Common Pitfalls in Dealing with Major Repairs
Recent experience as litigation and general counsel for numerous associations who are currently tackling significant repairs suggests a couple of common pitfalls.
First, don’t skimp on the consultant. While some associations decide that using an engineer or architect to develop a scope of repair and oversee its implementation is too time consuming or an unnecessary expense, there is often significant value. A consultant’s scope can help ensure that any bids you solicit can be compared on an “apples to apples” basis. A consultant’s scope can also provide some assurance that the planned repair is sufficient to avoid unanticipated and costly change orders by, among other things, recommending investigative strategies to understand the issues and make the most efficient repair.
A consultant’s scope will also go a long way toward preventing any problems you may be repairing from recurring. Some contractors, faced with a problem with their work down the road, will try to disclaim responsibility for so called “design issues.” For example, a roofer may claim (erroneously in our view) that it has no responsibility for providing code compliant ventilation as part of its total reroof job. Its argument may be, “We were just asked to replace what was there.” By bringing a consultant to the table, the community association is better protected to deal with problems that may be characterized later as either design or workmanship issues.
Second, don’t just sign the contractor’s standard form of contract. Legal review of any significant contract is important. Some contractors use their own standard form that was drafted by their lawyers primarily to protect their interests. Such contracts can limit significant rights or other negotiable terms, including, among others, warranties, insurance requirements, indemnification, the impact of delays, and mandatory arbitration. Some contracts have payment timing requirements that create risk for the association in the event the contractor goes out of business or doesn’t pay its subcontractors.
A better practice in a significant repair is to use a more balanced, standard form of contract. The American Institute of Architects (“AIA”) has promulgated a family of contracts that are popular in the industry. ConsensusDOCS is another, though less frequently used, set of standard construction and repair contracts. Such contracts, reflecting a more party neutral view of common terms, can be efficiently reviewed and negotiated by experienced counsel to protect the interests of the community association.
As always, Barker Martin is ready to assist your community in meeting its repair and other needs. Please feel free to contact any of our attorneys if you have questions.