engineering survey for condo conversion 3

[smwpe]

A client wants us to evaluate the condition of an aparment complex and certify the current condition, estimated life and cost to renovate the structural, mechanical and electrical components. The purpose of the evaluation is to submit an application to the State authority to convert the apartment complex to a condominium. We know that most of the architects and engineers won't tackle this because of the liability involved due to the tendancy of condumium boards to sue at the drop of a hat.

Our question is how much should we charge for this service.

Thank you all in advance for sharing your experience in this special area of engineering.

 

[FFIELD]

Get Errors and omissions insurance in a value high enough to cover any potential law suits which I know is hard to figure. Add the cost to your basic rate and add for potential future loss of business time you will have to absorb when you are sued (which you probably will be).

Charge the customer for all of this. I know it's a lot of money but you must protect yourself from unscrupulous Lawyers.

For myself I would just see if I could get work form the litigents when they sue whomever takes this job

Frank

 

[smwpe]

Thank you Frank for your quick response. We think this is an area where there is a significant profit potential, but we have to protect out company. This is an eight unit apartment complex located on a bay area on the Florida west coast. If you say $1000 per unit the fee would be $8k, and then if you go with a 1.5 multiplier the price would be $12k. Add $1k for insurance and we are talking $13.

You don't have to reply to this.

All the best.

Sam

 

[HGP]

Sam,

Are you doing an engineering inspection of the building or is you Client expecting you to provide documents for conversion to condominiums?

I don't see much liability with an engineering inspection if done properly. I am sure you would not certify to something that was not visible or I did not have knowledge of. Also, you may want to limit your certification to not include any future owners.

I have done several conversions and the structural and mechanical condition of the condominium was a building code issue handled at the local level whereas the limits of the condominium were a state issue.

If your prospective Client is expecting you to provide them with documents (plans and plat) to convert to condominium, then $1,000/unit is not enough. If they simply want a report to see if conversion is feasibile, then $1,000 sounds fair and reasonable.

Hamilton

 

[ERV]

smwpe,

I agree with HGP.

In addition.

If you are providing the documents for the actual conversion, then this would be best handled by an attroney experienced in these matters. Add his/her fee to yours plus a generous mark up.

In all cases limit your liability by shifting responsibilty to appropriate outside sources and stick to your own level of expertise.

 

[FFIELD]

Being sued is a costly expense for anyone. Even if you are in the right you still have to hire a lawyer to defend yourself.
I once was sued by a homeowners association who blanket sued all archatects, engineers, contractors who did any work on the general development. I designed a 3 ft high retaining wall in an individual owners house about 12 feet long. I was one of about 100 plus individuals named as defendents. The cost of mailing my legal papers to everyone envolved, which you must do, was 5 times my fee.

After various meetings with the litigents lawyers they released me from the suit. I had to pay a lawyer to attend these meetings with me. I also had to pay a $2000 fee to be let out of the suit. What this was for I do not know.

This happened over 10 years ago but it still hurts. You can be sued for any reason by anyone for rediculous reasons. You will win but it still will cost you money.

Frank

 

[ERV]

FFIELD,

Exactly the point I'm making. Stick to your own expertise. As for the case of a law suits without merit, there is remedy under the law. In civil cases, if the plaintiff loses, then the defendent is entitled to reimbursement for attorney fees and other reasonable costs. In the future keep that in mind.

I tend to keep myself well insulated from such incidents. How much does it cost for legal counsel prior to an act or decision, as opposed to after?

 

[FFIELD]

ERV

You are right but in my case the lawsuit was dropped and it still cost me $10k. Since it was dropped no countersuit was available to me. Even if it was I did not want to put out more money to sue a well healed oponent on the possability that I could recoup all my costs. By the way this case went on for years.

 

[smwpe]

Thank you all for sharing your experience and expertise. I think I now know why most AE firms won't touch condo rehab work. I'll let you know how this all turns out.

SMWPE

 

[smwpe]

2/22/04

We're proceeding with this project at a budget cost of $12.3. The survey portion will cost #3.0. One of the good things is the owner has recently upgraded the electric service and the structural condition is excellent. The seawall is in good shape and the roof is in the process of being replaced. Another good thing is the attorney handling this has indepth experience in this field.

I'm having a problem estimating the expected life of the various components and the cost to replace them. We've searched the R S Means web site and found some interesting info. For example, one of the components is "Fireproofing and Fire Protection".

Our question now is:

Does anyone out there have a suggestion on how we can find info in this area on the web?

Appreciate your response.

SMWPE

 

[ERV]

For fireproofing and fire protection see the National Fire Protection Association (NFPA), this would fall under NFPA 101:

http://www.npfa.org

 

[Ron]

smwpe...your numbers are about right. We do lots of these as condition assessments. There is an ASTM Standard for a property condition assessment, which is the first phase of your task. See ASTM E2018.

As for liability, pay close attention to your contract terms. If you are signing their contract, look our for indemnity clauses. Also, do your best to get a "Limitation of Liability" clause in your contract to cap your liability at some "reasonable" number. Most firms in our business try to get a limitation of $50k or the fee, whichever is greater. If you have and will interject your professional liability insurance, don't make your policy limits the limitation of your liability. Keep your limitation as low as possible....remember, there is no relationship to your fee and the amount of liability you'll assume by doing the project.

I disagree with HGP that the liability is low for the condition assessment. I've seen high settlements/awards in cases where something was missed in the evaluation stage.


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[smwpe]

3/1/04

Ron:

Thank you. Excellent summary and exactly what we were looking for.

smwpe