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AIA Owner/Architect and Owner/General Contract Forms - Beware of Arbitration Glitch

By Alan E. Tannenbaum

AIA contract forms are popular for major community association repair contracts. Unfortunately, the AIA (American Institute of Architects), presumeably to shield architects from liability, long ago created an arbitration glitch in instances where the Owner/Architect and Owner/General Contractor Contract forms are being utilized for a given project. The glitch is that the Owner/Architect form prohibits the architect (absent the architect's agreement) from being joined in an arbitration proceeding between the owner and general contractor.

Where defects in the work are a result of both design and construction flaws, this glitch can create a major dispute resolution headache.

The owner is forced (absent the architect's agreement) to file separate arbitrations against the general contractor and architect. The general contractor in the one arbitration can attempt to deflect responsibility by blaming the design. The architect in the other arbitration can attempt to deflect responsibility by blaming the construction. Not only is this a very expensive proposition, but the worse case scenario is that both arbitration panels buy the defense arguments, with one walking the general contractor while pinning the blame on the design while the other walks the architect pinning the blame on the general contractor.

Word to the wise, if you use both the AIA owner/architect and owner/general contractor forms, insert provisions in each providing for a joint arbitration of all disputes involving both the design and construction teams. This should include sub-designers (engineers) and subcontractors. Better yet, consider scrapping the arbitration clauses entirely. . . More on this in upcoming blogs.

Full post as published by Florida Community Association Construction Law Blog on December 30, 2008 (boomark / email).