What is this supposed “fiduciary” responsibility that architects are supposed to have with their clients and just what does it really mean? Is it some kind of oath they take when they finally get licensed by AIA or is it something contractual and if so in what contract agreement is it actually spelled out?
Part 2, do contractors ever have this same”fiduciary” responsibility, or if they don’t should they?
Replies
"Fiduciary" deals with financial issues. For example, when an employer has a retirement plan for his/her employees, they have "fiduciary liability" for those funds that are earmarked for them. They have Fiduciary responsiblity for any funds that are being withheld and deposited/transferred to credit union, IRS, etc. Often, there is bonding involved with this responsibility.
Main Entry: 2fiduciary
Function: adjective
Etymology: Latin fiduciarius, from fiducia confidence, trust, from fidere
: of, relating to, or involving a confidence or trust: as a : held or founded in trust or confidence b : holding in trust c : depending on public confidence for value or currency <fiduciary fiat money>
If you hold funds for a project, then you have fiduciary responsibility for that money. Other than that, I am not sure. Maybe Golden Wrecked Angle will comment, he is an architect.
A fiduciary is a person in a position of special trust or confidence. As applied to architects, it is based upon an architect who is retained as a professional to represent an individual, and the individual has a right to rely upon the architect's exercise of his professional discretion and ability in the individual's interest. The architect must exercise his professional judgment in the individual's best interest. In other words, the architects job is not to be "fair" to everybody, but to represent the person paying him to serve as architect. It does not necessarily relate to finances, though it could and often does. It primarily relates the nature of the relationship, and creates a special obligation of trust.
SHG
makes sense to me! well within the definition I posted. thanks.
In general terms I already know what a "fiduciary" responsibility is and what it represents but maybe what I am asking is why is it always mentioned in terms of architects and not the contractors? Don't we or do we have a fuduciary responsibility and if we don't have one why don't we have one while architects do? In other words what makes architects different or special?
sorry, I misunderstood your question. I know they need bonding and workman's comp, in most states, but I am not in a position to answer your question as to the difference or similarity between an architect and contractor with respect to fiduciary responsibility. Maybe the guy who responded to me will know???
As a contractor, you do not have a fiduciary relationship. You have a contractual relationship, meaning that your obligation is limited to what you have agreed to do, but no more.
I will tell you the reason, but some here won't like it. If you don't, don't blame me. I'm just the messenger. And I won't argue the point.
The architect has a fiduciary relationship because he is a license professional who, by virtue of their license, is given a monopoly in the performance of their professional functions. Contractors are not. While some have licenses, and some have specialized education, etc., there is no uniform testing requirement and internal organization and code of ethics to which all must adhere upon pain of losing their license.
In case you find the foregoing insulting, bear in mind that having a fiduciary relationship is an additional burden, not a benefit, for the architect. It makes him liable for malpractice, for example, which a contractor is not. So, it isn't all bad.
SHG
understood. Thanks.
SHG while I am in agreement with 99.9% of you legal explanation (and geez what do I know about law, I'm just a contractor) I was under the impression that the fiduciary responsibly that architects take on was contractual (or at least I'm thinking it's also reiterated in contract language). I seem to remember somewhere in the the last few months that language regarding the fiduciary responsibly appears in one or maybe several of the standard AIA agreements.
And to dig up the Construction Management topic again from the other day under certain CM agreements a CM when acting as an agent of the owner takes on this fiduciary responsibly so under those contractual conditions a contractor (in that case a CM) does take on a fiduciary responsibly.
View Image
ParadigmProjects.com | Paradigm-360.com | Mac4Construction.com
MY understanding (and I may be a bit rusty on this) is that a fiduciary relationship may be created by contract OR imposed as a matter of law (and/or as an outgrowth of the very relationship entered into.
For example, the trustee of a trust will always have a fiduciary relationship to the beneficiaries of the trust.
A contractor could be deemed a fiduciary if the contract called for that relationship, but I can't imagine why anyone would want that sort relationship in a contracting situation.
I don't understand it to arise from the fact of licensing, as SHGLaw said, but that could easily reflect a void in my knowledge.
Here is a discussion from the National Society of Engineers site that reflects the understanding I have:
"In June, a jury in Alameda County, California, ordered the St. Louis-based HOK to pay $7 million in damages for a leaky curtainwall system to the owner of a 27-story office building in Oakland. The jury found that leakage significantly diminished the value of the building. Prior to deliberations, the state court judge instructed the jury that under the typical American Institute of Architects owner-architect agreement, HOK had a "fiduciary responsibility" to the building's developer during construction. A fiduciary responsibility is the highest standard of duty implied by law and is a much higher standard of care than A/Es are traditionally expected to meet.
"In the vast majority of cases, A/Es are liable for professional negligence only if they fail to meet the "professional standard of care"—what a reasonably prudent design professional would have done under the same or similar circumstances. Under a fiduciary standard, design professionals would be expected to place their affairs in a secondary position to their client's, or risk liability. HOK and others in the design professions are concerned that the case could redefine the legal standard to which A/Es in California, and possibly other states, are held."
[Emphasis added]
http://www.nspe.org/liability/in2-hok.aspGod never gives us small ideas.
Sojourners: Christians for Justice and Peace
You're not wrong. But while an architect also has a contractual relationship, he cannot contract away his fiduciary responsibility. That follows the architect to every job, regardless of what the contract calls for. It's an inherent part of being an architect.
As for the CM contract, I see no reason why a CM cannot create a fiduciary obligation. I also can't see why someone who isn't required to be a fiduciary would want to. You don't get brownie points for it, if you know what I mean.
SHG
SHGLAW - "But while an architect also has a contractual relationship, he cannot contract away his fiduciary responsibility. That follows the architect to every job, regardless of what the contract calls for. It's an inherent part of being an architect."
Okay that all makes perfect sense to me, especially the part about how they CAN"T contract away the responsibility.
View Image
ParadigmProjects.com | Paradigm-360.com | Mac4Construction.com
I'm sure I only have part of this right, just being a builder<G>...I was under the impression some architects put themselves in a position fiduciary responsibility by designing to meet a client's specified budget. I know a bunch of "designers" who should be flogged with this responsibility LOL.
Point is, I've been contacted by contractors or architect or designers who have potential clients, who have architects (or designers), who have said their plan could built for x bucks. When all the bids say X X X bucks(read that triple X bucks), the architect/designers are the ones who act so surprised, pull all the subs in off of jobs that are paying to work on the numbers, and so suddenly get concerned with the "where do we cut costs?" I figure that's their job, I'm just a simple craftsman, who also wants to retire comfortably someday. Call me when you quit tripping over your peters...I dunno, I've been offbase before... Don't worry, we can fix that later!
I thot it had something to do with architects pretending to know how much something should cost in the beginning ...
then pretending they didn't know it would cost so much in the end?
Jeff
Thanks for that clarification SHG and everbody else too. That helps clear up a lot of questions I had on that. Great forum!