ConstructionPro Week, Volume: 5 - Issue: 23 - 06/10/2016

Limitations on Owner Rep Authority

By Bruce Jervis

 

Project owners generally have a designated representative or agent looking out for their interests at the job site. The individual may be an employee of the owner or an outside professional. The titles vary, but the roles are similar. The owner’s rep monitors compliance with the contract requirements, handles administrative aspects of the contract and determines the validity of contractor payment applications.

 

Owner’s representatives wield a lot of authority. There are limits, however, on the extent of their discretion. While they can interpret and apply the contract documents, they cannot alter the terms of the agreement between the project owner and the construction contractor.

 

In a recent Texas case, the construction contract did not call for retaining funds from contractor progress payments. Nevertheless, the project architect certified only 90% of the contractor’s applications for payment. The architect had no authority to alter the terms of the contract and the owner could not rely on the certifications, or industry custom, to justify the retainage.

 

Have you seen instances in which owner’s representatives overstepped their bounds and took positions inconsistent with the terms of the construction contract? Your comments are welcomed.

 

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