How to manage risk and achieve sustainable design goals at the same time

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An architecture risk management expert weighs in on how design firms can build high-performance buildings and limit problems throughout all project phases.  

The increasing emphasis on sustainability and high-performance buildings presents not only growing opportunities for design professionals, but also emerging risks. No matter how skilled and knowledgeable architects may be, there are some exposures that remain beyond their control. Clients, lenders, brokers, and even end users can sometimes develop unrealistic expectations of how a building should perform and its ability to receive a sustainability certification.

Though building product performance and many aspects of certification often fall outside the design firm’s purview, architects are in a prime position to advise, employing strong risk management practices and providing design solutions that focus on environmental need. Here are the top things architects are responsible for and should discuss with clients so they can manage risk when designing for sustainability:

Setting expectations and utilizing contracts effectively

The most important factor in preventing claims based on the underperformance of a sustainable design is that all parties involved understand, and acknowledge in writing, the inherent risks with such a project, the factors that make the outcome unpredictable, and the limits and responsibilities of each stakeholder to manage risks. Establishing reasonable expectations at the beginning of the project is vital. One way to avoid unreasonable contractual provisions and unrealistic expectations is by informing the client that design services are recommendations that the client has to understand and, once satisfied, accept.

When drafting the contract for professional services, provisions should be included that limit the design professional’s risk, or, at a minimum, express the client’s acknowledgement that not all attributes of a sustainability program are within the design firm’s control. Contractual provisions such as disclaimers and other exculpatory language need to be worded carefully and should be drafted with the assistance of local legal counsel. This is especially true when the provisions include any waiver of claims, requirements for a legal defense, or the indemnification of costs.

It is essential to avoid language or actions that could be construed to establish a warranty of service or results. At the same time, including contractual provisions that are clear on the role of the design firm is critical. The following are two examples of contractual communication tools that can lead to a client’s “informed consent.”

Meeting specific sustainability criteria and educating the client

Once the client has made design firm aware that they wants a specific level of sustainability incorporated into a project, the firm shall use the standards published by specific design guidelines or certification standard, designing the project with the intention of meeting those requirements.

It’s critical that the design firm makes the client aware that a project designed to meet a specific sustainability standard might not perform as designed because of the construction, operation, and maintenance of the project. The client should agree that it shall bring no claim against design firm if the project does not perform as intended, unless the negligence of the firm is the sole cause of the performance deficiency.

The design firm is responsible for using professional judgment in the selection of materials, products, and systems for the project, but clients should understand that the firm cannot and does not warrant the performance of any specified material, product, or system. Should performance not meet the client’s expectations, they must acknowledge that they will look solely to the manufacturer, supplier, or installer of materials, products, or systems.

Limiting risk in the pursuit of third-party certifications

If a client intends to pursue specific certification standard for a project, the design firm shall research the applicable certification requirements and design the project  with the intention of meeting the requirements. The firm will also document the design of the project so the client can submit necessary paperwork to the certifying organization. At this point, it’s important that the client recognizes that certification is not based on design alone. Certification also depends on the construction, operation, and maintenance of the project and the client should agree that it shall bring no claim against the design firm if the project is not certified as intended, unless the negligence of the firm is the sole cause of the project not being certified.

Victor O. Schinnerer & Company, Inc. and CNA work with the AIA Trust to offer AIA members quality risk management coverage through the AIA Trust Professional Liability Insurance Program, Business Owners Program, and Cyber Liability Insurance program to address the challenges that architects face today and in the future. Detailed information about both these programs may be found on the AIA Trust website. Plus: read about the impact of green design on the standard of care.

A different version of this article originally appeared in the March 2019 issue of the AIA Project Management Knowledge Community’s PM Digest.

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