Managing the risks of residential projects

AA017975My previous blog post warned that residential projects (houses/townhouses, condominiums, and apartments) have resulted in the greatest number of claims against design professionals in the Schinnerer professional liability program. Here are some suggestions for ways to manage the risks of these projects:

  • Select clients based upon their experience, financial strength, ties to the community, and emphasis on quality design and construction.
  • Select projects that have a realistic budget and time frame, especially in relation to their degree of complexity for design and construction. Consider the implications of the contractor selection process.
  • Select subconsultants who are qualified, experienced, and adequately insured.
  • Be wary of providing limited or no construction phase services.
  • Be proactive on maintenance issues, especially on condo projects. Try to convince the developer to establish a contingency fund for testing, maintenance, and repairs. Arrange to be put on a retainer to work with the homeowners association (HOA). Offer to prepare a maintenance manual as part of your services. Have your client write into the by-laws of the HOA that required maintenance will be the responsibility of the homeowners.
  • Include a mediation clause in your contract. In the case of condominiums, ensure that a mediation clause is part of any sale, binding all future homeowners to mediation prior to litigation.
  • Review or have input into promotional materials.
  • As with all projects, pay appropriate attention to the quality of the design; continuously manage the expectations of your client through timely and consistent communication; and have a systematic, objective documentation process in place to document all relevant activity.
  • Use professional services agreements that fairly allocate risks to the party in the best position to manage those risks.

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