Not all client requests are easy to address or resolve, particularly when it comes to payment certification. This article considers two similar scenarios based on past OAA Practice Hotline calls:

• Scenario 1: It is the client’s policy, as written in the construction contract, not to pay for products or materials until they are fully installed in the building. The client’s project manager (through a representative on their staff) wants you to certify payment for windows that have not yet been manufactured in the United States. The project manager expects to expend his full budget before the end of the client’s fiscal year.

• Scenario 2: The project is nearing substantial performance and the client asks you to certify payment for the full amount of the construction contract. The contractor will cooperate by submitting an invoice for the full amount. The client is asking for this because the time frame within which the funding is available for the project expires in less than two months and additional funding may not be available after that.

What would you do? What would you advise the client? How would you minimize risks for the project and your practice? (Note: These scenarios are loosely based on probable situations that may occur in practice and do not account for all factors. Consider consulting legal counsel for your own unique project issues.)

Analysis: Items to Consider
Here are some thoughts and questions for these scenarios which relate to contractual obligations, obligations under the Architects Act, risks, professional liability insurance, and other related considerations:

1. Reviewing contractual obligations before acting on the request
While clients can and do change policies during the course of a project, that alone is not sufficient to change the construction contract that is being administrated. A change order would be necessary to alter the contract. This should not be difficult, as contractors would be expected to agree to getting paid sooner.

To a large extent, what the contract allows to be paid for is an attempt to change the subject and divert attention from the issue. It has no bearing on the true issue under consideration, which is the integrity of payment certification. Payment certification is described, in part, in OAA contracts as follows:

“… receive and assess contractor’s applications for payment; determine the amounts owing to the contractor under the construction contract based on the Architect’s observations and evaluation of the contractor’s applications for payment having factored percentage of completeness against the contractor’s schedule of values, and issue certificates for payment to the Client …, in the value proportionate to the amount of the construction contract, of work performed and products delivered to the Place of the Work.”

This connects the payment certificate to reality, and creates the expectation that the amount payable has a direct relationship to the value of the work properly completed.

2. What is real and what is not: Certify what you can see in person
If the client is requesting a certificate for payment that is not connected with reality, even if it is in the client’s short-term interests, it is quite likely that—should the client suffer any damage from a holder issuing a less than accurate certificate—the client would take action to recover those damages from the holder.

The argument presented would likely include the position that they were just the owner, and they had retained the holder and were relying on the experience and professionalism of the holder to, in part, protect them from themselves. By agreeing to issue a less than accurate certificate, the holder had failed to protect the client.

3. Are construction delays a valid reason to provide inaccurate certificates?
Requests for inaccurate certificates for payment often come about after delays in the progress of construction, or when the client or contractor faces milestone dates related to project financing or to bonuses and penalties. Such milestone dates should be reviewed with the client early in the project and, where appropriate, indicated in the tender documents and carried over into the contract documents.

As delays occur during construction, the potential impact should be reviewed with all parties, and the contractor asked how they will bring the project back onto schedule.

4. Remain fair, impartial, and professional: How inaccurate certification could result in a complaint against a holder
It is normal to want to support your client, but holders should resist any attempts to make problems they did not cause become their responsibility to solve. Where possible, holders should contribute to the resolution of project problems—provided it is within the scope of their contract and they remain fair, impartial, and professional.

For reference, the requirements of Regulation 27 include the following shortlist:

42. For the purpose of the Act,
“professional misconduct” means,
9. Failing to maintain the standards of practice of the profession.
10. Failing to maintain the performance standards of the profession.
15. Signing or issuing a false or misleading certificate, report or other document.
39. Failing to perform architectural services with reasonable skill and judgment.
46. Failing to act fairly and impartially between the parties to a contract that the member or holder is administering.
53. Failing to carry out the terms of a contract to provide architectural services.
54. Conduct or an act relevant to the practice of architecture that, having regard to all of the circumstances, would reasonably be regarded by members of the Association as disgraceful, dishonourable or unprofessional.

Depending on the details of any specific situation, one or more of these items could be included in a complaint against a holder relating to improper payment certification.

5. Could inaccurate payment certification impact my coverage under PLI?
Note that agreeing to falsify a certificate for payment is a deliberate act, and therefore could be excluded from coverage under professional liability insurance coverage. Any liability resulting from such an act will be the responsibility of the holder. Liability could arise in several ways, including:

The contractor or a subcontractor, having been paid, could decide it was not worth the effort to complete the work. This is a main danger of over-certification. The client would then look to recover from the holder.

If the funding organization notices a discrepancy in the expected cash flow rate, they may investigate, which could result in looking for potential fraud.

Additional Reading Materials/Resources
Architects Act & Regulation 27
Canadian Handbook of Practice - Chapter 6.6 : Construction Contract Administration and Field Review
OAA 600-2021 Contract and Guide
OAA 800-2021 Contact and Guide
CCDC Contracts and Guides
FAQ.25 Certificates for Payment and Statutory Declarations