Construction Law

AIA plans change to Statute of Limitations provisions

By Werner Sabo

The AIA is planning to release a revised version of the major  AIA documents (General Conditions, Owner-Architect agreements, etc.) this fall. For a number of months, draft versions have been distributed to various groups for comment. It appears that the AIA, in an apparent effort to make the documents more owner-friendly, will be drastically revising the provisions relating to the state of limitations.

In the current version of A201 (Section 13.7), as well as B141 and B151, the documents set the accrual date of the applicable statute of limitations as the date of Substantial Completion. This means that, whether or not a problem has been discovered, the statute of limitations starts on that date and terminates on a date certain, depending on what that state's laws are. Without this provision, most states have a statute of repose and "discovery" rules that permit a party to "discover" a latent defect years after substantial completion and the statute of limitations doesn't even begin to run until this discovery. This means that the architect and contractor are open to a lawsuit by an owner many years after the project is completed.

With the latest draft of A201, this provision is completely removed, making this decidedly unfriendly for contractors. Likewise, the latest draft of one of the new owner-architect agreements substantially alters this provision, resulting in a substantial increase in the time that the architect is exposed to liability.

This is not some idle exercise. A number of lawsuits have been won at an early stage by architects and contractors based on this statute of limitations language in the AIA documents, even though the owner argued that there was a latent defect that was not discoverable until much later. The proposed changes will make dismissal of such lawsuits much more difficult.

It is, of course, possible that the AIA will change their position before the documents are formally published later in 2007. This is unlikely to occur unless architects and contractors make it known to the AIA that they are unhappy with this change.

Full post as published by Construction Attorney Blog on March 15, 2007 (boomark / email).