Design Professionals’ Duties To Third Party Purchasers and Homeowners Associations Expanded

By May 10, 2013 October 25th, 2018 Construction Litigation Blog, Iman Reza

Iman Reza

It used to be pretty simple. A design professional, such as an architect, had very limited duties to a third party purchaser of a home or a homeowners association (HOA).  However, following a recent California appellate decision, that may no longer be the case.  In its decision, the court recently expanded those duties.  In Beacon Residential Community Association. v. Skidmore, Owings & Merrill, LLP, the Court held that architects may be held liable to condominium owners for negligently prepared plans.

In Beacon, a community an HOA filed a construction defect suit against several builders including and the condominium project’s architect. The architect filed a motion to dismiss, arguing he owed no duty to the association or its members. 

The Appellant Court held that the policy of preventing future harm to third parties “weighs heavily in favor of recognizing liability.” The Court also held that unlike contractors, buyers do not have the ability to allocate liability by contract or insurance. The Court emphasized that a design professional’s performance must “meet the requisite standard of care.”

This ruling is significant because a design professional can now be held liable to third party purchasers and HOAs even when the architect did not control the project.  Perhaps the most significant result from this case may be the cost of insurance for architects.  Condominium complexes and HOAs are often the target for construction defect suits.  The statute of limitations for these types of cases are ten years. Until this case, architects had little or no exposure from those suits.  Now they do, and their exposure can be up to ten years from the date the project is completed. It may also effect the contractual relationship between architect and builder.