Architects are often asked to sign Lender Assignments or Lender Certifications as a condition of a Loan Agreement for the borrower, the project owner. These documents, usually presented after the contract that defines the scope and duties of the architect is signed, can create significant risk and liability exposure for the architect. These documents can improperly increase the standard of care for the architect, and often include warranties, guarantees, and/or certifications attempting to shift responsibility for others on the construction team to the architect. When these documents are signed, they create terms and conditions which are often inconsistent with the agreed contractual scope and can create uninsurable risk for the architect.
AIA California has asked the law firm of Collins Collins Muir + Stewart LLP to prepare model Assignment language to help architects negotiate fair and reasonable language that remains consistent with the professional standard of care under state law and not run afoul of the architect’s professional liability insurance.