Contract documents

August 5, 2022

Certification is an important task of the design professional, but should be limited in scope. Design professionals need to be aware of the limits of their contractual responsibility for certifying work and their obligations need to be well defined and limited. Certifications should be provided based on professional opinion only for aspects of the project subject to the scope of services of the design services agreement utilizing terms such as “to the best of our knowledge and belief.” Be certain to avoid absolute words that elevate your standard of care and responsibility, such as “guarantee” or “warranty.” Design professionals typically provide certifications in three instances:

1.            Payment Certifications

The design professional’s basic services (usually the architect with the support of the engineering consultants) normally include the review and approval of the general contractor’s monthly pay request. It is important for the design professional to be well aware of construction progress on the project and to only certify payment for those portions of the project that are sufficiently completed. The payment request needs to align the requested value with the percentage of completion of each portion of the work. Do not provide certification for amounts that exceed the project progress or for any portion of the work that is observed or known to be non-compliant with the project’s plans and specs. If the client insists on certification of a pay request despite your identification of non-compliant work, issue a letter to the client documenting your objections.

2.            Certificate of Substantial Completion

The Certificate of Substantial Completion is provided at the point where construction work is sufficiently complete to allow the owner to occupy and utilize the project in the manner for which it is intended. The Certificate of Substantial Completion is accompanied by a list of items that still need to be completed or corrected, commonly known as a punch list. While most industry standard contracts require the contractor to prepare and issue an initial punch list, the design professionals provide a more thorough review of the project and preparation of a comprehensive punch list. Through the payment certification process, sufficient funds must be withheld to recognize the work necessary to complete the project and to motivate the contractor toward prompt completion. The design professionals should thoroughly document any aspect of the project that is incomplete or non-compliant. Again, the owner’s acceptance of non-compliant work, which is their right under most contracts, must be documented by the design professional to protect the design professional in case of failure of that component of the project in the future. The design professional, of course, should discourage the owner from accepting non-compliant work in any situation.

3.            Lender Certifications

For projects that involve outside financing by a bank or other lending institution, the design professional is normally requested to certify the level of completion and provide a statement that the project was constructed in accordance with the plans and specifications. Lenders often include language in certification statements requesting the design professional to certify work that is beyond the scope of the design professional’s agreement (examples include the sufficiency of off-site utilities, traffic considerations). Language enhancing the scope of your contract should be stricken from the certification. The design professional’s certification should only address the scope of its contractually obligated design services as evidenced by the contract documents that it prepared and the construction administration services that it provided. Request the certification document in an editable format, modify the language so that it accurately reflects your scope of services and knowledge, and preface the certification with the statement “To the best of our knowledge and belief…”

4.            Certification of Energy Use and Building Emissions Measurement and Reporting

As part of awareness of global factors impacting climate change and to promote reduction of the impact of the built environment on the health of our planet, several municipalities and other governmental agencies are considering the establishment of targets for reducing building emissions and creating a means to enforce this goal through legislation and regulation. New York City, in fact, enacted legislation in 2019 known as the Climate Mobilization Act (link) including Local Law 97 mandating ambitious reduction of greenhouse gas (CO2) emissions in 2030 (40% reduction) and 2050 (80% reduction). Attainment of these goals will likely require significant upgrades to existing building systems and envelopes after analysis of current energy utilization including energy audits and understanding and potential inspection of maintenance and operations factors. In NYC, published greenhouse gas coefficients of sources of energy through electrical and power grids and alternative energy sources are additional considerations. See Local Law 97 – Sustainable Buildings (nyc.gov) from New York Engineer for further information.

This NYC legislation, and similar regulation expected to be enacted in other cities across the U.S. and perhaps overseas, offers opportunities for architects, engineers, and other professionals with expertise in energy utilization, measurement and pertinent related environmental matters to provide professional services to contribute to the success of these intended and aspirational goals of greenhouse gas reduction. However, similar to other limited design services involving certification of reports, disproportionate risk to the design professional should be managed. First, you need to have the expertise and experience to provide the services within the professional standard of care. Second, you should only certify that which you know to be true – if you are provided information by others, such as utility bills and other energy utilization documents, can you trust or verify the accuracy of that information? Third, you should manage your risk in contract through clear and unambiguous scope of services definition including excluded services, limitation of liability equal to fees earned, and waiver of consequential damages.

Andrew D. Mendelson, FAIA, is Senior Vice President and Chief Risk Management Officer of Berkley Design Professional,  a division of Berkley Alliance Managers which is a member company of W. R. Berkley Corporation that provides professional liability insurance to design and construction professionals.

Risk management resources for design professionals can be found here. Andrew may be contacted at amendelson@berkleydp.com.  

Information provided by Berkley Design Professional is for general interest and risk management purposes only and should not be construed as legal advice nor confirmation of insurance coverage. As laws regarding the use and enforceability of the information contained herein will vary depending upon jurisdiction, the user of the information should consult with an attorney experienced in the laws and regulations of the appropriate jurisdiction for the full legal implications of the information. 

Practice management recommendations should be carefully reviewed and adapted for the particular project requirements, firm standards and protocols established by the design professional.

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