Sticky Situation: Advice Appreciated and Judgement Expected 4

[DaBear51]

Morning all,

I'll preface this by saying I do acknowledge my own accountability in how I got in this situation. I won't reject any criticism or judgement I receive her, but I do hope I can get some good advice. As a young engineer, I like to focus on learning from every mistake I make.

Brief Background: Civil P.E. for 2 years, have worked in the heavy civil, infrastructure sector for firms. I freakin' love engineering. Worked for a GC during summer internships and four years after getting B.A. My mantra is the best engineer has field experience as there are many things one can not learn or observe from a desk that they can being on-site of an actual project.

Situation: I have stamped two residential projects for family/close family friends. I only took the work giving full disclosure to the Owner and GC's that it's not my bread and butter, but I am confident in my abilities to design an acceptable residential project. And because I knew the GC and these projects were not complicated, I knew I could rely on the quality and expertise of the GC.

Side note, I did take a residential design course in college and have a lot of great, older civil engineers I used for advice and help during my work.

Of the two I've stamped, the latter one is currently under construction, foundation was poured last week. Last week, the bank financing the project (or at least we, we as in myself and the GC, thought they were) notified the GC to cease all work as the loan was never closed. The client led us to believe financing was secure and they were eager to get started. From what we gathered, the client failed to meet one requirement for the loan closing and it was never finalized.

As of now, work has halted and we are waiting for the client to let us know that the financing is good to go.

BUT, this is not the first issue we (myself and GC) have had with the client and it is possible the GC ends up refuses to finish the work. IF this happens, I will not feel comfortable with my stamped drawings being used by a new GC.

What are my rights and options here if my preferred GC bails out and I don't want my stamped drawings being used anymore?

Added info: The foundation is a post-tension slab designed by another firm. So my stamp is on all pages except that one.

TLDR: I designed and stamped a residential project knowing that my preferred GC would be building it. They potentially may bail now after just finishing the slab because bank notified GC the loan was never finalized. Client led us to believe it was. I don't want another GC building my design. Can I rescind my stamp preventing my drawings from being used by another GC?

 

[dik]

I think you just have to wait and see if there are any issues. If you have the time, you should review your work to see if there are any shortcomings for any GC to undeertake the work. Make sure it's OK and have the revised documents available in the event a new GC is involved. My documents for a friend would not be much different if they were for John Q.

Rather than think climate change and the corona virus as science, think of it as the wrath of God. Do you feel any better?

-Dik

 

[TigerGuy]

I don't think you can rescind something you have stamped and signed. It is a completed deliverable. You may need to issue multiple addenda to address anything you worry another GC may not understand or might modify. This could be a great learning opportunity. You will have to be heavily involved in the project for your parts of the design to make sure it is performed as intended.

Ultimately, it's time for communication. You need to have a direct conversation with the client and let them know they have caused a potentially bad situation for all involved. This is going to cost them extra for your continued involvement. Document all that has happened this far, and all that does happen, and keep it on file.

Is there not some documentation that is supposed to be provided to a GC, prior to starting construction, to prove financing is in place?

 

[DaBear51]

My documents for a friend would not be much different if they were for John Q.

It's not that I half-assed the design, I just don't have any liability insurance, securities, etc. This was work I did on my own at home completely aside my actual job and would not do this for just any client.

So if this GC falls through and the project has to be restarted/paused and then started anew, I don't have any sort of option during that process to say "hey, ya know what, I changed my mind. I am removing my stamp from this project."

Another note to add here too, I was not paid directly from the client. My fee was factored into the construction cost and I would technically be paid by the GC. Keep in mind, this is family and friends so not a conventional situation. But at this point, I need to start doing my homework on what my professional options are.

 

[DaBear51]

I don't think you can rescind something you have stamped and signed. It is a completed deliverable.

Like I said in my other reply, it's not that I half-assed the design. But yes, if this project did end up in the hands of a different GC and I couldn't "take my stamp back", I would certainly review the entire set and likely have a fellow engineer's review as well.

Not sure if this may matter, but I also was never paid by the client. My fee was factored into the construction cost and I am essentially being paid by the GC. Again, this is all family and friends so not a conventional project.

 

[phamENG]

Biggest question: who is your client? With whom do you have a contract? The owner or the GC? If the owner is your client and your contract didn't stipulate that it would be built by a particular GC, you're out of luck.

If the GC is your client, then you have a leg to stand on. Unless you added something silly to your contract, you maintain the ownership of your design, and license its use to your client. So if you licensed the use of your design to the GC and the GC is no longer involved, nobody involved in the project has a license to use your drawing. When the GC withdraws from the permit, they will have to withdraw the plans submitted as well. You'll likely have to compose a letter to the plan review office indicating that you are no longer the EOR, you are no longer involved in the project, and none of your plans should be used for issuing the new building permit.

This could get very sticky, though. If your plans are being used to secure the loan, and you pull out and walk away you could compromise their financing. Whether or not they'd win is a lawyer's matter, but they could potentially sue you for damages. Depending on the size of the house and the time it takes to get things straight, current interest rate changes could result in a considerable increase in cost. Though if they never had a contract with you then you'd at least be insulated from it by the GC. But never underestimate the willingness of an American to sue somebody.

There's a difference between submitting a set of plans that's light on detail because those details are codified/prescriptive and the contractor should know the code and light on detail because you don't know what detail to put there. If it's the former, sure - happens all the time in residential construction (though I'm not a big fan). Just like you did it, it's often only done if you trust the parties involved. Comes with risk as you're learning. If it's the latter...well I'll let you judge yourself there.

 

[phamENG]

Oh...the owner is a family friend. So less likely to get sued. Hmm...unpleasant.

 

[DaBear51]

No contract, my pay was figured into the construction costs, so plan is/was to be paid by end of project from the GC. Only documentation records are e-mails.

So if the GC pulls out, the permit will be thrown out as well and they will have to start from scratch. So I'd imagine when/if that happens, that would be the time for me to compose a notification that my design shall not be used for re-permitting purposes? And I highly doubt legal action would be taken against me by the homeowner/client, but it seems they would have to establish that this was an official transaction between myself and the client. Which I was never paid for, so would probably tough for them to prove that.

Did not consider the building loan effects, which currently is still in hiatus. Let's say the GC pulls right now, which means the loan is still not, and was never, finalized. Would they just start looking for another Contractor to settle the open loan? Or would the bank basically say, "well we are not going to wait for you to find another GC, so we are denying this loan now. Come back when you find someone." Which seems at that point would also be the time for me to notify the client officially that my stamped plans shall not be constructed by anyone other than my designated GC.

 

[LuK13]

I've seen family not pay for services rendered, and I've seen family sue. I wouldn't trust a family friend to not sue just because they are your friends now. Situations like this can bring out the worst in people.

The lesson that hasn't come up yet in this thread, or maybe I missed it, is there is a reason a lot of professionals have a policy to not work for family. They can be your worst customer, and then at the end of the job you still have to see and interact with them on a regular basis. Could make for some rough Thanksgivings...

In the future if you are going to work for family, then you need to treat them like any other client. Keeping things simple like skipping contracts or other formal documentation just weakens your case if things go tits up.

In pursuing this "I was working for the GC" line of action you need to be careful that you didn't represent yourself in a way that the client believed you were working for them. They may be able to seek legal recourse as if you were engaged by the client and not by the GC if it was reasonable for them to believe that was the arrangement in the absence of the contract. You said "Which seems at that point would also be the time for me to notify the client officially that my stamped plans shall not be constructed by anyone other than my designated GC." which implies you picked the GC and that implies a contract structure of client > you > GC which could lead a reasonable client to believe that they have a license for your design.

You may want to change your language to highlight that you are the GCs engineer, not the clients, if that is a truthful statement anyways. Unfortunately the waters seem to be pretty murky so hopefully this all shakes out the easy way and you dodge a bullet.

 

[LittleInch]

I will not feel comfortable with my stamped drawings being used by a new GC.

After all the above, I can't see any reason for you to say this. A design is a design. It shouldn't make any difference who builds it, it stands or falls on its own.

Unless there is something that the GC has allowed for which isn't specified somehow, I think you might be overthinking this.

Remember - More details = better answers
Also: If you get a response it's polite to respond to it.

 

[phamENG]

LittleInch - if only it were so cut and dry. In many residential markets, it's not. As an example: I had to work with a contractor once to solve some problems on a house they built. I was going through everything with him (older gentleman, in the business for a very long time), and I was citing code violations to him. After a while he stopped me, and asked what I was talking about and demanded I give him clear instructions on how to fix it. I told him to do what it says in the residential code - it's very cut and dry and they even have pictures. He exclaimed that he hadn't looked at a building code in over 20 years and he wasn't going to start now. Fully licensed and successful contractor with enough clout for the City inspectors to 'rubber stamp' his inspections. Not an abnormal circumstance, unfortunately.

So for some projects, where I've been brought in by a contractor I know or find out a known entity is building it, sometimes I'll be a little 'light' on the details. Maybe throw in a schedule or two rather than a whole page of details. The requisite information is there, and with the contractor's known work ethic and QC measures, I know the project will go well even if I don't hold their hand through the whole thing.

For some projects, if I have no idea who's doing it or I know it's going to be a fly by night outfit, I'll go nuts on the details to make sure they know what needs to be done, and to make sure I have a leg to stand on if they ignore my drawings (happens a lot).

DaBear51 - sounds like a tough spot to be sure. Best to communicate with your friend and let them know what's going on and that if this GC that you know and trust walks you're not going to support the design going forward. It might be enough to make them mend fences with the GC, or might ruin your friendship. Only you have any insight there and how best to handle it.

 

[EnergyProfessional]

One lesson to learn: every design you stamp should be in full quality and detail regardless of who you think will implement it.

I do some designs that our mechanics install in-house, some get bid out to contractors. for in-house I also buy major equipment for them, so I don't need to be detailed on that. First I though in-house makes it simpler on the drawing end, but over time I ended up to make those plans to the exact same detail... also for the purpose of permitting. it also happened that at some time it was decided a project is in-house. but due to capacity reasons, it was decided to bid it out.

Once you stamp something and that gets submitted to JHA, it is public record and official. JHA doesn't really differentiate between who actually is GC or what you assumed. You are the designer and responsible for what you stamped, not for what you were told in an email or over the phone.

 

[fel3]

Another lesson: ALWAYS have a contract. I don't know about your state, but in California a contract is required (in most circumstance) before beginning a consulting project.

============
"Is it the only lesson of history that mankind is unteachable?"
--Winston S. Churchill

 

[dik]

Can that be a verbal contract? As long as all parties agree, a verbal contract is generally binding.

Rather than think climate change and the corona virus as science, think of it as the wrath of God. Do you feel any better?

-Dik

 

[ukengineer58]

Not sure if I am oversimplying this here...
you provided drawings to the GC to allow him to safely build a house to the requirements the homeowner requested off the GC.
You have not provided drawings to the homeowner for them to procure a GC contractor to build your design.
The 'ownership' of the design is the GC who paid you for the drawigns (or entered into a contract with you). Not the homeowner. Unless the GC has already 'sold' the plans to them.
So no one has the right to use the drawings except the GC who you did them for. In basic terms you didnt do them for the homeowner. So they are not theirs. If the GC isnt getting the job then you dont get paid? Id speak to the GC and ask them to tell their client the drawings are part of the GC package and if they are not on the job then they have no right to use them (maybe in writing). Presumably the GC would say this anyway. Or the homeowner is getting free work. And if the homeowner or a new GC ever ask you a query or contact you explain that the drawings shouldnt be used as they are for the original GC, developed in conjunction with them. if they ask you to 'sell them' say you are not happy working for a competitor and they will need to find someone else. You could even imply legal action if said plans were used, that you havent been paid for, by third parties you have no contractural relationship with.
in simple terms if they use yours and the original GC plans without permission it no differnet to them going into your computer, stealing them and building off them. They have no rights to do so.

 

[EnergyProfessional]

I'm also surprised the GC hired you without you having insurance.
Here it would be almost impossible to be a consultant and find someone who is willing to hire an uninsured person/company. I also would suspect the bank would require the GC to have insurance etc.

Next time probably best the GC employs you as an hourly person (high hourly rate, no benefits and guaranteed hours etc.). Then it is their design or whatever they want to do with it and their insurance is liable. Your stamp still requires you to design to code etc. But other than that, you are just like a burger-flipper if this all goes South and walk away. If the GC doesn't want to do that, they have to hire a "real" design firm with insurance etc.

 

[phamENG]

EP - most GC's wouldn't have the right insurance. You need PL/E&O - I've never met a GC that carries that unless they're running a fully integrated design/build shop. And if they are, they probably already have a staff of engineers/designers. But even that is rare. Most DB outfits I've worked with still sub out all the design work (to properly licensed and insured companies, of course).

 

[fel3]

dik…

In California, the contract must be written.

============
"Is it the only lesson of history that mankind is unteachable?"
--Winston S. Churchill

 

[EnergyProfessional]

phamENG: if the GC does such stuff frequently, they could get the insurance. Obviously I don't know what happened here. But it looks like the GC hired the OP at half the price of a company and if everything goes well, everybody wins. But if there is a problem.... well, here we are.

I don't have personal experience with it, but heard that some people don't do any residential work since there is a much higher chance for law suits. And you deal with people suing who have hurt feelings rather than based on actual legal facts (like a commercial client would). If you really think about the risk and liability, you will realize you are better off not doing uninsured side jobs and have a hobby instead.

If you do work on the side, and it is just painting a living room, well, the potential risk is very small. But professional work isn't really good for side-work due tot he risks. Once you price in the risk (or insurance etc.), your cost are too high to be competitive. The problem is, having insurance is a huge fixed cost, even if you only work on the side for 1 hour, or for 2000 hours. If you have a regular job, you typically can't do many projects on the side to make it worthwhile to pay for insurance, software etc.

I once worked for a consultant on the side and was an employee for those hours. So I didn't have a risk or other cost. the pay was good, but in the end it wasn't worth the potential conflicts of interest. I couldn't imagine it being wortwhile if there is added liability and legal hassle.

I never needed my car liability insurance, but I'm glad I have it.

 

[phamENG]

I think it's even more convoluted than that. OP said the homeowner is a family friend. The payment arrangement was probably selected less because the contractor hired him and more because, in doing so, the OP's friend didn't have to front the cash to pay for the design and can, instead, pay for it out of the bank's construction loan. So there's some sort of triangular relationship that makes it even worse.

You're right about residential work and liability. One of the reasons I'm trying to move back to the commercial space. Residential has worked well to get my business off the ground, and I have a few clients that I'll hold on to, but for the most part I want to get back to commercial/industrial.

You might be surprised about the insurance costs. I started my operation as a side gig, but did it right - business license, fully insured, etc. $1M/$1M E&O policy for less than $2k/year and locked for 3 years. Of course it will continue to rise as my liability exposure grows, and I've since taken it full time so that'll also be a spike. But if you work with the right insurer they can find reasonably priced policies.