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Re: California Townhomes

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Even though the 'Calderon process' and the Aas case favor designers, I would still distance myself from the liability associated with HOA work.

Steven A.
Los Angeles

Paul Feather wrote:

A general question for the list, and specifically California Engineers. How do you deal with multi-story multi-family housing project liability? We typically do not and have not been involved in townhome / condo projects.  Lately we have seen a definite increase in proposal requests for this type of work.  I am not looking at typical individual wood framed multi-unit projects or tract home style projects, but multi-story developments over retail and underground parking. So far, we have simply declined to participate in these projects.  But some of the projects have looked pretty interesting and financially attractive. Our insurance agency is dead-set against anything involving a HOA.  The statistics show 90% off all HOA projects end up in litigation before the 10 year latent period, usually frivolous but still litigation.  I am informed that if we start listing HOA projects on our yearly project summaries our insurance will increase by at least 15% a year.  More than 20% to 25% of yearly revenue and we will become un-insurable. Project policies are virtually a thing of the past, and wrap policies are difficult to find that adequately provide for the design professionals.  The developers are forming individual LLC or LLP entities for each project, dissolving them as soon as possible after construction.  The liability remains with those of us who cannot remake ourselves every few years. And yet, I see this type of work multiplying and under construction, so someone is providing design services.  How many of you are doing this type of work and how are you protecting your liability?    Paul Feather PE, SE