ConstructionPro Week, Volume: 3 - Issue: 32 - 08/08/2014

An Alarming Expansion of Architect Liability?

By Bruce Jervis

 

Design professionals have long sought to control their liability exposure. The argument has been that their potential liability is disproportionate to the compensation they receive and the role they play on a construction project. They have received a sympathetic hearing in some quarters. In particular, the engineering disciplines have gained increasing acceptance of contractual limitations of liability. However, a recent ruling in California will have to be viewed as a setback.

 

The California Supreme Court ruled that an architect can be held liable to future homeowners, with whom it had no contract, for the negligent design of residential property. The ruling applies to architects who provide comprehensive design services directly to developers. The court reasoned that future homeowners are necessarily reliant on those architects. The court distinguished a case in which a geotechnical engineer furnished services to a site preparation subcontractor. The third-party commercial property owner was in a position to obtain independent technical input.

 

The architects argued that this potential downstream obligation to third parties who were strangers to the original project would create long-lasting liability exposure of unknown dimensions. The court brushed off this argument, saying the liability comes with the territory in an era where homes are mass produced and essentially sold as consumer items.

 

To keep this ruling in perspective, it applies only to residential development in California. And, it applies only to “principal architects” who provide comprehensive design services to residential developers. But, the ruling is unsettling, particularly the court’s cavalier lack of concern for contingent downstream liability exposure. This is a cost that cannot be controlled effectively through contract, as it arises from a duty of care owed to prospective individuals who are strangers to the project. What is your opinion? I welcome your comments.

 

COMMENTS

The Architect's contract w/ the developer should contain a clause whereby the Developer agrees to cover 3rd party claims for 10 years or some reasonable amount of time. This is easier said than done as most developers shed liability to other parties.I know I was in development for 10 years and now practice Architecture. We don't do any residential and no developer work. As an Architect, I wouldn't want to work for me as a developer.
Posted by: Dennis A. Ros - Friday, August 08, 2014 10:30 AM


This is very disturbing as it definitely will be expanded to apply to all Architectural work ever done for anyone. But this is expected of CA as they have a very anti-small business attitude.
Posted by: Lawrence Lee Huber, AIA, NCARB - Friday, August 08, 2014 10:33 AM


The State of Ohio finally a few years ago adopted a statute of limitations for architects and engineers of 10 years after substantial completion. prior to this we were subject to a lifetime responsibility. I believe Architects and engineers should have the same liability limit as the contractor or developer. As far as being responsible to the second or third buyer or owner, let the buyer be ware. they have a choice in buying a property in as is condition as stated in most realestate purchase agreements. thanks for listening.
Posted by: Lawrence L. Hersey, RA - Friday, August 08, 2014 11:00 AM


I'll take a little different view on this. I'm a contractor whose primary business is going behind builders and developers years after they have completed a project and it is out of warranty and correcting construction flaws that have resulted in structural damage, primarily through moisture-intrusion. In many cases, the issues are the result of the builders cutting corners in order to reduce costs. However, there are also times when the builder was working according to a set of architectural plans and followed those plans to the letter, but there was a flaw in the design of the home that increased it's vulnerability to moisture-intrusion. Most of the time it's something like the omission of a flashing detail. In these instances I don't think that it's fair for the builder or the homeowner to be responsible for paying me to repair the damage that resulted from the design flaw. In my humble opinion there should be three general ways to trigger liability in this situation. 1. If the flaw is in the design then the architect should be responsible for the damage. 2. If the builder didn't follow the design as set forth by the architect then the builder should be liable. And 3. if the architect did not have any flaws in their design, the builder followed the architect's design properly, but the homeowner neglected to maintain the home (ie cleaning gutters, replacing rotted wood trim, etc.) then the homeowner should be responsible.
Posted by: Armond Davis - Friday, August 08, 2014 11:10 AM


I live in Tampa Florida and the General Contractor poured a 10 foot concrete beam on the 2nd floor landing to replace a rotted wooden one, without a permit or drawings,leaving the floor open. The Building Dept ordered it to be engineered and inspected. A licensed architect wrote a letter stating it should be fine, including a drawing of 'as built' which did not reflect what was poured, as they simply pushed short pieces of rebar into concrete as it set, after questioned by homeowner. (me). The Building Department states that they have no jurisdiction over architects and engineer. Am I to wait until failure for any recourse? And if so, who is liable?
Posted by: TerreTulsiak - Friday, August 08, 2014 11:12 AM


We are told by our insurance carriers that our liability should be limited to the standard of care that any another professional would have rendered for a project of the type in which we were engaged. I agree that there should be some time frame beyond which the architect or engineer is held harmless, otherwise we are on the hook endlessly which seems hardly fair or practicable for that matter.


Posted by: Lloyd Goldrick - Friday, August 08, 2014 12:35 PM


 









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