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Contract for in-house architect?

I am a licensed architect in the state of California. I have a job opportunity as an in-house architect for a developer. This developer does not have an architect on staff at the moment. If I take the offer, I will be signing and stamping the drawings. I am worry about being exposed to liability. I do need professional liability insurance coverage. Architect Practice Act requires signing of contract with the client. How does contract work if you are employed by your client (developer)? What are some ramifications and concerns if I work under a developer under these circumstances? Thanks!

 
Jul 14, 20 11:38 pm
Non Sequitur

don't do it unless you have a significant stake in ownership and profit.  What you describe is uber illegal in my region (canada).

Jul 15, 20 12:26 am  · 
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rcz1001

As far as I know, this is not illegal in California. We should get more clarification about the arrangement. This arrangement between Michael and the developer can be nothing more than a retainer contract where the client (developer) has an architect under contract to provide architectural services for the developer. If so, it would be like contractually retaining the services of an attorney for legal counsel. What Michael described could be "uber legal" if it is simply a continuous contractual relationship between the Architect and the client (developer). It is not clear to me if Michael Cheung is confused between what is an independent contractor relationship and what is a contract employment relationship.

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Non Sequitur

“On staff” does not give me much confidence that this is a client-architect type contract.

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rcz1001

Michael Cheung used conflicting terms. I am not sure if he is an employee or an independent contractor. For example, the following question suggests an independent contractor relationship: "How does contract work if you are employed by your client (developer)?" So, which is it?

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Aluminate

He's asking how does the required written contract work, if you are employed by your client. In other words he's asking for advice on structuring that contract, for a situation in which the architectural services are being provided for one's employer.   He's not talking about contract work - he's talking about writing a contract.  And the "client" in this case is also the employer.

1  · 
rcz1001

Michael Cheung, you had mentioned that the developer is your client. It is reasonable to assume you are an independent contractor not an employee. I do need to drive a point. If you are an independent contractor, stop using terms like "employed by client" and "work under a [client]". You are an independent professional. 

I am waiting for those who practice architecture in California to chime in on the questions you asked. Therefore, I am not directly responding to the questions you asked.

Jul 15, 20 4:39 am  · 
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"I am waiting for those who practice architecture in California to chime in ...

I'm curious if you're licensed to practice architecture in any US jurisdiction?

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Aluminate

To the OP:  this is a tricky situation with which you should have your own attorney and your insurance company's advisor help you to structure the contract with the employer.  You need to make sure it indemnifies you from claims, losses, legal expenses, etc. against the developer that aren't directly caused by your negligence as an architect. You also need to come to some written agreement about your insurance coverages, the employer's coverages, and who is paying for the insurances and for how long. Be aware that liability will follow you for the lives of the projects, so you will need to anticipate continuing your insurance even if/when you are no longer employed by this developer, until statue of repose runs out, at the least.   

NS:  It's not illegal in CA for a developer to hire an architect as an employee, to provide in-house architectural services for the developer.  The practice act permits this (the employer-employee relationship is explicitly allowed, per the definition of "business entity".)  Having any non-licensed ownership limits how the business can be structured, what it can be named, and what services it can advertise to others.  

"rcz1001" (aka Balkins):  What he's asking is how to structure a contract for architectural services, in a situation where the contract will be with his own employer.  CA requires that a signed, written contract be in place before a licensed architect performs any services.  If he were an employee of an architect, he would not need that contract with the employer because the contractual architect-client relationship would not be between him and the employer but between the employer and outside clients, but in the situation he's describing his employer is the "client" for purposes of the requirement for the written contract.

Jul 15, 20 12:58 pm  · 
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Non Sequitur

Thanks for explanation... so, stamp this or you're fired is protecting the public interest? I did not know things were that bad.

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rcz1001

Thank you Aluminate.

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Aluminate

NS: I agree it's a bad system - and not an employment situation I would take.

3  · 
proto

Personally, I wouldn't work in that arrangement. It is intended to minimize your service to basically a drafting & stamp service. The owner GC will  basically tell you how each project is going to be, and you will be expected to just draw it up whether it's good design or not. That sounds pretty awful, imho.

I suppose, if the owner is interested in building nicer work & it were structured where you became a partner in the business, that is a different situation where you have some agency & hope for not hating your job

Jul 15, 20 1:29 pm  · 
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mightyaa

It is not super-tricky if you are a regular employee; I regularly stamp stuff here.  First, make sure the company has insurance to cover your services and that the corporation is setup as a corporation (which is a ‘person’).  Also, I think in CA they have to be registered as a firm doing architecture with the State (a lot of States are setup like this, where some, you will be listed as the signatory, not your boss).  Where it is tricky; You have obligations as a licensed architect to oversee the work and your stamp is the approval.  If you don’t agree with the drawings, DO NOT STAMP.  Just make that clear before they hire because they might be thinking they bought a rubber stamp. Other than that, you are protected by the corporate umbrella.  Your liability isn’t much different than any other architect working under the firm name whether they stamp or not; they are still licensed professionals and have obligations to the State.

Kinda behind the curtain stuff of corporations, but the Board of Directors votes who the principal will be; your boss may chair the board and vote themselves as the Principal, but must maintain meeting minutes and corporate logs.  A CEO, principal, VP or any position with authority to sign and enter into agreements doesn’t have to be a stock owner, just appointed by the Board to have that authority.  Basically, all they have to do on their end is authorize you the authority to stamp architectural drawings on behalf of the company.  It’s really not much different than the liability and authorization given to those who can negotiate contracts on behalf of the firm. If they leave, it isn’t like that contract is with them specifically.  Your stamp is on behalf of the firm and represents the firm.  The only additional catch is that stamp has conditions assigned by the State of California.  If you don’t violate those terms, you’re good and covered by the corporate umbrella.   Just make sure they are setup to practice architecture in the State of California.  

Jul 15, 20 2:03 pm  · 
1  · 
whistler

hello conflict of interest! 

Jul 15, 20 4:48 pm  · 
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While legal this sounds unethical and seems to be a really bad work situation to be in.  It seems like the developer wants to hire the OP as a contract employee to have complete control over what he does.  As NS said "stamp this or your fired"  No thanks.  

Jul 15, 20 6:35 pm  · 
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mightyaa

See I don't get that argument or the 'unethical' part. If your firm is hired by a developer and you refuse to do his lame ass shit, your fired and replaced by another firm. Lots of companies do this with in house professionals... You think those engineered truss stamps are out of house? Or precast, or house developers, or ______. Basically, it's cheaper to hire someone on the payroll than hire an outside firm. I even know architecture firms that might have engineers, licensed landscape architects, and interior designers on staff. Corporate branding, and even government agencies hire licensed professionals to do stuff in-house and stamp. It's just not that weird at all. It's sort of one of those alternate paths a architect can go... and often the pay is a lot more than you'd get from a straight up architecture firm employment offer. Basically, what the f'k is the point of getting your license if you are just going to let it collect dust and someone else, getting paid a lot more than you, stamps drawings because they understand that stamp has value. There are a lot of non-architecture firms out there who will hire in-house design professionals. They just need to be setup properly. And as a side note.... If you are one of twenty architects at your firm, how expendable are you versus being the only architect?

3  · 

I hear you mightyaa. I know of plenty of architects that work in house for "owners," albeit none of them in California. The only hang up I see with it is the requirement for a written contract with the client. But if the client and the architect are the same entity (yes, there is an employee-employer relationship but its the same company) how do you meet the requirement in the practice law for a written contract? Do you even need a contract, does this portion of the law apply? I wouldn't think so, but I'm not seeing an exemption in the law (maybe subparagraph b.3.). I'll admit I'm not familiar with it, nor do I need to be ... I'm just finding this all interesting. 

My advice for the OP, ask a lawyer. Also negotiate a really good salary and profit-sharing scheme.

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b3tadine[sutures]

Would it make sense to S-Corp up, and have the Contractor hire your S-Corp? Just spitballing.

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Non Sequitur

Mightyaa, what you describe is not permitted under my architect's act. I am baffled that a license is worth so little in trumpland.

1  · 
mightyaa

Might be a Canada thing NS... I know I work for a engineering firm as the stamping architect. But you have to have the right corporation.. So, in like 3 of the 12 States I'm licensed, the corporation is registered as a architecture firm as well. Like your license renewal, I get a notification to update the corporate annual license since I'm the one registered as the architect in charge on the corporate docs... So I take it to our business manager, sign the docs, and make sure the business license is up to date... and I am an employee, not owner, not even a manager. Another might be if you are registered as a P.C. (Professional Corporation); that requires the Principal to be licensed in that field. My own firm, we were a normal corporation, but registered as engineering and architecture with the State (my Dad was a licensed structural and licensed architect).

1  · 
Non Sequitur

^fascinating. We require a certificate of practice up here if we want to stamp things and more often that not, only equity partners in an arch office will be listed as stamp owners on the certificate... but the other caveat is that the majority of a practice's ownership must hold an active arch license therefore, one cannot simply have a stamp on payroll. P.engs are more flexible tho and I know most contractors and manufacturers have one in-house. I'm always curious to see how different things are in my nearest backyard.

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mightyaa

NS, that sounds like what we'd call a Professional Corporation down here (if it still exist... been a long time since I set up corporate documents). I think, but am not sure, a Partnership also requires a licensed person as majority stock holder. So up North if you want to create a multi-discipline firm, you'd have to create a bunch of companies and enter into co-op type agreement? I'm pretty sure down here you can have basically the stock owners be non-licensed, where the Board hires a CEO to run the show... I've always seen that CEO be a licensed person, but I'm not sure they have to be. Might be setup that way here because of our huge corporations... Think Ford, I'm sure they have a ton of engineers in-house, but the head honcho's are business folks. Architects in the States are basically treated the same as Engineers here as far as legal and corporate.

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Aluminate

It depends on the US state. In some you can't provide architectural services to outside clients if you have any unlicensed ownership at all, but you can employ an on-staff architect to provide in-house architectural services to your own company or institution. In some states whether you can or cannot have unlicensed partners depends on the total number of partners and their respective percentages of ownership. In some states you can operate an architecture firm with no licensed ownership, as long as you have a licensed employee doing the supervising and stamping.  In some states only a registered foreign professional corporation can have unlicensed partners. And so on, with as many variations as states.

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mightyaa

Agreed. It is a bit complex, but there are also loopholes; PA after a ton of requirements for partnerships, llc's, and so forth requiring 2/3 licensed as directors for instance states at the tail end: "Nothing in this section shall be construed to prevent the practice of architecture by an individual as an employee of a person, partnership or corporation which is not an architectural firm, provided such individual holds a certificate to practice architecture in the Commonwealth in conformity with the provisions of this act and the architect's seal is affixed to all documents prepared by him or under his personal supervision for use in this Commonwealth. "

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Mighty - being a 'stamping machine' for someone where you basically sell your stamp to anyone with a set of drawings is not only unethical but seems foolish. This may not be what you're referring to though.

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proto

I think we're overlaying our own misgivings of not having design agency with a reasonable position for an architect. We don't like it, but it is legal and reasonable to work for someone else and provide the professional certifications (assuming you're doing the work and not just stamping).

It's likely fairly low stress work, just making sure it won't fall down & doesn't violate life safety...pretty low bars when you're doing the same stuff all the time.

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True. My biggest concern is when an architect is hired to stamp drawings on a project they where not involved in is that they really cannot say that they have coordinated the drawings. If you have a great set of drawings - yeah it's possible. Not likely though with developers and the types that hire architects to rubber stamp drawings. How are you going to track down missing info on the set you're reviewing? The developer probably isn't going to allow or pay the fees for you to do so. It's leaving a lot up to the developer and builder while as the architect you're left with all the liability. This is even more of a concern in states where a licensed architect is allowed to stamp engineering drawings (MEP, Structural) for projects up to a certain size. We're not even getting into who would be doing the CA. Realistically it won't be be architect as the developer will do it themselves. Sure the entire process is legal but it seems to have a high potential to create some big problems and get everyone into some unethical situations.


Just because you can doesn't mean you should.  Just my opinion.  I'm sure people like Mighty are making it work and isn't getting into any unethical behavior.  I would like to hear more about how folks like Mighty stay out of liability issues though.  


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proto

no objection from me re: hired to stamp on a project they didn't produce

but that's a bit of a thread drift from OP's ques

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Good point. - sorry about the thread drift. To be fair though I view working as an in house architect for a developer as stamping drawings you didn't produce. 8-)

1  · 

I was going to say it seems that we are making a fair amount of assumptions on what the work would entail. Most of the in-house architects I know that work for owners are basically project managers for their company's larger projects and would only be stamping drawings for projects like smaller renovations. Those ones that I know of are mostly working for universities and healthcare companies though ... I do think working for a developer raises some other questions about what the work entails. They may want a stamp for all the work they do so they never have to hire an outside architect, or they may want a project manager to simply interview, hire, and coordinate with the architects they do hire for those large projects ... who can also stamp some small renovations as needed.

Edit: reread the OP and it does say they would be signing and stamping the drawings ... I guess the question is how big is the work? Are we talking developer of single-family subdivisions, or are we talking developer of high rises in large cities?

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proto

single staff architect? project scopes are likely to be spec builds: renovations (comm or res), houses, small comm bldgs...

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midlander

OP, I have no advice on legal compliance other than to check whether other local developers have similar arrangements with an architect and see how they do it.


You should seriously consider having a lawyer with experience in architecture practice and claims spend an hour or two to review the labor contract with you - it would be several hundred dollars well spent for good advice if it helps you get a good job and avoid serious problems later.


A few essential issues you need to discuss and consider before you should accept this position:


Who is designing and drafting the projects? is it you? If others, do you trust their knowledge and experience? Will you have full authority to direct their work? will the scheduling include adequate time to perform everything you should do to verify the work?


How solid is your experience in this project type. I assume you're being offered a job to oversee work you've already been doing elsewhere in a similar role of responsibility.


Who is doing the CA? Will it /should it be you?


How competent is this developer? Do they have a good reputation? Will they put in writing to pay your professional insurance and indemnify you against any claims of malpractice from your work there, and do so up to the time limitation on claims in your state? Residential customers are picky and sue for lots of things. You'll definitely want assurance you don't pay out of pocket dealing with problems that may have been out of your control.


bigger picture: why do they want you doing this in house instead of paying fees to consulting architects? is it for faster turnaround, or limiting expenses? how will your compensation be determined and will it risk influencing your judgment in doing thorough work?


FWIW I worked in house for a large residential multifamily developer for a few years. Fun job, good pay, often demanding hours. But my role never included stamping drawings or even reviewing for QA - I was entirely front end on feasibility studies, masterplanning and developing design standards. Some contract review and consultant interviewing too.


For big developers (at least in my market) doing the work in house is absolutely not done. There is enough hassle with liability for construction defects and customer dissatisfactions as is; having the design liability outsourced to a third party was definitely helpful. But also project schedules and staffing would have been impossible to manage if we had to staff up a team each time a project "got real" - and some projects had conditions that required particular experience only some niche firms could do really well.


So you should try to understand why they need someone in your role, and make sure you would be supported in a fully collaborative way rather than just being a man with a stamp sitting in some back office.

Jul 17, 20 1:06 am  · 
2  · 
Thayer-D

Liability insurance should be provided by your employer.  They are the 'architectural' firm and you the employee.  You will learn a lot working directly with a developer.  Good luck.

Jul 17, 20 10:07 am  · 
1  · 

There is a joke about learning from bad examples in there somewhere.

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SneakyPete

Understanding the priorities of a developer is worth a lot. I know a few very successful architects who have a really good gravy train going because they know what the developer wants and tailor their output. They also know what the boundaries are, so they use those to insert their own priorities to try and make the developer's projects better than they otherwise would be. It works most of the time, but sometimes they still end up designing turkeys...

2  · 

I couldn't agree more SP. Many of my past and current clients are developers. Most have been nice to work with, some meh. This biggest issue I have with developers (as with any client) is when they themselves don't understand their project and what they want. All clients do this to some extent however when a developer client dose this it typically involves a change that results in a huge design change at the 11th hour that makes my bowels liquefy in fear due to the impending chaos that will ensue to make the change.

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Any update on this from the OP? Wondering if the other thread about the AOR getting fired/laid off because the employer decided to hire 3rd-party architects would change anything?

Jul 21, 20 8:16 pm  · 
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zachf

<wrong thread>

Jul 29, 20 2:42 pm  · 
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