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Reduce Liability on Dead Project

Reduce Liability on Dead Project

Reduce Liability on Dead Project

I did the structural engineering for a spec home several years ago.  The contractor went bankrupt during construction, and now the bank has the property for sale.  The basement of the house was completed before the contractor went under, so anyone who purchases the property will likely want to use the existing basement.

The problem is, I was never paid for my services, and I do not want to be liable for anything built on the foundation constructed from drawings which I sealed.

Is there any way to reduce or eliminate my liability?
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RE: Reduce Liability on Dead Project

Not really.  If you were holding a lien on the home for your services, you could collect that way or you could talk to the bank and perhaps get them to pay you as goodwill.

You cannot likely disclaim responsibility for a design that you submitted even though you were not paid.  Most states require accepting the responsibility of a project without regard to the payment or potential payment.

RE: Reduce Liability on Dead Project

That's what I was figuring...  But what if somebody else builds a different house on top of it and hires their own engineer?  Would I be liable for any potential foundation failures, even though I didn't design it for the new structure?

The other thing I was thinking of doing was sending a certified letter to the bank saying that they need to disclose to any potential buyer that I will not accept the liability for any modifications to the design.  Not sure if there would be any benefit in sending such a letter, but it might give the bank more incentive to settle the outstanding fees.  Would they be obligated to disclose this to a potential buyer?

RE: Reduce Liability on Dead Project

I read your post again.  I did not understand in the first reading that only the basement was actually built.  That changes things a bit.

One, you don't have to accept the responsibility of anything built on top of your foundation except the originally planned structure.  If that changes...not your problem.

I agree that you should write the letter to the bank.  Write one to the building department as well, since they will then know that any subsequent engineering did not include the foundation.  If another engineer wants to assume your design and provide his design for another house on top, get him to pay your fee before you turn over calcs or plans.

RE: Reduce Liability on Dead Project

Depending on the jurisdiction involved, you can write a letter to the local building department, asking that your name be removed as the structural engineer of record, citing your reasons for such.  

Should the project be sold and further work be done on it, a new structural engineer of record will have to be engaged for the project to be approved.  In that fact lies relief from your liability.  

I have done this in the past in Seattle and it worked.  Check with your jurisdiction.

Mike McCann
MMC Engineering
Motto:  KISS
Motivation:  Don't ask

RE: Reduce Liability on Dead Project

Mike is exactly right...have also done this....

RE: Reduce Liability on Dead Project

Thanks for the suggestions guys!  As it turns out, I talked to the Building Official today about the matter.  He said it was unlikely that I could be removed as the EOR.  

However, in order to obtain a Certificate of Occupancy, the owner would need the final SSI certificate from me, which of course I will not issue until payment is received.  Furthermore, if a new engineer is retained, he or she will have to assume full liability for the basement design for any modified structure above.  It would be unwise in my opinion for an engineer to do this, but it wouldn't surprise me in the current work-starved environment.

I believe I will go ahead and send a letter to the bank - it certainly can't hurt!

RE: Reduce Liability on Dead Project


However, in order to obtain a Certificate of Occupancy, the owner would need the final SSI certificate from me, which of course I will not issue until payment is received.

Be sure to include that in your letter to the bank.

RE: Reduce Liability on Dead Project

TDAA, I did...  I also stated that all plans, reports, etc are not to be used without our explicit authorization and that deficiencies were observed during our inspections, the corrections of which were not verified since the project died.

I'm still not extremely confident with my odds of actually getting paid.  The bank could tear down all of the walls and fill back in with dirt so that they are selling an undeveloped lot.  Or, the City could approve a new permit if another engineer took full responsibility for the design.  But either way, at least my liability will be drastically reduced.  Just wish I hadn't done so much work for free!

RE: Reduce Liability on Dead Project

Even though you talked to the Building Department - copy them on your letters. Also, send them "Registered - Return Receipt Required".  Then you will have a copy of who got your letter and when...

Now go call a good lawyer to verify that what a bucnh of engineers said maybe correct.

RE: Reduce Liability on Dead Project

Check and check...  I also referenced the certified mail article numbers in the letter.  The lawyer part may have to wait until finances permit it.

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