The Supreme Court of California has ruled that the designers of residential properties can be held liable by future homeowners for building defects, even if no contractual relationship or privity exists between the homeowners and the designers.
In Beacon Residential Community Association v. Skidmore, Owings & Merrill, the homeowners association for Beacon Residential Condominiums in San Francisco filed suit against the developers and its architectural firms, Skidmore, Owings & Merrill, LLP and HKS, Inc. The HOA claimed that the firms’ architectural and engineering designs caused structural defects, cracking and overheating, making owners’ units uninhabitable for significant periods of time.
The two architectural firms argued that they had no legal responsibility to the condo owners since their recommendations were made to the developer who bore final decision-making responsibilities. In a unanimous decision, the state’s high court disagreed, stating, “Just as a lawyer cannot escape negligence liability to clearly intended third party beneficiaries on the ground that the client has the ultimate authority to follow or reject the lawyer‘s advice…so too an architect cannot escape such liability on the ground that the client makes the final decisions.”
In its Beacon Residential ruling, the Court rejected the application of earlier case law in which design professionals avoided liability under circumstances where they only made design recommendations or prepared plans. The Court noted that in this case, the architects were the principal professionals on the project and the developer relied on the architectural firms’ expertise in making final decisions. The Court also recognized the “presumptively powerless” position of consumers in its finding that the architectural firms owed a legal duty to future owners.
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