When Negotiating an Architect’s Agreement, Ensuring that an Owner is Protected in the Event of an Early Termination is Imperative

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When Negotiating an Architect’s Agreement, Ensuring that an Owner is Protected in the Event of an Early Termination is Imperative

On Behalf of Greenberg, Trager & Herbst, LLP | Jul 2, 2014 | Design Professional Agreements, Project Management |

On some projects, conflicts arise between an owner and its various design professionals, including its architect. Should an owner opt to terminate its architect, the parties’ rights will be dictated by their agreement. Therefore, an owner should be mindful of the following when negotiating such an agreement.

Documents prepared by the architect, including drawings and specifications, generally remain the property of the architect, unless dealt with differently in the agreement. If ownership is to remain with the architect, the owner should negotiate a perpetual license to use and reproduce the architect’s instruments of service in connection with the project, even after the architect is no longer engaged; therefore, the owner will be able to proceed with the construction of its project. This can become complicated depending on when the architect is terminated and what level of drawings it has designed as of that time. An architect may insist that its name be removed from drawings and/or that its name not be used in marketing of the project. These issues should be addressed in the agreement.

The owner should confirm the architect’s agreement provides that the owner’s obligation to make payment is for services properly rendered pursuant to the agreement up to the time of termination. Otherwise, the architect may seek to prevent the owner from using its instruments of service until the architect is paid for all sums due under the agreement regardless of whether those services were performed at all or performed properly.

The owner also should be sure to include language in the agreement that the architect will cooperate in the transition to a new architect, including the withdrawal as the architect of record for project filings with the Department of Buildings.

We are available to work with our clients in negotiating architect’s agreements and settlement agreements with architects consistent with the foregoing.