We'll have to see how it plays out in the next months and years in terms of pricing, but, for the time being, everything is moving as it should be." The legal team at RioCan has boosted engagement levels with the organization during the pandemic, scheduling daily check-ins with all business units to ensure they are aligned in terms of strategy. Many tenants in the retail sector are "We're already seeing delay claims increasing, which is a strong signal of significant disputes to be resolved, so there is going to be a lot of that activity over the next few years." David Longcroft, Borden Ladner Gervais LLP

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