One of the most common causes of a complaint against an architect is the architect’s certificate – not a certificate issued while acting as contract administrator but one commonly issued to a purchaser instead of an NHBC guarantee or the like.
For many residential purchasers, an NHBC guarantee is the gold standard - meaning that regardless of the solvency of the builder/developer, serious defects will be remedied at no cost to them. For a whole host of reasons, such a guarantee or equivalent from insurers may not be available to a developer and so they may ask the architect to sign a certificate which places them, or rather their professional indemnity insurers, in the firing line instead.
If the architect takes on this responsibility for their client, they must make sure that not only are they paid adequately for the risk and the task in hand but that they, their Insurance Brokers and Professional Indemnity Insurers fully understand what the certificate requires them to do.
The form set out in the Council of Mortgage Lenders’ Handbook (the ‘CML certificate’) is perhaps the most common and has been unchanged for a number of years. Designed to be relied upon not only by the purchaser but also their lender, the certificate satisfies the lender as to the property’s suitability for mortgage lending, and without it any developer would have a restricted market. An architect should bear this in mind as it does give leverage should they need it.
First of all, what does it require the architect to do? The CML certificate specifies:
“1 I visited the point at appropriate periods from the commencement of instruction to the current stage to check generally:
b)conformity with drawings approved under the building regulations; and
c)Conformity with drawings/instructions properly used under the building contract.”
It is not a warranty as it does not state there are no defects in the property, nor does it oblige the architect to make good if there are, unlike an NHBC guarantee. However, from the architect’s point of view, records confirming compliance are absolutely key. For each certificate, the architect should imagine they will need to prove to an angry purchaser that:
- They made periodic inspections at all appropriate times; and
- those inspections were detailed enough to satisfy another architect looking at the matter some time later.
The records of these inspections are the key element of any defence to a claim against an architect arising from their certificate.
To whom and for how long?
The CML certificate expressly states that the architect will be liable to the lender and the first purchaser for six years from the date of the certificate, although this can be “transferred to subsequent purchasers and their lenders”.
The effectiveness of this statement at limiting liability to six years has been doubted in a recent decision in England (Hunt & Others v Optima (Cambridge) Limited & Others), although English cases need to be read against English law’s very different take on unilateral obligations when considering the position in Scotland. The six year limit may be enforced in Scotland, and there would be plenty for another article there, but having a specified time limit certainly gives ammunition when trying to refute a claim. The Hunt case also helps as in that case, most of the purchasers had exchanged contracts and some had even taken entry before the certificates were issued, so the architects could successfully argue there had been no reliance upon them.
A similar situation may occur in Scotland where a purchaser has already concluded missives before the certificate is issued. Unless there is a suspensive condition requiring the production of a suitably unqualified architect’s certificate, it is also arguable there was no reliance. Indeed the Scottish Standard Clauses, which came into effect on 5 January 2015, call for “a Professional Consultant’s Certificate… in compliance with the current edition of the CML Lenders’ Handbook…” - although builder’s missives will often depart from them.
Firstly, the certificate’s wording should avoid providing any warranty. It should be restricted to a statement that an architect has taken appropriate steps to inspect the work at periodic intervals and that they were not aware of any defects as at the date of certification.
Secondly, certificates can (i) be qualified depending on an architect’s remit and (ii) limit where and by whom it may be relied upon. An architect, or indeed any professional, should never say they have done something they haven’t, and they should word certificates accordingly. Indeed, false or misleading statements could have an impact upon the availability of insurance cover for claims arising from such statements.
Lastly, records are absolutely key. Even if there are arguments on time bar, reliance or any other heads, without them it is difficult to explain to a disgruntled purchaser, their lenders and advisers why they should not succeed in a claim against the certifying architect. This is especially true where the contractor/developer is insolvent and they look to the architect and his insurers to make good any loss.