In recent years there has been a trend in the U.S. Courts that despite common law and/or contractual indemnities, a developer/owner of property cannot seek indemnification and/or contribution from its architect if the building, as designed and built, is not compliant with the ADA or the FHA. This is a troubling development as owners rely on their professionals to design a building that is compliant with law. To suddenly tell an owner, that even despite a contractual indemnity from its architect, the owner will remain liable without recourse against others for such violations, is causing much debate and concern.
The courts’ findings have been based on two primary principles. The courts have held that the purpose of the ADA and FHA are to compel owners to build and maintain spaces that are compliant with law for disabled persons. If an owner is able to insulate itself from that responsibility, by delegating the duty to its architect, it would defeat the purpose of the statutes by diminishing the incentive of owners to ensure compliance. Any state laws which would allow for such delegation through indemnification are preempted by these Federal laws. Further, the Courts have held that if indemnification or contribution for these claims was intended by the legislature, such relief would have been written into the statutes. In light of the absence of such relief, the courts have declined to engraft a judicial remedy.
There may be some glimmer of hope for owners, as the courts have held that the attempt to shift 100% of the liability to the architect through an indemnification claim is not permitted, but that partial indemnification or contribution is not ruled out. Also, the courts have also said that the architects, builders, among others, are “within ADA’s broad sweep of liability” meaning that “non-owner” direct claims against the architect or other parties can result in shared liability for non-compliance.
What will remain critical for owners is to have properly drafted contracts with architects, backed by adequate and appropriate insurance covering the architect’s services. It is also important for developers and owners to retain a peer review and/or third party ADA/FHA compliance expert to review the design of the architect for compliance with the law. It will save time and money to know before the design is too far along and/or construction is commenced, if the design is not compliant.
It is unclear how this trend will play out as more courts and jurisdictions hear these cases and issues. Greenberg, Trager & Herbst, LLP will be following this progress and can help you to navigate this significant issue.