By now, everyone knows that Oregon is in dire need of new housing. Oregon’s housing shortage dates back decades, driven by population growth and insufficient construction. During the 2010s, population growth outstripped delivery of new housing three to one. And despite increased housing construction being a priority of our elected officials for as long as the shortage has existed, nothing so far has worked to increase supply. In fact, the affordability of first-time homeownership has continued to dwindle despite the efforts of those elected officials.

The latest effort to try to jump-start housing development is HB 3746 (2025), which became effective Jan. 1, 2026. This bill shortens the statute of repose (measured from substantial completion) for contractors, project managers and design professionals in negligence or other tort actions brought by a homeowners association for a planned community or owners association for condominiums from 10 years to seven years. The bill also imposes additional inspection obligations on the association and requires that the association provide 90 days’ notice to the individual unit owners and to those it intends to sue, hold a vote to bring the action, and allow individual unit owners to opt out of the association action.

HB 3746 does not shorten the period for individual actions by unit owners, breach of contract claims (that would include express warranty claims, such as roofing materials), or actions against the developer, at least to the extent that the claim did not involve the developer’s supervision of the construction. These changes also apply only to projects where the declaration defining the condominium or planned community was first filed on or after Jan. 1, 2026.

The notice requirements the association must give are quite involved. Four notices are now required to be given to the unit owners: three new ones before the association votes to bring the action, and one (previously required) before the action itself is filed. The three pre-meeting notices must abide by the following sequence: a first notice at least 90 days before the association meeting to vote to file the action, a second notice by first-class mail with a certificate of mailing before the meeting, and a third notice by first-class mail at least 15 days before the meeting and vote.

Each notice to the unit owners must contain specific information: 1, notice of a defect in the common property (jointly owned portion, and not exclusive to a single unit the responsibility of an individual owner); 2, a description of the defect; 3, identification of the parties the association considers responsible for the defect (contractor, architect, engineer, or the like); 4, the names of all board members and their contact information; and 5, a warning that says: If the board decides to proceed with the proposed litigation or administrative proceeding, your ability to sell your lot in this planned community may be limited while the litigation or proceeding is pending. If you have opinions or information that you wish the board to consider in making its decision, you are advised to contact the board promptly.

These warnings to the owners are in addition to the previous warning requirement of giving each owner notice, 10 days before initiating the action, the option to opt out of the case.

Finally, the first pre-association meeting notice must also be sent to all those identified in the notice as targets of the to-be-filed action. This also is in addition to the previously required defect notice and opportunity to inspect and cure required before most actions brought for residential construction defect against contractors, subcontractors and suppliers, although there are modifications to the timeline of such notice and secondary notice to subcontractors and suppliers.

With all this said of the new law’s requirements, the real question is: Will it have any effect on the reluctance to build condominiums in Oregon? It may make insurance costs for such projects less expensive, since the period to maintain the coverage will be reduced and the shorter time period may also lessen the risk that association deferred maintenance can masquerade as a construction error, but an association’s board will still be under the same pressure to bring a claim to avoid being the target of owner wrath for failure to take action before the deadline to do so expires. And none of these addresses, or could address, the financial realities of condominium ownership, especially for first-time buyers – there is both a mortgage cost and the association fees, less appreciation than single-family homes, and the looming peril of the special assessment for periodic and possible overdue repairs. Only time will tell if the reduced time and additional hurdles to bring a defect action in HB 3746 will result in any increases in condominium construction.

Bill Ohle is a Schwabe, Williamson & Wyatt shareholder. Contact him at 503-796-2414 or wohle@schwabe.com.

This column is intended to provide readers with general information and not legal advice. Consult professional counsel for help regarding specific situations.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the author and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither the author nor the 91��Ƶ guarantees the accuracy or completeness of any information published herein.

The post Oregon condominium liability reform: too little, too late? | Opinion appeared first on Daily Journal of Commerce.

Back in 2023, with little fanfare, the Oregon Legislature passed Senate Bill 224: long overdue legislation that modernized the regulation of the practice of architecture in the state. Though the changes have been in effect for well over a year now, very little has been written about the changes or their implications. It’s time for a little catch-up.

Changes to the law were developed by the Oregon State Board of Architect Examiners — the regulatory body for architects in Oregon — based on stakeholder sessions and research done primarily at the administrative level. The legislative history itself turns out to be minimal but does indicate that the changes arose from National Council of Architectural Registration Board’s Model Law and by statutes that govern architecture in other jurisdictions.

The changes are too numerous to cover in this article, but the highlights include changes to the definition of the practice of architecture; a new definition and application of an architect’s “responsible control;” new provisions governing architectural firm ownership, naming, and liability; use of the title “architect;” retention of project files; and allowing out-of-state architects to now offer service in Oregon contingent on later registration.

The first major update is to the definition of the practice of architecture itself — something that cannot be done without being properly registered in the state. The new definition now provides in full: “Practice of architecture” means engaging in the art and science of designing, in whole ‎or in part, buildings and the space within and appurtenant to buildings and providing related ‎services that include, but are not limited to, planning, developing design concepts, preparing ‎technical submissions and other documents that define a building’s form and function, ‎coordinating construction work and the work of other consultants and providing construction ‎phase services.‎

New to the definition is the reference to the “art and science” of design. Importantly, it is not just the art, but both art and science, thus distinguishing the practice of architecture, which requires registration, from preliminary design analysis often undertaken by laypersons or employees of non-architect developers in the early stages of project development.

The legislation also added a new definition for “responsible control,” which “means a degree of control over an operation that is consistent with the scope of a registered architect’s professional knowledge and the application of a registered architect’s professional standard of care.” Responsible control ties into the duties of an architect to oversee the design work the architect stamps, local oversight of a foreign architect, new document retention requirements, and the practice of architecture by an architectural “firm,” which is a business entity like a corporation or limited liability company that can only provide services through an owner or employee who is a registered architect and has responsible control over the services. The responsible control over the services by a registered architect of an architectural firm replaces the previous requirement that two-thirds of the board or owners of the firm be registered architects or engineers.

SB 224 does clarify whether an architect retains personal liability for professional errors even if the architect performed services through an architectural firm — regardless of how that firm is formed, be it a professional corporation, a standard business corporation, or other type of entity. The law now provides that a “shareholder, director, member, officer, employee or agent of an architectural firm may be held personally liable for negligent or wrongful acts or misconduct committed by the shareholder, director, member, officer, employee or agent, or by a person under the direct supervision and control of the shareholder, director, member, officer, employee or agent, while rendering professional service on behalf of the architectural firm to a person receiving the service the same as though the service were being rendered by an individual.”

Another newly defined term is “technical submissions,” which means those documents ‎stamped by a registered architect and submitted to a permitting authority. Not only do such ‎documents require a stamp, but the stamping architect now has an express duty to retain them, as well as any documents that demonstrate responsible control, for 10 years from completion of the project.‎

The bill has liberalized the ability of out-of-state or “foreign architects” to offer architectural services in Oregon without first registering or receiving special permission, as long as the offer discloses that the foreign architect is not yet registered and cannot perform the actual services until becoming registered. Also liberalized is the use of the “architect” title itself. Where the prior law purported to outright ban the use of the title “architect” by anyone who was not registered, the new law — recognizing the free speech limitations on banning specific words — simply prohibits assuming or using “a title, form of address or other designation … that indicates … that the individual is an architect or that the individual or business entity engages in the practice of architecture.”

Finally, the law has updated the use of the old medieval term “clerk of the works” to allow an unregistered employee of a registered architect to undertake tasks such as drafting and site observations, as long as the employee is “acting under the registered architect’s instruction, control or supervision” and does not purport to be an actual architect.

There are many nuances to the new law and other facets that have not been considered or may even conflict with prior court decisions. If presented with a question about how the new law may impact your profession or a project, it is always best to consult an attorney experienced in these areas who is up to date on the changes.

Bill Ohle is a Schwabe, Williamson & Wyatt shareholder. Contact him at 503-796-2414 or wohle@schwabe.com.

This column is intended to provide readers with general information and not legal advice. Consult professional counsel for help regarding specific situations.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the author and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither the author nor the 91��Ƶ guarantees the accuracy or completeness of any information published herein.

The post Catching up on Oregon’s updated regulation of architects | Opinion appeared first on Daily Journal of Commerce.

Last year, with little fanfare and few comments, the Oregon Legislature passed Senate Bill 228, which made crucial and interesting changes to the authority of the Oregon Construction Contractors Board. Provisions of the new law, which became effective Jan. 1, expand the CCB’s rule-making authority, and make it easier to track and deny new licenses to previously disciplined contractors, as well as add grounds to revoke, suspend, or now condition, licenses.

SB 228 begins with an expansive and unique grant of rulemaking authority — one that a search of Oregon law turns up in only one other place: in the adoption of rules that govern the state building code and its enforcement (ORS 455.112, originally enacted in 2003). The new law allows the CCB to adopt rules wherever licensing requirements are “unclear, duplicative or in conflict” or when a licensing requirement “conflicts” with the CCB’s “efforts to modernize operations.” The rules may “interpret, harmonize, streamline, adjust or promote consistent application” of the licensing requirements. Usually, a grant of rulemaking power to an agency simply says the agency may adopt rules necessary to implement its responsibilities as specified by the legislature. Here, the grant is much broader.

The bill also adds something I have not found anywhere else in Oregon law: the ability for the CCB to enact rules that identify “exceptional circumstances” that would allow the board to consider a complaint against a contractor and presumably discipline that contractor for something the CCB would “otherwise deny.” While it is not entirely clear what the legislature meant by a complaint the CCB would otherwise deny, one likely explanation is a grant to the CCB to define for itself activities so “exceptional” and egregious as to warrant penalty, although not specified by the legislature.

Currently, the CCB has proposed no new rules under the new authority granted by SB 228. No doubt, the new law and especially the ability to define “exceptional circumstances” that allow for contractor sanctions when not otherwise specified by the legislature will have a lot of lawyers — and any contractor caught up in it — scratching their heads. It also will be interesting to see how the CCB chooses to implement its new powers, especially now, in an era when the exercise of broad discretion by administrative agencies is under increased scrutiny by the courts — see the recent U.S. Supreme Court argument in Loper Bright Enterprises, Inc. v. Raimondo, seeking to overturn the deference given to administrative agency decisions. In Oregon, specifically, there are limits on how much the legislature can delegate to agencies the ability to enact regulations: the legislature “cannot delegate its power to make law, but … it can delegate, at least to an agency of government, the power to determine the existence of facts or circumstances mentioned in the law upon which the law will become operative.” See State v. Sargent (1969). How the CCB decides to move forward with new regulations will determine whether the regulations can withstand legal challenges.

Next, the bill gave the CCB the ability to “condition” licenses, and revoke, suspend, or refuse to issue or reissue them as a penalty for a laundry list of bad acts, including a few new ones. SB 228 now empowers the CCB to sanction contractors, condition their license, or deny a license application based on failure to comply with a previous settlement agreement entered in a CCB proceeding; failure to pay a subcontractor or vendor resulting in a lien; failure to pay subcontractors or vendors on public projects after payment by the government; and, most significant, being the holder of a current license or the applicant for a new license while also being a business, a reorganized business, or a business with the same “owner, director, officer or partner” of a prior licensee whose license had been revoked, suspended, or otherwise penalized. This includes not only penalties imposed by the CCB, but other statutory penalties and sanctions in other states, as long as they “related to … engaging in construction.” The obvious problem addressed by this last new provision is the continuing practice of contractors whose license has been previously revoked simply moving on to a new business entity, receiving a new license, and continuing to perform as a contractor — in defiance of the CCB’s responsibility to protect the public from unscrupulous practitioners.

Finally, SB 228 includes several grammatical changes to clarify prior provisions. All in all, the new legislation provides for much-needed changes to enable the CCB to address trends in the industry and the ongoing practice of unprincipled contractors jumping from one business to another. It remains to be seen how the CCB will implement its new rulemaking authority and whether it stays within the limits of administrative authority to expand upon what is granted by the legislature.

William (“Bill”) Ohle is a shareholder in the Portland office of Schwabe, Williamson & Wyatt. Contact him at 503-796-2414 or wohle@schwabe.com.

This column is intended to provide readers with general information and not legal advice. Consult professional counsel for help regarding specific situations.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the authors and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. None of the authors nor the 91��Ƶ guarantees the accuracy or completeness of any information published herein.

The post New legislation and rule changes coming to the Oregon CCB | Opinion appeared first on Daily Journal of Commerce.

A few years ago, at the beginning of the pandemic, I wrote an article about the shifting norms in building design and legal risk for architects and engineers arising from the quickly evolving shifts in building use and public behaviors. The uncertainty at the time gave rise to a need for increased flexibility in design that would ultimately be reflected in the applicable standard of care for design professionals. The article’s purpose was to make note of how the standard of care can change over time because it is based on what is expected of a professional in the local community and what architects and engineers, as well as owners and contractors, could do to manage risk when those standards are changing rapidly.

Another similar stress on the standard of care is arising in affordable housing. There is no question that the United States (Oregon in particular) is facing a severe housing shortage. A key component, if not the key component, to any solution is the availability of housing across a broad price range.

In just the past few months, the Oregon Legislature passed House Bill 2001, which among other things, emphasizes the building of “housing to meet the need of Oregonians at all levels of affordability.” The legislation has set lofty goals, including housing that is “safe, accessible and affordable in the community of [the owner’s] choice,” “equitable,” and supports “fair and equitable housing outcomes, environmental justice, climate resilience and access to opportunity.” The bill also recognizes that housing production “should not be undermined by litigation, regulatory uncertainty or repetitive or unnecessary procedures.”

No one can doubt such a housing bill’s sincerity and good intentions, but trying to balance these competing objectives will be challenging. A great deal of that challenge will fall on the architects and engineers tasked with designing housing that can meet the legislation’s goals and remain economically viable for the owner or developer. Forests have been decimated for the printing of articles about housing inequity, supply, and the proposed solutions. I am not here to address those issues but to speak to the contractual and professional standards that allocate the risk of attempting to solve those problems while keeping in mind the specific goals of the Oregon bill to reduce litigation, regulatory confusion, and wasteful procedures.

While a professional’s standard of care is something imposed on that profession by the “common law,” that being regardless of what the parties privately agree by contract, the expectations of the parties’ performance and the application of the standard of care can be clarified and limited, to an extent, by the contract and the context of the specific project. For example, for a medical doctor, there is a difference between brain surgery and diagnosing a cold. For architects and engineers, there is a difference between designing an operating room and designing a local clinic.

The general statement of the design professional’s standard of care is well described by the standard language used in the American Institute of Architects’ contract forms, such as the AIA B101-2017, which states for architects at Section 2.2 “the Architect shall perform its services consistent with the professional skill and care ordinarily provided by architects practicing in the same or similar locality under the same or similar circumstances.” The same standard applies to engineers and any other type of design professional.

The phrases “same or similar locality” and “under the same or similar circumstances” are key for affordable housing. For any design contract for a construction project, it is very important to specify not just the type of project but any limitations or special circumstances that relate to the purpose. This would be especially important to any project that is meant to meet the goals in HB 2001. While there are minimum standards required by the building code for any project, not all projects are created equal, and part of the budget limitation in affordable housing will inevitably affect the quality of the construction. There will be pressure to provide the minimum cost design allowed by the code – but this could easily conflict with the bill’s other goals. There is often talk of relaxing building codes, changing zoning, reducing lot sizes, increasing density, eliminating parking, reusing brownfield properties, repurposing existing buildings, and eliminating certain required improvements, such as sidewalks. These may reduce the cost of projects and add to low-cost housing but are arguably not “equitable” to more expensive housing.

While the policy balances are for others (public officials, owners, developers) to decide, the limits on the project and the balance of the policy goals should be expressed in the design and construction contracts. For example, it has been common for years now that in the contracts for the design and construction of apartment buildings, even higher-end apartment buildings, there be limitations on condominium conversion and express acknowledgments that there is a marked difference in quality standards between buildings designed as apartments and those designed as condominiums. The purpose for such acknowledgments is to put on record the understanding between the owners, the designers, and the contractors, the specific circumstances of the project and thus to put guardrails on the applicable standard of care. This acknowledgment and the limiting circumstances of the project could then be used in any subsequent construction defect litigation to define the professional standard of care for that particular project.

A similar acknowledgment could be used for affordable housing projects, especially in light of HB 2001. The competing policy goals could be stated, and the owner or developer could accept the ultimate responsibility to balance those goals. This contractual limitation would be especially important if there were concessions in the applicable codes applied to the project by public officials to reduce costs.

While there will always be minimum health, safety, and accessibility standards that design professionals should never design below, there can be flexibility on any “premium” to design and construction. Designing and constructing affordable housing should not bring increased risk of liability. A carefully crafted contract can make that happen.

William (“Bill”) Ohle is a shareholder in the Portland office of Schwabe, Williamson & Wyatt. Contact him at 503-796-2414 or wohle@schwabe.com.

This column is intended to provide readers with general information and not legal advice. Consult professional counsel for help regarding specific situations.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the authors and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. None of the authors nor the 91��Ƶ guarantees the accuracy or completeness of any information published herein.

The post Design professional standard of care vs. affordable housing needs | Opinion appeared first on Daily Journal of Commerce.

While architects and engineers take responsibility for the safety of the buildings they design, they usually are not responsible for protecting the property or the people on-site during construction. If a finished building falls because of improper design, the architects and engineers who stamped the drawings will be the prime suspects for the failure.

It is the general contractor, however, who is usually responsible for keeping the work site safe while the building is under construction. It is the accepted standard in the construction industry that the general contractor is responsible for the physical protection of the construction work and the people on-site – workers, visitors and the general public – while the construction work is ongoing.

The owner can have a role in insuring the property and securing the property as a whole by purchasing builder’s risk insurance and perimeter security depending on the nature of the property and project. However, the general contractor is the one on-site daily, and in the best position to control the work site and the people allowed on-site as well as enforce safety precautions. This said, by contract, course of performance, or even local building code requirements, architects and engineers may be unwittingly exposing themselves to liability for construction site injuries.

This industry standard is reflected in a number of places. OSHA often requires contractors to develop a site specific safety plan. Even if not legally mandated, a contractor’s site specific safety plan is wise from a safety standpoint and a liability perspective. If someone is hurt, the contractor can show in its plan that it took all the necessary reasonable precautions.

It is important to note that these OSHA plans are not usually the responsibility of the architect or engineer. Further, Oregon Revised Statute 30.785 generally protects architects and engineers from liability for construction site injuries covered by Oregon’s workers’ compensation system. It arises from the failure of the worker’s employer to comply with safety standards on the construction project, such as the contractor’s site specific safety plan. This protection is strictly limited, however. The architect or engineer can assume such liability by contract, and the statutory protection does not cover the “negligent preparation of design plans or specifications.”

As for assuming responsibility for work site safety by contract, the standard AIA construction form contracts (produced by the American Institute of Architects) contain several protections and disclaimers for design professionals. The standard architectural services contract form,‎ AIA Document B101™ – 2017‎, § 3.6.1.2, specifically limits the architect’s responsibilities: “The ‎Architect shall not have control over, charge of, or responsibility for the construction means, methods, techniques, ‎sequences or procedures, or for safety precautions … The Architect shall be responsible for the Architect’s negligent acts or omissions, but shall not ‎have control over or charge of, and shall not be responsible for, acts or omissions of the Contractor or of any other ‎persons or entities performing portions of the Work.‎”

Likewise, the standard general contractor form, general conditions,‎ AIA Document A201® – 2017‎, ‎§ 4.2.2, places the responsibilities on the contractor: “The Architect will ‎not have control over, charge of, or responsibility for the construction means, methods, techniques, sequences or ‎procedures, or for the safety precautions and programs in connection with the Work, since these are solely the ‎Contractor’s rights and responsibilities under the Contract Documents.‎” The AIA Document A201® – 2017 goes on in Article 10 to specifically assign the safety responsibilities to the contractor: “The Contractor shall be responsible for initiating, maintaining, and supervising all safety precautions and programs ‎in connection with the performance of the Contract … The Contractor shall implement, erect, and maintain … reasonable safeguards for safety and protection, including posting danger signs and other warnings ‎against hazards; promulgating safety regulations; and notifying the owners and users of adjacent sites and utilities ‎of the safeguards.‎”

Regardless of these general legal and contractual provisions disclaiming responsibility for work site safety, architects and engineers can find themselves either necessarily or unwittingly involved in safety measures. Sometimes it is unavoidable. Highly technical work on mechanical equipment may require an engineer to evaluate and specify the procedure for the work, exposing the engineer to liability should anyone or anything be hurt during the procedure, and likewise with civil or structural engineering work on existing structures or sites with unknown or latent characteristics.

But these risks are expressly understood as being part of the job and can be planned for, mitigated, and, if nothing else, insured against. On the other hand, sometimes the risks can be inadvertently or unintentionally assumed. If the standard disclaimers are altered during contract negotiations, the parties may not realize that by doing so, they might shift responsibilities between the parties. In any project there could be “mission creep,” where an architect or engineer specifies a procedure not realizing it is outside their scope of work but implicates workplace safety.

For example, the city of Portland sometimes requires an occupancy safety program to obtain permits for work on occupied buildings – something that requires a written plan stamped by an architect or engineer (Engineering Guide #1, 2001). Once this plan is stamped, the architect or engineer is responsible for any errors, and thus any injuries arising from those errors, on the plan. Finally, suppose during a site visit, the architect or engineer becomes aware of unsafe conditions. In that case, they may have a duty to report those unsafe conditions to the owner and authorities, or risk liability for those injuries.

As with any legal risk facing a professional in the construction industry, the best guard against risks and liabilities, known and unknown, is to consult legal and insurance consultants before and during a project to understand the risks and how to protect against them.

William (“Bill”) Ohle is a shareholder in the Portland office of Schwabe, Williamson & Wyatt. Contact him at 503-796-2414 or wohle@schwabe.com. This column is intended to provide readers with general information and not legal advice. Consult professional counsel for help regarding specific situations.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the author and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither the author nor the 91��Ƶ guarantees the accuracy or completeness of any information published herein.

The post OP-ED: Review of design professional liability for construction site safety appeared first on Daily Journal of Commerce.

As projects become more and more complicated, owners often look to simplify the building process by hiring a single firm to handle both design and construction. This is perfectly legal and commonly known as the “design-build” delivery method.

A design-build project has many advantages. There is only one point of contact for the owner to manage. The contractor has significant control over the entire design, procurement and construction process, and therefore has more control over price and quality. And there is coordination between the design team (architect and engineers) and the contractor from the very beginning.

There are downsides as well – with all the owner’s eggs in one basket, if the contractor is not up to the task, it will take longer to discover and correct the problem. Also, the design can become captured by the contractor, and the design team does not have a direct line of communication to the owner to warn of deviations between the design and the contractor’s work.

And it is on this last point that a disconnect often arises between what the design-build contractor promises the owner to deliver and what the design team’s architect and engineers promise to deliver to the contractor. In a more traditional delivery method, where the owner independently hires the design team to develop the plans that then go to the contractor who promises to build what is designed, there is no warranty by the design team to the owner that the design will be perfect. The standard for which designs are made is known as the “professional standard of care,” with that being “services consistent with the professional skill and care ordinarily provided by (design professionals) practicing in the ‎same or similar locality under the same or similar circumstances” (see Section 2.2, AIA Document B101 – 2017‎). Likewise, most contracts between members of a design team and a design-build contractor do not warranty the design services, but limit the standard for the designs to the professional standard of care.

There is good reason for this limit. While professionals generally are often held to a higher standard of performance and trust, the skills often cross over into the realm of art and also a balance between the current state of building technology and an owner’s expectation in both final product and cost. It is the job of the design professional to balance the owner’s competing interests and advise the owner on the realm of the possible. The limits of design can be pushed, and that is often lauded and seen as progress. But such progress comes with an element of risk, and design professionals are protected to a certain extent from that risk by the limits in the professional standard of care. The flip side of that protection also protects a contractor in a traditional project where, as long as the contractor builds what the owner’s design team designs, then the contractor is not held responsible for errors in the design.

This protection, however, is not often carried over to the warranties given by the design-build contractor to the owner where the designs are not developed independent of the contractor by the owner, but are developed by a design team directly for the contractor. Often, the limits of the professional standard of care are not carried over in the contractual obligations and warranties provided by the contractor to the owner, and this creates a risk where a contractor essentially promises to the owner a building without defects, but the plans provided by the design team to the contractor contain no such promise – rather only a promise that the design will be consistent with the care of the local profession.

This raises the possibility that the design-build contractor might be held to a higher standard to the owner for the design of a project than the actual team that produced the design. That could leave the contractor with liability that it cannot pass on to the design team. This can also give rise to a gap in insurance coverage for the risk, because many design-build contractors rely on the professional errors and omissions coverage of the architect and engineers that the contractor hires. But professional errors and omissions coverage only protects from breaches in the professional standard of care and not contractual warranties. Even if the design-build contractor procures its own professional liability coverage, it will only supplement the coverage of the design team. It will not cover breaches in warranty beyond the professional standard of care.

Thus, it is always important – whether you are an owner, contractor or design professional, and especially so with design-build contracts – to review contracts carefully to make sure there are no gaps in the responsibilities and liabilities that flow between the parties and to always seek out the advice of an experienced construction attorney if there are questions or if the standards and warranties are unclear.

William (“Bill”) Ohle is a shareholder in the Portland office of Schwabe, Williamson & Wyatt. He represents businesses and design professionals in the real estate and construction industries. Contact him at 503-796-2414 or wohle@schwabe.com.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the author and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither the author nor the 91��Ƶ guarantees the accuracy or completeness of any information published herein.

The post OP-ED: Design-build pitfalls for owners, contractors and design professionals appeared first on Daily Journal of Commerce.

It is not much of an overstatement to say that during the last three months, everything has changed, and things are continuing to change on a daily basis. The COVID-19 pandemic has not only generated health concerns and economic turmoil, but also led architects, engineers, building owners, building tenants and maintenance personnel to rethink the design criteria for new and existing spaces. These criteria are not merely aesthetic or a reflection of some new management concept, such as the now problematic idea of “open-office workspaces,” but are driven by tangible public health concerns.

Design professionals are still in the early, contemplative stage of developing new ideas and standards for safer, healthier designs in light of the virus – a stage they may be in for the foreseeable future, given the more we learn about the virus, how it is spread, and what design choices are effective in mitigating transmission. But eventually advancements in design will become the standard and thus embedded in the design professionals’ standard of care.

A design professional’s standard of care, which is the level of quality that an architect’s or engineer’s work must achieve to avoid liability for professional malpractice, is best described by the standard language used in the American Institute of Architects’ contract forms, such as the AIA B101-2017, which in Section 2.2 states: “The Architect shall perform its services consistent with the professional skill and care ordinarily provided by architects practicing in the same or similar locality under the same or similar circumstances.”

A design professional’s standard of care is also influenced by the regulations enacted by the professional licensing boards. Directly relevant to designing in the age of COVID-19, the regulations governing architects in Oregon maintain that an “architect or architectural firm shall at all times recognize the primary obligation is to protect the health, safety, and welfare of the public in the practice of architecture.” (OAR 806-020-0020[1].) Thus, by its very nature, the professional standard of care is an ever-evolving benchmark and depends on the knowledge and principles applied within the design community at large and at the time a project is being designed, with an emphasis on health and safety.

While the rate of change in the professional standard of care is usually a slow process, new developments and findings in the COVID-19 pandemic are reported daily and have been known to change. For example, during the beginning weeks of the pandemic in the United States, the Centers for Disease Control was not recommending people wear face masks, was very concerned about the transmission of the virus from surfaces, and was making no distinction between indoor or outdoor environments. As a result, architects began exploring the use of surface materials that were easier to clean and showed a reduced viral life span.

While we should not unduly play down the risk from surface transmission, the latest science has shifted dramatically to focus on transmission via airborne droplets resulting from something as simple as talking loudly or singing. This is starting to lead to design professionals rethinking airflow in buildings, considering physical barriers between workers, and even moving businesses – perhaps restaurants or hair salons – outside when possible. Conceivably, what may have been an acceptable design practice even a few months ago may not be acceptable now, and what is acceptable now may not be proper just months in the future.

The purpose of this article is not to be alarmist. Many aspects of building design are not affected by the pandemic, and pre-COVID-19 designs should continue to be compliant with the standard of care. However, it is incumbent on design professionals to remain well informed and up-to-date on how the design community at large is reacting and changing designs in response to the virus and the science of how the virus is spread.

It is also important, as always, for the design professional to understand the client’s needs, educate the client when appropriate on the requirements and limitations for designing to minimize COVID-19 transmission, and make sure that the design professional’s contract clearly spells out these requirements and limitations. For example, it may not be possible to achieve the energy efficiencies or comfort levels the client desires and at the same time provide the necessary increased ventilation to provide a safe environment. Likewise, the same square footage that a year ago would serve the number of people the client needs to accommodate is now woefully inadequate.

Finally, in times of uncertainty such as these, the design professional should make it clear to the client that what is being designed today as fully compliant with the standard of care may not be sufficient to meet the client’s needs based on what is learned in the future. The professional standard of care does not require design professionals to be clairvoyant, but to design to what is known in the community at the time. However, the uncertainty of the times themselves may inform the proper design and be a component of the standard of care. Thus, flexible designs that are able to adapt to quickly changing circumstances may be most appropriate as determined by the standard of care.

It may be years before design professionals are able to fully quantify the changes now being dictated in design by COVID-19, but the professional standard of care does not stand still, and design professionals must continue to be attentive to the varying practices in the community in order to stay compliant with the standard.

William (“Bill”) Ohle is a shareholder in the Portland office of Schwabe, Williamson & Wyatt. He represents businesses and design professionals in the real estate and construction industries. Contact him at 503-796-2414 or wohle@schwabe.com.

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The internet has been both a blessing and a curse to architects and engineers. Design businesses’ websites have evolved from clunky, text-heavy pages in the early days into visual artistic expressions of their own. For a potential client, a firm’s webpage often provides the first impression of a design company’s vision. Firms put a great deal of investment into their webpages, but website creation and maintenance eats away at valuable time for billable work, careful review of the pages’ content can often be passed over, and updates can get backlogged. This sometimes leads to inadvertent errors and potential regulatory penalties.

The statutes and regulations governing both architects and engineers, and administered by the Oregon Board of Architect Examiners and the Oregon Board of Examiners for Engineering and Land Surveying, contain broad codes of ethics that prohibit not just outright false advertising, but also advertising that might mislead the public. The most common website errors (excluding copyright and trademark issues, which are subjects for another day) include misidentifying a professional’s credentials, taking credit for projects designed by other professionals or firms, and unduly inflating the potential outcome of projects.

Correctly identifying a firm’s professionals and their licenses and qualifications may seem simple enough, but it is the most common of problems. With limited exceptions, the regulations do not allow the use of the title “architect” or “engineer” for unlicensed designers, draftspeople or clerks – even those in training who simply have not yet received their final certification. Titles become more problematic with interstate practices. Websites know no geographic boundaries. The simplest way to avoid problems is to identify in which states a professional is licensed along with his or her other credentials.

Misidentification goes further than just an individual’s qualifications. It can reach to the name of the firm as well. In Oregon, architectural firms, not just the individual architects, need to be registered with the board. The name of the firm must identify that it is practicing architecture, and it must accurately describe the firm’s practice. Unless your name is Frank Lloyd Wright, you cannot use that name in the firm title. If you call yourself a “Group” or “and Associates,” or simply the plural “architects,” there needs to be more than one licensed architect in the firm. And while there is no firm registration requirement for engineering firms, there is the general requirement for truthful statements by engineers that would extend to firm names.

Taking credit for another’s work also is a common problem, especially for startups. Often, the principals of new firms like to tout the work they had done earlier in their careers while working for others. The temptation is to pick the most impressive projects, but rarely were these new firm principals the professionals of record for such projects. The ethics rules for architects in particular require in such a case that the new firm principals not only accurately identify their own role in the project but also prominently identify the record professional on the webpage. As you can imagine, disputes arise over what “prominent” means, especially in the context of webpages – the size of font, the color of text, and whether the reader needs to scroll down to see the reference. Given that most people now view sites on their phone, how these issues play out is still evolving.

Another trending concern surrounds the use of photographs on webpages. It is quite common to use stock photos of city skylines or geographic features for emotional impact or local perspective on a webpage. However, if these pictures depict structures or even landscaping that is not the firm’s product, or at least not a project that the firm had a recognized involvement in, it could amount to false advertising and infringement on the true designer’s interests. Also, if the location of the project depicted is in a jurisdiction where the firm does not currently hold proper licenses, the picture alone could be seen as soliciting work in that jurisdiction and a violation of that jurisdiction’s licensing laws.

As for overpromising results, this has always been a balancing act. As building technologies advance, new materials become available, and tolerances for efficiency tighten, the desire to distinguish one’s product from the competition can lead to questionable claims. While in extreme cases this can lead to ethics in advertising violations, the largest risk is more common defect litigation.

In either case, it is important to accurately describe realistic expectations. The more experimental the design, the greater the need for a detailed description of the project objectives and limitations. Pretty pictures on a website do not mean that a particular design will work at a particular location, and while an explanation of such an obvious point may not necessarily be printed on the firm’s webpage, it would be a good idea to bring it up in follow-up communications with a potential new client who may have gotten the wrong idea from the depictions on the website.

Firm webpages are a necessity, and all clients and potential clients expect architects and engineers to have a web presence. While impressive graphics, movement and project depictions may be the most alluring aspects of a design firm’s website, it is important that the website remain accurate and avoid misconstruing both the qualifications and the experience of the firm’s personnel. Misrepresentations can lead to both defect claims and regulatory penalties.

William (“Bill”) Ohle is a shareholder in the Portland office of Schwabe, Williamson & Wyatt. He represents business and design professionals in the real estate and construction industries. Contact him at 503-796-2414 or wohle@schwabe.com.

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Standard form construction contracts are ubiquitous in the industry and for good reason. They are cost-effective, the terms have been vetted over years of drafting and redrafting – and through court challenges – and most property owners, design professionals and contractors understand the agreement terms, or at least how the terms operate in the day-to-day realities of a construction project.

While a number of different organizations offer such form contracts, they all serve the same basic function: providing an off-the-shelf form with many useful clauses that can be modified for use on specific projects. The American Institute of Architects (AIA), ConsensusDocs, Design Build Institute of America (DBIA) and Engineers Joint Contract Documents Committee publish the most common forms used in the United States, while the International Federation of Consulting Engineers (FIDIC) and the International Chamber of Commerce (ICC) offer forms that often are used for international projects.

In addition, many government agencies either draft their own standardized contract forms or adapt published forms, such as the AIA forms, for the agencies’ specific use. While government contract forms often become creatures of the unique laws applicable to public projects, agencies and the designers and contractors that do business with them can benefit from standardization, which makes review of the agreement and the understanding of risk allocation much easier to process and work under.

And while these forms offer many advantages, the key is to use them correctly. The forms usually have specified functions defined by the parties, the delivery method and the payment method. Examples include: owner/architect, owner/engineer or owner/general contractor agreements; design-bid-build, CM/GC or design/build delivery; and lump sum price or guaranteed maximum price payment. The forms can also vary in complexity, with many publishers providing forms for small projects, projects of limited scope (such as tenant improvements or remodel) and even forms with specific environmental or sustainability goals. Publishers often also draft forms in a series that are meant to work together. Mixing and matching incompatible forms, failing to review the automatically incorporated additional documents, and simply using the wrong form for the parties or project involved can sow chaos should anything go wrong.

Some common mistakes I have seen include:

1. General contractors failing to use subcontractor agreements that are compatible with the language of the standard forms and that pass through the required obligations, such as insurance limits, adding additional insureds and requiring consolidated arbitration (or using no written subcontractor agreements at all). This puts the general contractor in breach of the owner agreement before construction even starts.
2. Making major modifications to a standard form, such as the AIA A101 (standard form agreement between owner and contractor), without making any needed revisions to the incorporated documents, such as the General Conditions of the A201.
3. Simply using the wrong form, such as hiring a structural engineer using an architect’s contract form without changing the standard scope of work. This makes the engineer, at least technically, responsible for the architect’s management of construction.

The key to using a standard form is to use the right form for the right job, making sure that it is modified as required by the law of the state where the project is located. The more complex the project, or the more expensive, the more important it is to review and customize the forms to fit the needs of the job. It is also important to keep the forms up to date. Most standard forms go through significant rewrites every 10 years, but even in the interim laws change and clauses may become unenforceable or worse and can subject a party to unforeseen liability.

And, even though standard language forms are often very thorough, that does not mean they cannot be improved upon given the nature of a project. Given the complexity and specialization of many new buildings, designers and contractors must often rely on specialty trades or products and sometimes in novel and untested ways. Building owners and developers may be willing to take the risk on “new” building designs or materials in order to be on the cutting edge. In those situations, the standard allocations of risk in form contracts may not reflect who should be bearing the liability should something go wrong with the next big thing, and protective clauses and carve-outs should be added to the standard form.

That said, any modification to the standard language of a form should be closely scrutinized. The benefits of industry standard language used in many form contracts are that the meaning of the language is well understood, not only by the parties to the contracts but also subcontractors, materials suppliers, manufacturers and even insurance companies. On this last point, it is very important to review changes to the standard language in form contracts from the point of insurability. Changes to the standard of care, especially regarding the performance of design professionals, could render certain contract clauses uninsurable, which rarely if ever benefits any party to the contract.

Standard form contracts can save time and money, but should be reviewed periodically by a legal professional and read carefully in the context of each project to make sure the right form is being used, with the needed modifications, and that all of the agreements within a given project are consistent with each other.

William (“Bill”) Ohle is a shareholder in the Portland office of Schwabe, Williamson & Wyatt. He represents business and design professionals in the construction industry. Contact him at 503-796-2414 or wohle@schwabe.com.

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The promise of the “paperless office” is a bust. In reality, the ease by which documents are created has caused files to explode in volume, both in paper and in electronic format. And since those documents are easily disseminated, multiple copies of the same report or email clog file folders, bankers boxes and hard drives and result in steep storage costs. Documents are not limited to words on paper, but include any recorded data such as voice messages, photographs and even text messages.

However, once a document exists, getting rid of it always carries a risk. Remember, a cover-up – or the appearance of a cover-up – is often worse than the crime. In the case of construction projects, this can translate into the appearance of responsibility or fault for construction defects or hamper a firm’s ability to defend itself.

What is one to do? This is where a thoughtful document retention policy comes into play. To be blunt, every player in a construction project – that is, architect, engineer, contractor, subcontractor and owner – should have a written policy of which documents to keep and for how long. Then they should follow that policy. No one document retention policy fits all businesses, but a standard policy spells out which documents should be created, how they should be categorized and how long they should be kept.

Document retention

The first category is which documents should be created. This may sound a little strange for a “retention” policy, but you do not need to worry about keeping a document that is never created in the first place. What this generally means is: do not create an unnecessary paper trail, or worse, a damaging paper trial. There is nothing like sifting through 100,000 emails just to find the important ones, and then running across those written at 3 a.m. using language appropriate only for cable TV.

Document categories

The categorization of documents is important for determining where and for how long they should be kept. There are many statutes and regulations that govern how long many documents should be kept, and they may be different from state to state. Contracts between parties may also dictate how long various types of documents need to be kept, and possibly which format (electronic or paper). Your friendly lawyer may also recommend that certain documents be kept depending on the applicable time limitation for bringing a legal action. This again will vary from state to state and may depend on the type of project and whom the project is with. In Oregon, limitation periods vary depending on whether the project is small or residential or large or commercial. Further, in some states and in many instances, limitation periods do not run against governmental entities. So construction documents for government projects should likely be held for longer periods of time.

Document destruction

When the time comes to destroy documents, it should be done following the routine set out in the policy. Courts have recognized the legitimate need to eventually dispose of old documents and that following a reasonable and routine policy does not carry with it negative implications. However, and there is always a catch, once there is a reasonable likelihood that litigation may ensue, the document retention policy should include what is known as a “litigation hold.” No documents related to prospective or pending litigation should be destroyed, even if the policy would otherwise dictate destruction. The consequences for disposing of documents once there is a reasonable anticipation of litigation can be severe, ranging from the dismissal of claims or the baring of defenses all the way to criminal sanctions.

Document retention policies serve an extremely important function, and they will only become more important given the ever increasing amount of information involved in any modern construction project. No business should be left without one.

Bill Ohle is a shareholder in the Portland office of Schwabe, Williamson & Wyatt. He represents business and design professionals in the construction industry. Contact him at 503-796-2414 or wohle@schwabe.com.

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