31 May 2016
The paper below was written by Orla Hegarty MRIAI who has given permission for it to be published by the BRegs Blog, which welcomes further such reactions and advice about ongoing implementation problems with the Building Control System and Construction Contracts following last week’s post: FURTHER ALERT | CIF + RIAI Contracts. The original paper is available at this link HERE)
A summary of the paper is below:
Building Control (Amendment) Regulations & Construction Contracts
Advice for Architects
A building contract is a commercial agreement between your client (the Employer) and a builder (the Contractor). As architect, you are not a party to this contract, although you may have duties and powers as contract administrator.
In your role as architect, your client relies on you as their professional advisor, an expert who is well placed to protect their interests. Throughout the project, you role is to advise about design, specification, procurement, contracts, statutory requirements, budgeting and more. When the design is complete, your client relies on your knowledge of the construction industry, your ability to manage the contractual arrangements, anticipate the risks and control payments. You owe your client a duty of care and you could be found negligent if you fail in this duty. If you give inadequate advice, don’t alert them to risks or expose them to unanticipated costs you could be liable.
You may also have duties under Building Control legislation, as do the certifiers and the builder. Under the Building Control (Amendment) Regulations, BC(A)R, there are a very limited number of obligations on the builder. In summary, he must:
- Sign an Undertaking for the Commencement Notice
- Ensure that he only builds works, including variations, covered by a Design Certificate lodged on BCMS (Building Control Management System)
- Build in accordance with the Building Regulations
- Sign the Completion Certificate.
The industry response to these shortcomings of the BC(A)R regulations has been to change construction contracts and commercial arrangements to fill the gaps. By embedding statutory procedures in commercial contracts, this approach attempts to link certification to payment. This is not a statutory obligation under BC(A)R.
Therefore, if you don’t put in place contractual mechanisms for BC(A)R and later make demands on the contractors, your client may be liable for a claim. Furthermore, if you withhold a payment without a contract provision you may trigger suspension or adjudication under the Construction Contracts Act (for contracts from 25 July 2016).
This means that you cannot rely on a general reference to building control legislation to require a builder to do tasks beyond the limited BC(A)R obligations; you must include specific requirements in your tender and write them into your contracts. In order to make this effective, you may need to tie your BC(A)R requirements into payments so that the contract administrator can withhold payment if necessary. Otherwise, the Assigned Certifier’s only power is to withhold the Certificate of Completion, at which point the entire project may have been put at significant risk.
The BC(A)R regulations don’t give statutory powers to certifiers and certifiers are invisible in the standard building contracts, unless you provide for it. This means, for example, if you want to ensure:
- that the Design Certifier and Assigned Certifier are allowed onto the building site,
- that the builder gives an Undertaking to co-operate with the certifiers,
- that certain inspections and notifications are requirements in the contract,
- that contractor and sub-contractor Design Certificates are provided, where required, during the course of the contract, and in good time,
- that samples, tests, records, interim BC(A)R certificates and Ancillary Certificates are provided, where required, and in the right format and at the right time,
- that non-compliant works can be rejected in a timely manner,
- that there is a mechanism to withhold payment,
- that you have a workable plan for phasing and Practical Completion;
then you must set these out in the contract. Any contract changes must be written carefully to be legally robust and enforceable, and contract drafting should not be done without legal advice. By anticipating and mitigating these risks you can limit your client’s exposure to contract claims, delays, disputes and cost over-runs. Where possible, be precise about your requirements before you tender so that the builder can quantify the costs with certainty or fix a rate for BC(A)R variations.
You also need to be very clear about the roles and responsibilities of each of the players, particularly where one individual is carrying out several roles. For example, if you respond to a builder’s proposal to change a specification, are you acting as the Design Certifier (‘I stand over your design as compliant’), or as the contract administrator (‘I will adjust the contract and certify payment’) or as the architect (‘I will ask my client if he approves this’). The implications are significantly different. Consequently, you must ensure that you and the others on your team only act within their defined roles, particularly where contract variations could arise.
Where there is on-going uncertainty in the industry and the information available is inadequate, your client is at a significant risk that legitimate claims will arise over vague tender requirements and poorly drafted contracts or from the actions of a professional acting outside their powers. These are all areas where you have an evident duty of care to protect their interests and where you must guide your client to steer a careful course. Where appropriate, it is advisable to recommend adequate contingencies in time and money to accommodate these uncertainties.
In these circumstances, honesty is the best policy: Write to your client to advise them of the situation, set out the information available, give a professional assessment of the risks and advise them to get legal advice before tendering and entering into a contract. If your client decides that drafting their own contract is not feasible, that requiring BC(A)R certificates for every stage payment is impractical, or that delaying Practical Completion for validation is expensive, then let your client make an informed decision and record it in writing.
PDF download of paper: BC(AR) & Construction Contracts, Advice for Architects UCD APEP May2016
Orla Hegarty B.Arch. MRIAI RIBA who is an Assistant Professor and Course Director for the Professional Diploma (Architecture) at the School of Architecture, Planning and Development Policy, UCD.
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