Risk Management in Interior Design
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1 Risk Management in Interior Design Presented by: Stephen Polozola Decker Jones P.C 801 Cherry Street, Suite 2000 Fort Worth, Texas
2 Cannot hold out as Registered Interior Designer if not registered If you are registered, must advise: (1) "The Texas Board of Architectural Examiners has jurisdiction over complaints regarding the professional practices of persons registered as registered interior designers in Texas" (2) include Board's current mailing address & phone number (3) be in every written contract for Interior Design services
3 Designer vs. Contractor Design without construction element Limited liability (per contract) Construction Element = General Contractor Liable under construction warranties
4 Why are Contracts important? Set forth the terms of the agreement Statute of Frauds Are designers general contractor? Are designers liable for warranties? Statutory Requirements (residential) Arbitration Change Orders
5 Contracts & Subcontract Agreements Use good form with Owner Subs insurance Named as add l insured Indemnity Certificate of Insurance Warranty obligations mirror Designer Arbitration
6 Contracts Terms Payment terms Deposit, Draws, Final Payment Scope of Work What work performing/not performing Plans/CCR s Utilities Used/Antique Materials Matching old to new?? Access?
7 Contracts Terms Change Orders Allowances Construction Hazards/Trees Insurance Warranty (design work no warranty) Dispute Resolution Right to Terminate Limitation of Damages/Personal Liability Misc. Provisions
8 How to sign a Contract Inc. Polozola Interior Design, Inc. By: Stephen Polozola, its President
9 How to sign a Contract LLC. Polozola Interior Design, LLC. By: Stephen Polozola, its President
10 How to sign a Contract LP Polozola Interior Design, LP By: Polozola Interior Design Management, LLC., its General Partner By: Stephen Polozola, its President
11 Types of Contracts Preliminary Design Contract Residential Design Contract Contingent Fee Residential Design Contract Fixed Fee Construction Addendum Addendum
12 Types of Insurance General Liability Insurance Covers accidents Not warranty Defends and indemnity Builder s Risk Insurance Covers damage to property during construction Cover building not contract price Soft Costs Errors & Omissions Insurance Insurance covered claims for professional liability
13
14 Applies to new construction, remodel, and restoration on Owner s lot Residential or Commercial Requires builder to account to owner for all funds received and spent Contractor shall deposit trust funds into construction account with bank Account must have construction account in title Contractor required to maintain records that provide : source & amount of funds in account & date deposited; date & amount of each disbursement & who paid; current balance of the account.
15 Contractor shall maintain records that specifies direct & indirect costs charged owner. Do not need separate account for each project just need method of account Contractor shall retain invoices & documentation. Contractor may not destroy information until 1 st Anniv. (recommend retain for 12 years)
16 Written notice of claim CMRRR 35 days to inspect 45 days to make offer of settlement 25 days for homeowner to respond 10 days to make supplemental offer Importance of Reasonable Offer! Not Commercial
17 Misc. Topics. Legislative session Mechanic s Liens Lead Based Paint Corporate structure Don t allow the owner to supply materials Get change orders in writing Just because City doesn t require doesn t mean not obligated (vent to Roof/termite treatment) Certificate of Merit
18 Stephen Polozola Decker, Jones, McMackin, McClane, Hall & Bates, P.C. 801 Cherry Street, Suite 2000 Fort Worth, Texas
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