Thursday, January 27, 2022, at DRI Construction Law Seminar in Austin, TX – Recent events and tragedies have drawn a harsh spotlight onto America’s aging structures and infrastructure. A panel of experts will discuss the likely implications over the next decade, such as expanded third-party liability, greater regulation and government oversight, and the importance of maintaining structures.
Joshua W. Mermis, West Mermis, Houston, TX
America’s infrastructure is aging. Owners now more than ever are concerned about the condition of their buildings, roads, and bridges. Recent high-profile collapses of bridges and condominiums have crystalized the horrific and potentially deadly consequences of deferred maintenance and inattention. Moreover, lenders who are refinancing these structures and governmental entities recertifying their integrity are subjecting them to more scrutiny. But time and again these parties are running into a predictable problem: missing project files.
Despite certain requirements placed on architects to retain design drawings, those requirements may demand a 5- or 10-year retention. But often the structure in question is much older than 10 years. Moreover, the project close-out file has been misplaced by the owner or archived in an antiquated software that makes accessing it exceedingly difficult. It is frequently the owners who are looking for this information, but they are ill-equipped to archive such information. Construction is not their core business, and the importance of the project close-out file is often lost on them.
But when the project-close out file becomes important and necessary, it falls upon the forensic engineers to search through public records or embark on time consuming searches to obtain the necessary information. Not only is this tedious and costly for the owner, but it also often results in a “dry hole.” It makes everyone’s job much more difficult. Sadly, this all-too-familiar scenario could have been avoided by some forethought and planning.
From a legal perspective, aging infrastructure leads to claims for money. Whether the owner is put in a position to defend itself against someone who was hurt by an aging building or if it is the owner looking to remedy a latent construction defect, the owner is squarely in the middle of the dispute because it owns the building. But the owner did not construct the building. Inevitably, an owner looks to the contractor and the architect when claims arise.
It is the owner’s burden to prove its claims against the potentially negligent contractor and architect. But that burden is often difficult to meet if the owner does not have the project file. Without the project file, the owner does not have a clear picture of the design drawings, the design intent, the contractual obligations, and the communications between the parties prior to, during, and after the project. And this lack of information puts the owner’s attorneys and consultants at a distinct disadvantage. They can’t do their job because they don’t have the necessary evidence. Again, this could have been avoided by some forethought and planning.
So, how does an owner avoid this all-too-common fate? It is imperative that the owner archive its project close-out documents. Ideally, the owner archives the project close-out file in such a way that it is readily accessible to the owner, the owner’s lawyers, and consultants. An ounce of prevention is worth a pound of cure, and the owner that invests in the archiving of its project file will save itself time and money in the future.
Joshua Mermis and Owner Insite CEO Steve Harper discuss trends and pitfalls in construction in the most recent episode of the Owner Insite Construction Podcast: Litigation and Construction: What Owners Need to Know to Protect Themselves.
In addition to discussing challenges faced by owners throughout a project, Joshua and Steve also examine what owners can do to protect themselves at the start of a project and identify tools they can use to prepare themselves for the post-project unknowns. For more information, visit Owner Insite’s Blog Article.
Contingent payment clauses, known as Pay-if-paid provisions, are often found in contracts between general contractors and subcontractors....
What you don’t know about retainage, and the recent changes to retainage by the Texas legislature, could be a problem. West Mermis examin...