Project Team Jumps Ship. I'm left with New Owner

[bigmig]

I have never experienced this until now, but this just happened.
I was contracted on fairly complex duplex residential project; went through design and Building Dept Approval and then was
told that they had 'sold' the project to a new developer. My scope of work, as usual, was for design, and construction administration.

I then later find out that the entire design team was on a "permit process only" design status, and is now off the job. If the new owner wants
to hire them back, he can.

I'm have a few concerns:

1. no one on the design team told me this was happening
2. the owner didn't tell me he was doing this.
3. I'm stuck with a client I have never even met, let alone screened.
4. I'm just wondering if there are any design questions for the Civil and Architect....what happens?

I'm a bit shocked, but maybe it is because I am naive to this type of development operation. Any thoughts on risk, or corners to lookout for based on
your experience would be helpful. I'm just mulling how to handle the undoubted barrage of questions coming, being has how I'm the only design
professional even left.

 

[WARose]

I'm have a few concerns:

1. no one on the design team told me this was happening
2. the owner didn't tell me he was doing this.
3. I'm stuck with a client I have never even met, let alone screened.

I'm not sure if I would hang around under those circumstances. A guy who runs his company like that.....he's not trustworthy.

I've had to separate myself from those kinds of companies. And I am better off for it. Just let this guy start over from scratch.

 

[fel3]

Were you contracted with the architect or with the developer? If it was the architect, then if they're off the job, you are most likely off the job as well. If you were contracted with the developer and working in parallel with the architect (not common, but it happens sometimes), then you may still be on the job. Either way, you need to check the specifics of your contract to make sure. Look for any provisions specific to your role on the project (which may define how you could still be involved after the architect leaves the job) and for any provision related to successors and assigns (which may define your situation when the owner changes. If you're still not sure, then consult your attorney.

 

[dik]

It sounds like fun... Depending on your experience, it can be character building. If you feel your in too deep find out what your responsibility is, and maybe extricate yourself if possible.

Check with your lawyer to determine the scope of your work. Stop and think what issues you may have. Sit down and talk to the new owner/project manager; he should be aware of your new involvement. Explain your issues. If you can find out what the conditions of his purchase were. Advise him if there are any new/additional fees and why. If this were my project, I would be expecting additional fees just to accommodate the transition. Were you responsible for just the design? construction review? any certification?

 

[LittleInch]

Why in 3) are you "stuck with a client you never met"??

Unless your contract allows it to be novated or essentially sold on without your approval then your contract rests with the previous owner surely?

I'm with Fel3 here - you need to start reading the guts of your contract.

You can only work on the basis that if you are somehow tied into the project then other professional services will be available for you to access in the next phase of the work.

I'm surprised that you think this is unusual though, selling on of developments happens all the time if the initial guys is set up like that - get the plans and permissions then leave the hard work and large finance costs to someone else and move onto the next one.

 

[Smoulder]

Selling projects with approval is common. More valuable with approval in place. First developer might be short of cash or not actually a builder. Agree with others. You might not have a contract anymore so no protections if you work for new owner. Notation is a risky contract term. Most people try to avoid it IME.

 

[phamENG]

The new developer may be in for a bit of trouble. Most AEC design contracts do not allow the sale of a design. My contracts specifically prohibit any transfer to a 3rd party. So more than likely, they don't get the architect's design. If they don't get the architect's design, your design isn't worth much. Do you know the architect? Might be a good idea to have a conversation with them and see what they're doing. Maybe they're allowing it. Maybe they'll be suing the developer. Keep your eyes open.

 

[human909]

I believe Little inch nailed it here. You are very unlikely to be "stuck" with the new client. You are likely completely free to wash your hands of things or enter into a new contract with the new party. I presume you've been paid for work already performed?

On a slight tangent how many people here have detailed written contracts with their clients? I've never received or provided a written contract beyond the scope (and sometimes exclusions) and the price.

I've signed a couple generic agreements with multinationals firms I work with but they have mostly been concerned with NDA, insurance coverage and payment terms etc. Nothing too in-depth regarding the provision of engineering services. When I enter into contracts of service with them I'm back to a scope and a price.


(I'm not naive to relevant contract law. I just work on good faith dealings with clients. None of my contracts have exceeded $20k. If I had a single project over $50k I'd probably discuss more about the terms including progressive payments etc.)

 

[Smoulder]

@human909 Not a sole trader but small. We always need contracts or insurance walks away. They need insurance coverage and limit of liability agreed. Other things added in our std contract is still just one page and doesn't really look like a contract more like a summary table but they tell me it's solid. Lot of times when we send it out client remembers they have their own contract and we have to sign that but still better than no contract. Old company was bigger and their analysis said no relation between fee and size of claims. Biggest loss was on a 25k job which would be 40k now. 90% of protection comes from limit of liability and client attitude whether they go for jugular.

 

[dik]

...a written contract only for large projects. For most of them the detailed fee proposal letter is what I use. It's still a contract, albeit a different kind of contract.

 

[ALK2415]

Dik, As an experienced engineer like you, I'm sure that you can seamlessly manage new design teams and ongoing construction modifications. As long as the original design will remain "intact", and no external factors will compromise upcoming project. If your "written contract is firm", ensuring continuity and stability.

Remember that "New" Contact/opportunities are always welcome, so think positive of them and reach out to see any new request or modifications (make a visit).

 

[dik]

That's why I said, "...it can be character building." I often go beyond what I've done; this is the fun of engineering. When I was just a kid (maybe 10 or 12), my uncle was rebuilding the engine of my dad's 51 Chev... I asked him how it worked and he explained how an ICE worked. I borrowed a coil and spark plug from him and installed them in a paste wax metal container and connected it up to my electric train transformer. Adding gas to the tin didn't work but using an insect sprayer I could detonate the air-fuel mixture and 'blast' the top of the paste wax container up about 30'. My cognitive skills back then were frightening.

With most projects, I generally 'just do them'.