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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Original Message:
Sent: 09-14-2013 13:10
From: Susan Parrish
Subject: Architect's Certification from Private Lenders/Underwriters
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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Original Message:
Sent: 09-13-2013 09:57
From: Thomas Zimmerman
Subject: Architect's Certification from Private Lenders/Underwriters
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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Original Message:
Sent: 09-11-2013 13:47
From: Thomas McManus
Subject: Architect's Certification from Private Lenders/Underwriters
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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