Practice Management Member Conversations

  • 1.  Architect's Certification from Private Lenders/Underwriters

    Posted 09-11-2013 01:47 PM
    Working in affordable housing, we are often asked by HUD or other government entities to sign an architect's certification that our documents are in compliance with UFAS, ADA, building codes, etc., the language of which is usually rather standardized and not too objectionable.

    However, we have been noticing a trend recently, over the past few years, where private lenders and underwriters are asking for a similar certification.  The language used is often not standard and can be quite onerous for the architect.  Has anyone else been experiencing a similar trend?  Does the AIA have any mechanism to minimize this practice or at least standardize the language?

    Any feedback would be appreciated.

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    Thomas McManus, AIA
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    LGBTQIA+ in Architecture Symposium at AIA24. June 8, Washington, DC. Click here to learn more.


  • 2.  RE:Architect's Certification from Private Lenders/Underwriters

    Posted 09-12-2013 05:31 PM
    The answer [to you] is "Yes," and [to lenders & underwriters] is "Emphatically No." Consult your insurance provider about uninsurable risks represented in these gun-to-head certifications, and respond accordingly. 

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    Bruce Bradsby
    bdb/a
    San Francisco   |   Bangkok

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    <snip>...where private lenders and underwriters are asking for a similar certification.  The language used is often not standard and can be quite onerous for the architect.  Has anyone else been experiencing a similar trend?  Does the AIA have any mechanism to minimize this practice or at least standardize the language?

    Any feedback would be appreciated.

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    Thomas McManus, AIA
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  • 3.  RE:Architect's Certification from Private Lenders/Underwriters

    Posted 09-12-2013 05:47 PM
    Thomas

    We routinely receive these certification requests from lenders on most of the private side projects. They are simply doing their due diligence in validating the quality of the project documents for their underwriters file. Most lenders say you cannot revise them. I have revised every single one of them and they accept them. I have only had one lender 'negotiate' with me on the language within the past 5 years. This is necessary to assist our clients obtain financing without putting an undue burden on the Architect.

    Lenders often do not understand the nature of what we do nor the consequences of what they ask of Architects with these certifications. First of all I never "certify" anything. I change the wording to 'acknowledge' and add words like 'reasonable' requests by the regulatory agencies and 'to the best of our knowledge' to diminish the certainty of the language usually presented. With these adjustments I find that the lenders are satisfied and our clients understand.

    I once had a lender ask that we Certify that the Contractor was able to meet the schedule on a very large project. Clearly I could not Certify that they could show up on Monday much less meet the demands of a 24 month schedule. I dismissed this and we were able to get the project financed.

    I believe our profession needs to learn to negotiate more strongly with all our partners. Hope this helps.
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    Ernest Ulibarri AIA
    Project Director
    Davis Carter Scott Ltd
    Mclean VA
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    LGBTQIA+ in Architecture Symposium at AIA24. June 8, Washington, DC. Click here to learn more.


  • 4.  RE:Architect's Certification from Private Lenders/Underwriters

    Posted 09-12-2013 06:38 PM
    My experience has been similar to Ernest's.  Everybody is asking for the architect to sign a certification form these days, including private lenders.  I have always changed the language and so far received no resistance from a bank or local government.  HUD is actually worse, as they have a form for everything and it has to be filled out exactly as HUD dictates.  I would support having some guidelines on recommended language, similar to the examples Ernest lists, but am not sure if standardization is a good idea.  Each project has a different set of criteria the lender deems critical (accessibility, sustainable features, etc), so having a standard form would not be that helpful.

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    Yumiko Ishida AIA
    Vice President
    Acanthus Architecture & Planning, PC
    Phoenix AZ
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    LGBTQIA+ in Architecture Symposium at AIA24. June 8, Washington, DC. Click here to learn more.


  • 5.  RE:Architect's Certification from Private Lenders/Underwriters

    Posted 09-12-2013 07:01 PM
    Hi Thomas
    I've noticed the same trend.  In fact we have now on multifamily projects 'experts' who are looking over our shoulder on behalf of the banks; in one case an architect, in other cases individuals who do not appear to have any particular credentials.  

    I modify the forms provided often; if they come as pdf, I convert them to editable docs.  I always add language that representations are to 'the best of my knowledge and belief' and that standards are 'as enforced by local authorities having jurisdiction' as there are potentials for conflicting requirements and judgements made by field inspectors over which I have no knowledge and certainly no control.  In CA with our 'certified access specialist' CASP position regulated by the state, I try to get the owner to retain their OWN consultant to review and provide reports at the completion of construction; but of course many balk at the expense.  In California, a CASP is authorized by the state to issue a 'certificate' that is intended to be displayed in the window of a building - so as to reduce exposure to 'drive by' accessibility litigation.  Only CASP's can issue these placards, and that in my view is reason enough to have one on the job.


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    Michael Malinowski AIA
    AIA Director - California Region
    Applied Architecture, Inc.
    Sacramento CA
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    LGBTQIA+ in Architecture Symposium at AIA24. June 8, Washington, DC. Click here to learn more.


  • 6.  RE:Architect's Certification from Private Lenders/Underwriters

    Posted 09-13-2013 09:58 AM
    Been ther done that and have several torn and tattered tee-shirts!!

    My best advice - surround the issue by making provision for it in your contracts (most of these things come up long sfter the O-A agreement is signed!); never use third party language verbatim; always discuss with your legal counsel and liability carrier the issue and language of your response; and remember "to the best of my knowledge, information and belief" should be a preamble to any such "certification" and those words should also be in the contract provision you add at the beginning with regard to ANY certification including applications for payment!

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    Thomas Zimmerman FAIA Thomas Zimmerman, FAIA
    Architect/Consultant
    Z2 Architecture, PLLC Z2 Architecture, PLLC
    Canandaigua NY Canandaigua, New York
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  • 7.  RE:Architect's Certification from Private Lenders/Underwriters

    Posted 09-14-2013 01:11 PM
    Below is the response from the AIA Contract Documents team.

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    Dear Mr. McManus,

    The AIA is aware that architects are sometimes required to provide certificates regarding the design to other parties and we have included language in our standard form Owner/Architect agreement (B101-2007) that gives the Architect some control over what certificates it can be required to execute.

    B101-2007 Section 10.4 states:

    If the Owner requests the Architect to execute certificates, the proposed language of such certificates shall be submitted to the Architect for review at least 14 days prior to the requested dates of execution. If the Owner requests the Architect to execute consents reasonably required to facilitate assignment to a lender, the Architect shall execute all such consents that are consistent with this Agreement, provided the proposed consent is submitted to the Architect for review at least 14 days prior to execution. The Architect shall not be required to execute certificates or consents that would require knowledge, services or responsibilities beyond the scope of this Agreement.

    Accordingly, section 10.4 sets some requirements and limits with regard to required certificates. For any requested certificate, the Owner must first provide the proposed certificate language to the Architect for review at least 14 days prior to the required execution date. Further, according to the last sentence, in no event will the Architect be required to execute a certificate that would require knowledge, services or responsibilities beyond the scope of the Agreement. Note: this requirement applies to lender assignment consents as well. As such, if you use B101-2007 (as well as a number of other AIA Owner/Architect agreements that include the same language), the Architect should receive the certificate language with sufficient time to review it and negotiate necessary changes and the contract language gives the Architect authority to refuse to execute an onerous certificate to the extent it requires knowledge, services or responsibilities beyond those required in the Agreement.

    We hope this response is helpful. Please feel free to contact us again with any question about the content or usage of AIA Contract Documents. You can also use the online Knowledge Base (http://info.aia.org/knowledgebase/" target="_blank">http://info.aia.org/knowledgebase/) to get immediate answers to nearly 250 frequently asked questions (FAQ) about selecting and using AIA Contract Documents. You can find out what you need to know quickly and efficiently by browsing through a multilevel Table of Contents, or you can go directly to FAQs on your subject with an easy-to-use Search feature. You can also find document synopses, commentaries, comparisons, articles and other resources at www.aia.org/contractdocs/reference.


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    Susan Parrish
    Manager
    The American Institute of Architects
    Washington DC
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    LGBTQIA+ in Architecture Symposium at AIA24. June 8, Washington, DC. Click here to learn more.


  • 8.  RE:Architect's Certification from Private Lenders/Underwriters

    Posted 09-16-2013 06:31 PM
    I am surprised that neither the AIA contract language, nor any poster to date has mentioned a collateral issue that arises when the Architect is asked to review and respond to, and then execute such certificates.

    The AIA posting quotes the A101, which allows 14 days for review.  The language appears to presume the Architect will do so as a paprt of its basic services.  Depending on circumstances, the Architect may or may not be able to respond timely - depending on what firm principals have to be involved.  This should be given consideration before agreeing the 14 days is adequate.

    It would not be possible, at the time the Architect negotiates its contract, to know what types of certificates are to be reviewed and acted upon.  The Architect thus would not be able to incorporate (with open eyes) a reasonable fee for this service - based on how much time it might need for language review, referral to others (attorney, carrier), discuss the terms in-house, prepare a proposed language revision, respond, negotiate, etc..  The Architect's admin/mgmt time is not, after all, free.  Is this considered an Additional Service, and charged accordingly?

    There may be multiple certificate requests (which is possible particularly if there are multiple lenders, or multiple owners, or multiple assignments, etc.).  The proposed certificates may not be 'standard' language the Architect has experience with on past projects.  The proposed certificates could be lengthier and more complicated than experience might dictate.

    The A101 language leaves open the question as to what, exactly, is within the Architect's "knowledge, services or responsibilities", and thus must be executed with the 14 day window.  Although this might seem to give the Architect some wiggle room, it might also be read by the Owner as broad language to which there are few exceptions.  Language that is not precise can lead to a disagreement - when the Architect says it believes the Certificate is asking for something beyond its knowledge/services/responsibility, but the Owner believes the Architect is wrong on that point.  Imprecise language (or a differing of reasonable minds as to what is within that 'envelope') are the stuff disputes are made of.  Can anyone here provide a precise definition of what is 'included' in that definition?  It could easily vary, depending on the extent to which the Architect's Construction Administration work has exposed it to the nuts and bolts of the work while on site.  What might not be known to someone on site once a month for a meeting may certainly be argued to be part of what is known to a site rep that is there daily, and has prepared extensive notes and photo files on every aspect of the Work being installed - in addition to the question of how extensively the Work has been recorded through meetings/notes, correspondence, RFI's, known problems/disputes among players, and etc..  It could also vary widely depending on whether the Architect has been involved with review and approval of payment applications - including whether it has diligently compared what is actually installed (correctly, not deficiently) against what is shown on the application.  The list is long.

    The Architect - if appropriately managing its risks - may/should require a review of proposed Certificate language by its attorney and/or its insurance carrier.  This is particularly true if the certificate(s) form is not identical to what it has dealt with previously.  The availability of these third parties must be known in advance.  If allowing for admin/mgmt/transmissions of even just one day at the front and one at the end (of the 14 day period) you may be left with only 12 days total.  Have you discussed with your attorney and carrier their ability and willingness to respond timely to your requests?

    Attorneys (and perhaps carriers) will certainly not offer their legal review services gratis.  How are the costs (to the Architect) for consultant/advisor reviews handled - are they passed to the Owner as an Additional Service (or reimbursable expense)?  This is, after all, an extra work requirement that is determined unilaterally by the Owner, and not under the control of the Architect.  What if the Owner asks for one more...  five more...  a dozen more...  each with language that has been drafted by the third party (which the Owner has to satisfy)?

    The allowed 14 day period language does not appear to specifically address an extended time frame for execution if the Architect determines negotiation of the language is required.  It seems to say that either the Architect will sign in 14 days, or refuse to sign because the language is unacceptable (outside its knowledge/services/responsibility).  Although this may seem a fine point - and a matter of 'reading' - where there is a lack of clarity it  could result in a liability for the Architect (as remote as this might seem).  The Owner is likely under a deadline - and may not be able to negotiate an extension with the third party that is waiting for the Architect's Certification to show up on its doorstep.  The Owner's emergency can become the Architect's nightmare - although that is surely not what is intended when the Architect signs its contract.   What happens if the Architect is seen as 'stubborn', and the lender tells the Owner to 'pound sand'?

    Perhaps a different approach to all of this is: 

    a) [prepare and incorporate as an Exhibit to the A101 a single form that will be the only 'standard' Architect's Certification, to be used for all Owner purposes (which the Owner can evaluate before the A101 is executed, and is part of the document package reviewed by any lender, so there are no surprises);  

    b)  if the Owner proposes any different format or language, offer to use 'commercially reasonable efforts' to review and execute in 14 days OR to respond with alternate proposed language;  

    c) include as an Additional Service, at hourly rates, all time the Architect spends on reviewing and executing any Certificate inconsistent with the one that is an Exhibit to the existing contract;  

    d)  include as a reimbursable expense any reasonable/customary attorney or carrier costs for review of proposed non-standard language by the Architect's advisors.

    I'm sure there are other factors/issues I've missed in this quick response... and other options for addressing risk assessment BEFORE the A101 is signed... and I'd welcome hearing other comments/ideas.

    CAVEAT:  I AM NOT AN ATTORNEY, AND THIS IS NOT INTENDED AS LEGAL ADVICE.
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    Howard Littman AIA
    Forensic Architect, Expert Witness
    Howard I. Littman, AIA
    Agoura Hills CA
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    LGBTQIA+ in Architecture Symposium at AIA24. June 8, Washington, DC. Click here to learn more.


  • 9.  RE:Architect's Certification from Private Lenders/Underwriters

    Posted 09-19-2013 10:08 AM
    I think the point that any certification should be considered an additional service is a good one as these sorts of things can engender significant time and expense.  I also agree that any certification should be reviewed by your insurance carrier for coverage issues and by legal counsel for legal issues (they are not the same - your attorney generally cannot advise you on coverage and your carrier generally cannot advise you on the law). 

    That said, without exception every one of these certifications generally create some difficulties in that they expand the Architect's responsibility.  Under the law in most states, the Architect is only required to be average - i.e.; to perform to that level at which the average, similarly situated Architect with similar training, education and experience, practicing in the same or a similar locale would perform (that is a pretty standard jury instruction type definition). You do not certify or warrant anything - unless your contract provides for it, or unless you undertake to certify independently - by responding to one of these requests for certification.  Understand that your insurance coverage extends to your inadvertent failure to meet the prevailing standard of care - i.e.; your failure to perform to that level at which the average, similarly situated Architect with similar training, education and experience, practicing in the same or a similar locale would perform.  If you agree by contract to accept other responsibilities or if you undertake to do so independent of your contract, you are likely straying from that conduct to which your coverage applies.  Certification by its very nature implies a warranty, and that alone elevates the standard of care which also places you beyond the limits of your coverage.

    I also see mention of things like certifying ADA compliance as being not significantly objectionable.  To the contrary, the DOJ initially tried to enforce the ADA against Architects, and was met with a stiff legal challenge.  The ADA, by its own express terms, only applies to those who "own or operate" a building - not to those who design buildings.  The DOJ effort to impose liability on the design professional accordingly failed.  As such, no claim can be brought against you as an Architect directly for failure to conform your design to the requirements of the ADA.  Your owner can of course be sued for non-compliance, and your owner could sue you, but a third party cannot bring a direct claim against you.  By certifying ADA compliance, you effectively warrant that the design meets the ADA requirements (thereby elevating the standard of care) and you open the door to direct third party claims against you by the beneficiaries of the certification (thereby expanding the scope of your liability beyond those basic limits imposed by law)

    That sounds complicated perhaps, but the net effect is you are left without coverage.

    In every case it would therefore be wise for any Architect from whom any certification is requested to refer the request to insurance and legal counsel.  There are things those types know that the Architect may not, and what may seem to engender limited objections may in reality present a more serious question.  

    Indeed, your work product carries the implicit representation to the effect that it complies with applicable codes, etc., but that is never a warranty or guarantee, and it never exceeds the limits of that which would be provided by the average practitioner unless you do something to make that so.  Don't do something to make that so - and every certification on some level is a request that you do something to make that so.

    Be wary.

     

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    Frederick Butters FAIA, Esq.
    Frederick F. Butters, PLLC
    Southfield MI
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    LGBTQIA+ in Architecture Symposium at AIA24. June 8, Washington, DC. Click here to learn more.