The Claims-Free Architect

When ‘Affordable’ Housing Becomes a Liability Trap

• Pro-Demnity Insurance Company • Season 4 • Episode 8

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In a rural co-op where mold and rot ruin homes, neglect and the lack of a maintenance budget, highlight the cheap construction. Can the architect be liable for this decay, years after completion?

Learn why maintenance matters, how durable construction saves money in the long term, and why empathy often bests arrogance.

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Thank you for listening.

Poverty can be tough on people—large, impoverished families crowded into small apartments, without enough money for daily necessities. But poverty is hard on buildings too. When owners and tenants, don’t have money to spend on maintenance and upkeep, the built environment can deteriorate rapidly—as in this story, which we call “THE PRICE OF NEGLECT.”

The Hastings Housing Association Trust is a government-sponsored private charity whose purpose is to promote and fund decent housing for low-income families outside urban environments. The Fernside Housing Co-op, was an assisted housing project for rural families with little or no income. It was intended as the Trust’s signature contribution to the town of Wayside, Ontario. But as they soon discovered, good intentions, combined with poor decisions, can sometimes generate more problems than they solve.

The idea of providing co-ops for low income and marginalized groups was a noble cause, and the financial model seemed sound: The Co-op would be financially independent, with initial construction costs largely funded by direct grants, with a low debt burden. This left only a slight financial onus on the co-op members. Unfortunately, building maintenance was not included in this financial model.

And so, the strategy of handing the project over to the occupants and leaving care and maintenance to them, was perhaps the Trust’s first ill-fated decision. Were they aware that the owner group consisted mostly of single mothers, unemployed older couples dependent on welfare, and seasonal field workers whose income varied between inconsistent and non-existent? These were individuals who lacked the resources, the experience and the skill to maintain a complex building. 

For the sake of the building and its occupants, what was needed was a permanent management presence and adequate funding. Otherwise, as often happens, with maintenance perpetually “unaffordable” and postponed indefinitely, the building would deteriorate rapidly—which is exactly what happened.

The second unfortunate decision—the selection of the Architect—was a little more complex. Bert Burlington, a principal of Burlington & Strand Architects, was an urbane and impeccably dressed gentleman, and an eminent member of the upper crust of urban Ontario society. In fact, it was one of Burlington’s cronies—a member of the Board of the Hastings Housing Association Trust—that had gotten Burlington involved.

Burlington’s firm had designed a number of condominium projects in the province’s larger cities, so he felt comfortable designing a straightforward low-rise co-op scheme in this “God-Forsaken corner” of Ontario. He did not, however, feel comfortable in a rural milieu, or dealing with clientele whose lifestyle and social conditions he was unable to appreciate. Nonetheless, as a charitable gesture, he agreed to keep his fees low. 

Burlington appointed qualified staff to look after all aspects of the project from design to administration and site review. Bert himself was never required to visit the site, attend meetings, or deal with the future occupants. His only appearance onsite was, briefly, for the ribbon-cutting ceremony. 

He was more than a little surprised when he learned that a Statement of Claim had been filed by the Fernside Housing Co-op, alleging poor construction and inspections . . . Almost 15 years after the building had been completed and occupied.

Based on a recent Engineering Report which was also included with the Statement of Claim, The Housing Co-op was also claiming against the Contractor, the Municipality and the Housing Trust. The Report estimated that the cost of repairs would be approximately $1.2 million.

The issue was maintenance—or rather the lack of it.

Very little had been done over the life of the building. The Co-op owners had no money to spend on their building, and lacked the experience to know what maintenance might be required, or what problems the lack of maintenance might create. All they could be sure of was that, as stated in the claim, after nearly 15 years of use, the low-rise apartments were “falling apart.”

The Engineer’s Report listed the issues that were the subject of the claim. Interior walls were coming apart at the seams due to excessive dampness; black mold was evident in many units, especially around exterior openings; window frames were heavily corroded; and baseboards were rotten. In fact, the whole building smelled of decay, and the poorly maintained ventilation system did not help.

The Report also cited ineffective air barriers, absence of flashings, incorrectly sloped sills, and balconies that encouraged water ingress—along with the usual litany of interior defects: ill-fitting doors, kitchen cabinets falling apart . . . and so on. Proposed repairs included upgraded ventilation, new windows, vapor barrier and drywall replacement, and miscellaneous carpentry repairs.

The gist of the Report was that if the building had been properly designed and constructed in the first place, the maintenance would have been much easier, and affordable. As it was, the report provided estimates of the cost of remedial work amounting to $1.5 million, or around $15,000 per unit.

On receipt of the Claim, Pro-Demnity called Burlington and asked him to come to Toronto, to discuss the matter. The Architect was offended and confused. It had been 14 years since the building was completed and occupied. How could he be held liable for problems that had taken a decade and a half to come to light? 

At our meeting, the Architect’s explanation was not at all helpful. He said that the vapor barriers required by the Building Code, transformed buildings into large plastic bags, sealing all the moisture and heat inside. Since the bulk of the problems appeared to be due to excessive humidity, any resulting damage had to be the fault of the Building Code, not the Architect. 

What’s more, afterall this time, how could he be expected to recall anything relevant to the claim? Over time, records had been thrown out and any of his staff who might have been knowledgeable about the project were unreachable, having either died or moved away. 

But Burlington saved his main, deal-clinching argument for last. No normal building, he stated, could function, given the lifestyle of “these residents,” who, he claimed, had created conditions that could only result in environmental degradation. Crowding six people into one-bedroom units, with mattresses on the floor, these unsavoury occupants, had taken advantage of the unmetered water supply by taking long, hot showers, in bathrooms with cheap plastic curtains in the windows. Also, he proclaimed: “just look at their cooking habits”. Their diet, consisted of “hobo stews” and soups, made from cheap ingredients permanently slow-boiling in cauldrons on the stove, creating clouds of grease and water vapour.

It was a surprising, full-on elitist rant, whose inspiration appeared to have been drawn from a cheap Victorian novel. 

Burlington was going to be a problem in defending this claim. Re-educating a professional sworn to protect the public safety, but proudly displaying an outdated viewpoint, was beyond Pro-Demnity’s mandate. The Claims Specialist pointed out, as calmly as possible, that in her view, and in the view of an overwhelming majority of humankind, these inaccurate generalizations were ill-informed, and not even remotely useful in preparing a defence. 

Burlington appeared to be taken aback, but remained unpersuaded.

As for our co-defendants, each had established its own position.

The Municipality was happy to admit thatthey had, in fact, never reviewed the construction, for the simple reason that it was not their policy. And since the Statement of Claim didn’t allege any Code violations, there was no need to revisit the issue. Their defence consisted of a single paragraph, essentially: “We did nothing wrong.”

The Hastings Housing Association, a charitable Trust, was clearly surprised to be named as a defendant. After all, they had only the co-op’s best interests at heart. They had inspected the work during construction, but only to gauge the progress, in order to make their monthly advances to the Contractor. They didn’t see how this could have created any liability.

The General Contractor had long ceased operations, but the former company owner, Belham Bow was keen to defend his reputation in the community, so he agreed to participate in the negotiations and had engaged his own lawyer. 

The parties were all of the same mind: Instead of taking our chances in court, a pre-Discovery mediation would be the best way to sort things out. 

Instead, it was a fiasco.

At the mediation, the Co-op was represented by a delegation of a half-dozen bad-tempered owners. They were led by Mrs. Marion Swift, a formidable woman, clearly a veteran of many confrontations, a valiant defender of her peers, and someone keenly aware of the injustice of a system stacked against low income working people. She had no problem rising from her chair, interrupting the proceedings at the slightest inclination, and making her views known to all.

As she explained it, loudly and clearly, the tenants were an underprivileged group, unable to muster the resources to maintain their building. Further to that, a recent cut in welfare payments had forced many of them to choose between housing and food—and they had chosen food. Mrs. Swift stated strongly that they should not be expected to pay for repairs that they simply couldn’t afford.

Pro-Demnity’s inspection of the building had confirmed that no detectable maintenance had been performed since the building had been occupied, and this was certainly the source of much of the problem. It didn’t help that exhaust fans in bathrooms and kitchens had also been neglected, contributing to the excessive moisture build-up. 

If vapor barriers and other construction details were in fact responsible for the problems, then workmanship was clearly to blame, and it was the Contractor who was liable. But the General Contractor, a gruff and jovial character, had no liability exposure, since his company had been closed for 10 years. He viewed the whole matter as a trumped-up cash-grab, but he was still willing to chip in $75,000. He even offered to supervise repairs.

The Housing Trust’s lawyer didn’t help matters. Stiff and formal, he was clearly out-of-place in this non-corporate-boardroom setting. Words like “open discussion,” “collaboration” and “compromise” were not in his vocabulary. As comfortable as the plaintiffs seemed to be, he was clearly ill at ease. He bristled at being addressed directly by the plaintiffs and other defendants. He was visibly annoyed when the mediator interrupted his legal soliloquies to remind him that this was not a trial-by-jury, but a mediation, in which informality was expected and appreciated.

The session ended with no agreement being reached. The matter was now destined for trial. It festered for another year or so, until pre-trial Discovery began.

Discovery was next to useless. No one who had been part of the Plaintiff’s group, or who had any memory of the original construction process, or who had participated in events over the following decade, could be produced. We demanded maintenance records and minutes of board meetings over the years—to no avail.

As far as recollection was concerned, the Architects were no more helpful. Fortunately, some drawings and files had been retained, and from these, it was clear that reasonably professional services had been rendered, the detailing was adequate, and the extent of construction review appeared normal. There were no smoking guns. 

The Architect himself, Bert Burlington, had turned up at the Discovery eager to plead his case. The claims specialist had concluded this was inappropriate for several reasons. First, there was the issue of the classist ideologies that he was eager to expound. Second, he was already on reasonably safe ground, so his testimony wasn’t needed. Third, the purpose of Discovery is to avoid long-winded rhetoric and get down to facts, not to explore theories. As it happened, he was not called on to testify, and Pro-Demnity-appointed counsel, using strong persuasive language, prevented him from rising to speak—a fact that frustrated Burlington greatly.

Following Discovery, our defence of the Architect went into high gear. We had hired an expert—a mature architect and experienced expert witness—to look at the situation. His opinion on the quality of the drawings was encouraging. As for the original construction, he couldn’t comment, except to point out that water penetration was often a maintenance issue. Besides, the service life of a good caulking job was about half the time the building had been occupied.

Next, our lawyer put all the evidence under a microscope. Among the unsorted file material, we discovered Site Review Reports listing deficiencies to be addressed during construction. We also found a construction bond for $1.7 million that had, of course, well and truly expired. But it had been alive when the original workmanship complaints had been made—and the Contractor had apparently neglected or refused to remedy the alleged defects. 

By failing to act on the bond, the Plaintiff had breached a condition in the Architect–Client Agreement. It might have been argued that the Bonding Company, acting for the owner, could have sued the Architect, nevertheless, this was a devastating blow for the Co-op’s “rock-solid” case.

In one further attempt to stave off a full-blown trial, the Court ordered a pre-trial hearing, before Mr. Justice Cobley.

Justice Cobley dealt with the issues with practised forcefulness and dispatch. He sympathized with the Plaintiff, but explained to them that they did not have a case for $1.5 million, since a lack of maintenance had to account for at least half the claim. The Architect could not be asked to pay for maintenance, however impoverished the tenants were.

The judge listened politely to Bert Burlington who, contrary to our advice, advanced his theories, thankfully, without the derogatory lifestyle references.

The judge then proposed a $650,000 settlement to be paid half by the Architect and half by the Trust, which he felt had some liability for guiding the group through the construction process and failing to alert them to the conditions of the bond—although we recognized that the same oversight might equally apply to the architect. With no further discussion, the parties agreed, and the judge wrote the Minutes of Settlement.

The case closed.

The lessons to be learned from this episode reflect as much on social issues as professional ones. 

Lesson No. 1: The “lifestyle” issue frequently arises with regard to assisted or low-cost housing. Besides being uncharitable, it shows a disregard for the welfare of those for whom the building is being designed. Architects should always consider the end-users of their buildings and design for their needs, even when—or especially when—their client, the Developer, shows little concern and is only thinking about the immediate bottom line.

Lesson No. 2: Building affordable housing is an extremely urgent matter. Of necessity, it involves a host of cost-saving strategies. But when cost saving only amounts to cost postponement, with the burden of those costs falling on the building occupants, it’s no strategy at all. With maintenance perpetually “unaffordable” and consequently postponed, buildings can deteriorate rapidly. Durability and maintenance should be included in the cost of building. 

Lesson 3: Professional arrogance is never helpful—for designing a building or defending a claim.