construction contracts common interest developments

Construction Defect and Litigation Attorneys

Robert P. Hall, Esq.

Construction Contracts Common Interest Developments

Roles/Responsibilities of the “Players” (Reference Document)

Spring 2014

PARTICIPANTS IN REPAIR RENOVATION PROCESS ROLE/RESPONSIBILITIES

ARCHITECT   Predesign   Assist the owner and CM to determine the project

goals and requirements   Develop the project design   Coordinate the design consultants   Process entitlements related to design

responsibilities   Ensuring regulatory and code compliance

PARTICIPANTS IN REPAIR PROCESS ROLE/RESPONSIBILITIES

ARCHITECT (Slide 2)   Work with the CM advisor to estimate construction

costs   Work with the CM advisor during constructability

reviews   Assist the CM advisor and owner with the

construction bidding and negotiation   Review and approve shop drawings during the work   If hired, offer limited coordination with the CM

advisor during the repair process (does not mean engage in detailed review of the quality of the work)


CONTRACTOR   Estimating and bidding the cost of construction   Obtaining entitlements related to construction such as building permits   Preparing shop drawings and other documents necessary to accomplish

the work   Providing the methods and means of construction   Coordinating the subcontractors   Job site safety   Coordinating with the CM advisor to establish and maintain the construction

schedule   Guaranteeing the quality of construction   Fulfilling the requirements of the construction documents   Correcting deficiencies covered by the guarantee


CONSTRUCTION MANAGER   Keep the owner informed about the issues that arise

during the construction, including cost and schedule with secondary implications for the project’s quality – under this approach the owner obtains technical support from the CM

  The CM supervises the construction   The CM resolves any issues at the point of bidding

or negotiations such that the final results and the final quality are relatively predictable

Why can’t an architect be the sole CM?

  Consider industry approved language architect’s offer from the American Institute of Architects (AIA) form of agreement:   Specifically excludes an Architect conducting exhaustive or

daily inspections to check the contractor’s work

  An industry gap surfaces:   Are architectural firms typically set up to play the CM role?

Construction Manager’s Core Services

  If hired as an “adviser” to the owner, an experienced construction manager (CM) should be considered an “independent resource” with technical expertise who through offering services can assist the owner primarily related to risk management.

Construction Manager Core Services

  The CM, who in turn has an architect in its employ:   Operates under a separate contract with the owner.   Protects owner given the gaps of service typically offered by

other participants in the construction industry such as architects and contractors.

  Manages the risk inherent in the construction industry.   Monitors the progress of the contractor and architect.

Construction Manager Core Services

  The CM assists the owner reduce risk by:   Managing costs   Evaluating scope options   Scheduling the work   Delivering the quality of work that contract documents and

building codes require.   When a fee/cost comparison is made between what a “CM as agent”

of Owner can provide to protect the Owner as identified above, and what an architect would charge to provide the exact “by contract” service, most Owners cannot afford an architect to perform the same role as a CM could offer

What are owner risk points?

  Decisions such as choosing which project delivery to adopt (best choice varies with each project):   Design-bid   Design build   Multi-prime and others.

  Ensuring that quality controls are in place by contract/applies to contractors and designers.

  Ensuring that cost controls or pricing and budget limits exist.

  Ensuring that time or schedule controls exist.

What are owner risk points? (cont’d)

  Setting up bid procedures and managing bid disputes.   Understanding and negotiating contract issues that

pose risk points to owners for every project (a separate presentation).

  Handling payment applications and lien releases to ensure a “lien free” and “on budget” repair or renovation job.

What are owner risk points? (cont’d)

  Handling changed conditions and or change order claims as well as delay claims by contractor.

  Dealing with the potential for bad chemistry between the project delivery team such as the architect and contractor.

  Managing close-outs issues and defects post project.

Ounce of Prevention (Lawyer fee-a minimal Owner investment to manage risk)

  Owners should consider hiring a construction lawyer who:   Specializes in construction contracts.   Is knowledgeable on how defects occur.   Has a depth and breadth of experience with the construction

process:   Standards of care and practices of architects, engineers, and

contractors.

  AIA contracts (a great industry benchmark for contract issues).   If lawyer hired to review all contracts, lawyer is in position to assist

Owner with a “bird’s eye” or elevated view of all contracts

Construction Defect and Litigation Attorneys

Robert P. Hall, Esq. Spring 2014

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