Note: This is the Fifth and final part of a five-part series covering the subject of roof leaks and what you can do when you get one. The first three articles focused on preventing construction defects. The last two articles are focused on remediating the effects of a leaky roof including whether or not you may be able to get the architect or contractor to pay for the repairs. (Here’s a hint. The statute of limitations for most school district construction defect claims is 10 years.)
You sent notice about your leaky roof to the contractor and the architect. They told you that it would be remedied. It wasn’t. You sent notice again and this time they came out and did some work but it did not fix the problem. The roof still leaks. What do you do? For the purposes of this article we will assume that your leak is severe and pervasive, that it is causing damage to the work, and that your contractors have been non-responsive. Self-help can be an option, withholding payment can be an option, and termination can be an option as well.
Before taking any course of action, however, you need to know how to do it in a procedurally appropriate manner so that you will not have to pay for these repairs in the end. It has to be said, before going forward, that you need to understand that your procedural requirements are set out in your contract documents. This means that each of you may have a different set of procedural requirements than those I am about to discuss. For this reason, it is important for you to contact your attorney so that he or she can help you to navigate these tricky scenarios.
Self-Help
Sometimes self-help can be as simple as placing a bucket underneath a drip to protect carpet while you are awaiting your repairs. In this case, the only thing you need to remember is to document, take pictures, and provide notice to the architect and engineer.
In more extreme circumstances the District may have to take more invasive and costly action. If the circumstance is that the contractor has failed to perform the work in accordance with the contract documents, what do you do? First, as always, you give notice. You can accomplish this by following the outline set forth in part 3 of this series. In the notice you will give some amount of time to remedy the defect. The standard AIA A201 set of general conditions sets this time as seven days from the date the contractor receives written notice of the defect. The A201 then prescribes a second notice period. If the contractor then fails to make the repairs, the owner will typically have the right to correct the deficiencies.
If you do commence the repairs, it is then appropriate for the architect to issue a change order reducing the amount owed to the contractor by the amount expended by the district to make the repairs. Because you will be seeking reimbursement, it is very important that the district keep accurate records of the amounts it is expending to make the repairs. Because of the nature of the dispute, it is very likely that you will have to prove the precise amounts you claim to have incurred.
Withholding Payment
To many, withholding seems like an attractive option when faced with an underperforming contractor. If you don’t have the support of your architect, however, withholding payment can be dangerous. It bears repeating. If you are seeking to withhold payment, consult your attorney first. I realize that it is disheartening to keep pouring money into a black hole when you are not satisfied with the workmanship, but if this is happening to you, you need the help of your attorney.
As an Owner, one of your primary duties is to pay money. In most contract documents you pay the money only after your architect certifies payment. The typical contract term for making payment is going to require you to make the payment if the architect certifies it. In some cases, withholding payment after your architect has certified payment may be a breach of your duties under the contract. If you breach your contract you run the risk of being sued for breach of contract, being sued under the prompt payment act, and possibly having your performance bond cancelled.
If you feel as though your architect has certified payment for improper or unperformed work, you need to raise this issue with the architect. Again you need to document your concerns and bring it to his or her attention that they have improperly certified payment for the project. In most cases, your contract will allow the architect to then make deductions from future pay applications in an amount that is equal to the cost of the unperformed work or the cost of repairing defective or deficient work. To know for sure, check your contracts and address this issue with your attorney.
Termination
Let’s say your board has had it up to here with the contractor. At the meeting one of the board members makes a motion. “I move that we terminate this lousy contractor.” Don’t do it unless you’ve talked to your attorney about the proper procedures for terminating the contract. Most contracts require that you provide notice of your intent to terminate and an amount of time for the contractor to comply with the terms of the contract. If there is a bond involved and you expect the bonding company to perform under that bond you need to pay close attention to the termination provisions. Failing to do so may result in your losing the bond.
Summary
Most school administrators are familiar with Chapter 21 of the Texas Education Code and the provisions therein that control the substantive and procedural aspects of ending the employment relationship. Construction contracts are no less complicated. While the procedures are normally simple and straightforward they are not always intuitive. You can only know if you are doing the right thing if you know what your contracts say. Your attorney can help you to avoid making mistakes that both you and your district may regret down the line.
This is the last of the “Avoiding the Leaky Roof” series. On July 19, 2007 we will provide a live training in Austin just a day before the Equity Center conference is to begin. At the training Steve Patterson of Roof Technical Services Inc. will present for approximately 2 hours on roofing options in order to help you and your board better understand what’s out there so that you can engage in smart design discussions with your architects and engineers for future projects. I will conduct the second part of the training which will deal with the issue of what to do to avoid the leaky roof from being constructed in the first place and what to do if you’ve already got one.
What's New
Avoiding the Leaky Roof and What To Do When You Get One
July 19, 2007
The problem with roofing systems and construction in general is that we don't know what we don't know. This training will give you the foundation you need to ask the right questions of your design professionals. We will provide you with information concerning your course of action in case of a roof failure. You will also learn how to properly document construction defects or suspected defects.
Our presenters for this sessions are David Hansen, pioneer in the area of preventive construction law and Steve Patterson, PE, CPRC, RRC of Roof Technical Services, licensed professional engineer and certified professional roofing consultant with 30 years experience.
Visit www.edlaw.com for more information and to register online.
Summer School Webinars
June & August 2007
Visit www.edlaw.com for more information and to register online.
Schwartz & Eichelbaum, P.C. and TASPA
jointly present
A Tropical Summer Personnel Law Conference
July 11, 2007
Austin Doubletree Hotel, Austin, TX
Visit www.taspa.org to register.
Seventh Annual
Schwartz & Eichelbaum, P.C. and the Equity Center
Seminar on School Finance and Legal Issues
July 20-21, 2007
Austin Marriott North
Round Rock, TX
Visit www.edlaw.com to register.
