Within the last decade, mixed-use and multifamily residential projects have been on the risearound the world. Substantial movements toward urbanism and new solutions to housing supply shortages in cities like Los Angeles have spurred the need for denser, bigger housing. But while these projects have had a positive impact on the industry as a whole after the Great Recession, coordination for these large-scale projects, such as issues of defining clients and owners, open architects up to new liabilities and tricky legal situations that they don’t often face in single-family residential work. Stepping in on the architects’ behalf, the American Institute of Architects (AIA) has developed a contract that helps architects avoid the potential problems with these increasing prevalent projects.
To help us understand these issues and their solutions better, Kenneth Cobleigh, Esq., Managing Director and Counsel for AIA Contract Documents, walked us through the B109™, the AIA’s Standard Agreement Between Owner and Architect for Multifamily or Mixed-Use Residential Projects. Originally drafted in 2010, the B109 contains a lot of the language and conditions familiar to anyone who uses a standard AIA contract document but with specific key terms to address the concerns of large-scale projects. “Multifamily residential and mixed-use projects are often complex,” Cobleigh says. “Project scheduling and cost estimating can be difficult and complicated. In addition, making sure that the exterior envelope of the building is properly designed and constructed is essential to avoid problems associated with water and wind penetration. These risks are better managed by special consultants retained by the owner.”
With that in mind, the B109 works to make sure specific multifamily project issues are discussed before any designs get started. By prompting both parties to discuss special contractors and consultants at the outset, the B109 allows architects to better focus on their work knowing that professionals will be brought in to assess acoustics, environmental impact, accessibility, traffic, zoning and land use or other similar issues that arise with multifamily projects. Cobleigh notes that while the contract reminds both parties to bring in these specialists, it was also developed to underscore the importance of the architect to be involved in these early stages. That is why the B109 specifically outlines a predesign service phase for which the architect is separately compensated.
“Predesign services include services geared toward assessment of project feasibility, options for project layout and development concepts (unit types, sizes, etc.) and assessment of regulatory requirements,” Cobleigh explains. Generally not included in the traditional five phases of an architect’s services, this predesign phase can be crucial for determining viability and configuration of multifamily projects. Through the B109, architects gain access to owner-provided studies, meetings with regulatory entities and discussions with consultants retained by the owner, which allow them, in return, to assist the owner in dealing with the authorities who have jurisdiction over the project. “B109 begins from the premise that the architect will be involved in these activities and will be compensated for this work,” Cobleigh says.
Another major feature of the contract is that it requires the owner to disclose whether or not the facilities involve residential condominiums. Cobleigh admits, “There are several added elements of risk if the project involves residential condominiums.” Primarily, condos can pose potential problems for architects stemming from issues of ownership. “Understanding the nature of the business entity developing the condominium is important when assessing potential exposure on the project,” explains Cobleigh. “It will be important to understand whether the ‘owner’ is a single-purpose entity formed solely for the project, which might be dissolved or left without any real assets once the project is turned over to the condominium owners.”
Helping to address this and other specific issues with condominiums, AIA developed the supplemental B509™-2010. As a guide for supplementary conditions, the B509 allows architects to navigate these potentially difficult relationships and ensure that they are protected no matter who ends up owning the completed condos. In addition to defining exactly who the final owner will be, the B509 stresses the importance of gathering as much information as possible about the project’s developer and their own experience with condominiums. Everything from adequate insurance coverage to developing a proper maintenance manual for individual owners moving in can create great risk for architects after the project is complete and need to be addressed up front.
Cobleigh says that the B509 ensures “the importance of the architect’s construction phase services as an element of risk mitigation.” The B509 outlines the option for full time representation during construction, post-occupancy site visits, mockups and testing of key building systems, oversight on contractors, other key issues related to a condominium association and any dispute resolutions that might arise with them in the future. Having all of these matters worked out in advance of a major project can help architects avoid legal headaches and have the peace of mind that comes from knowing, as Cobleigh says, “AIA Contract Documents are drafted to be fair and balanced and are generally recognized as the industry standard.”
Resources:
· B509 – 2010 – Supplementary Conditions to AIA Document B109™–2010
