Highlights of Revised Owner-Architect Agreements

By John S. Mrowiec

As we noted last month, the American Institute of Architects has issued the 2007 edition of its Owner-Architect Agreements (B101-105 (formerly B141 and B151)), Owner-Contractor Agreements (A101, A102 (formerly A111) and A102 (formerly A114)) and the A201 General Conditions of the Contract for Construction (2007 ed.). This month, we discuss some of the changes in the 2007 editions of the Owner-Architect Agreements.

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Numbering System Changed

The AIA has changed its numbering system. Rather than numbering its primary Owner-Architect Agreements B151 and B141 as in the past, the numbering and usage is now B101, B102 (Without a Predefined Scope of Architect’s Services), B103 (Large/Complex Projects), B104 (Project of Limited Scope) and B105 (Small Project).

In this new format, B101 is a one-part document with Exhibit A listing “Initial Information.” It is closest in format to B151-1997.

B102 is closest to the B141, Part 1-1997. B102 is designed to be used with a second part to define the scope of services. The 2007 editions provide 11 scope-document selections for use with B102.

Agreement form B103, for Large/Complex Projects, somewhat resembles the B151-1997 edition but now contains provisions regarding owner retention of cost and scheduling consultants and the option to pursue the fast-track approach to design and construction. For ease of reference, this article’s citation to agreement provisions is to the new B101 as compared to the B151 (1997 ed.).

Changes to Provisions

Space limitations prevent a complete discussion of all the 2007 Owner-Architect Agreement changes. We will focus on the changes to provisions regarding insurance, the architect’s standard of care, green design, rights to use architect’s workproduct and disputes.

Insurance: The agreement now contains blanks in Section 2.5 to provide information regarding limits and coverages for the architect’s insurance under general liability, automobile liability, workers’ compensation and, most notably, professional liability. B101 also adds, “If any of the [insurance] requirements set forth below exceed the types and limits the Architect normally maintains, the Owner shall reimburse the Architect for any additional cost.”

Architect’s Standard of Care: Not all of an architect’s alleged failures give rise to liability. The law does not usually require architects to be perfect.

The “standard of care” is the basis that courts use to determine whether the architect’s alleged failure to perform legally will constitute a breach of the agreement. The “standard of care” will vary depending on how high the standard is defined in the agreement.

The higher the “standard of care,” the more likely a particular architect failure will be held to constitute a breach. If not defined, standards of care may vary by locality or by type of project.

The B151-1997 did not define the standard of care but only defined the level of timeliness of the architect’s services.

By contrast, the new B101 not only defines the timeliness of architect’s services but also defines the “standard of care” under 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.”

Green Design Addressed

Green Design: An entirely new concept integrated into the Agreement in 2007 is “environmentally responsible design alternatives,” popularly called green design.

Clause 3.2.5.1 of the B101 provides that the “Architect shall consider” these alternatives “such as material choices and building orientation.”

However, the architect’s consideration is not in a vacuum; the green design alternatives are considered “together with other considerations based on program and aesthetics, in developing a design that is consistent with the Owner’s program, schedule and budget.”

The Agreement also contemplates that the owner may engage the architect to perform “other responsible design services” under Article 4’s Additional Services provisions.

Instruments of Service: Under prior editions of the Owner-Architect Agreement, the architect granted the owner a nonexclusive right to reproduce the architect’s instruments of service solely for purposes of “constructing, using and maintaining the Project.” That license terminated upon “[a]ny termination of this Agreement prior to completion of the Project.” In order for the owner to use the architect’s instruments of service after termination, the architect first had to be “adjudged in default of this Agreement” B151, §6.2 (1997 ed.).

In the new agreement, the owner’s license to use extends to “altering and adding to” the project and continues to exist “provided that the Owner substantially performs its obligations, including prompt payment of all sums when due, under this Agreement.”

Now, the owner’s license does not end on “any termination,” but only if the “Architect rightfully terminates this Agreement for cause as provided in Section 9.4” B101, §7.3 (2007 ed.). Unless after “Owner rightfully terminates the Agreement for cause under Section 9.4,” the owner continues to use the instruments of service “without retaining the author,” the owner “releases the Architect and Architect’s consultant(s) from such uses and agrees to indemnify and hold the Architect and consultants harmless” B101, §7.3.1 (2007 ed.).

Dispute Resolution: The dispute resolution provisions of the AIA documents have been revised substantially for 2007.

If the owner and contractor choose someone other than in the Owner-Contractor Agreement, the architect might not be the initial decision maker on claims. To conform that change between the two documents, Clause 3.6.2.5 of the B101 provides that the architect shall render initial decision on claims between the owner and contractor “[[u]nless the Owner and Contractor designate another person to serve as an Initial Decision Maker.”

Just like the 2007 change to the Owner-Contractor Agreements, Section 8.2.4 of the B101 provides that arbitration is no longer the required dispute resolution mechanism, but merely one option for disputes between owner and architect. If arbitration is selected, consolidation is permitted as long as the other agreement permits consolidation, the arbitrations substantially involve common questions of law or fact and employ materially similar procedural rules and methods for selecting arbitrators, Clause 8.3.4.1 (2007 ed.).