Two years ago we signed practical completion on a commercial development which our client sold to a pension fund complete with a warranty against our services.
We received the following letter last week from the tenant:
'Sir: you will be aware of the much-publicised date change problems which will affect many software and hardware systems on 1/1/2000. By comparison, little has been published highlighting the tremendous implications to computer chips, programs and communication links embedded within products that are now incorporated into modern buildings (examples include centralised building management systems (bms), heating ventilation/air conditioning controls (hvac), fire-prevention and security-monitoring systems, uninterrupted power supply (ups), power distribution and lighting, private automatic bureau exchange telephone equipment (pabx), lifts, access and timelock systems, and vending machines).
'We are mindful,' the letter continued, 'of the substantial impact to our business should these systems fail in connection with the Year 2000 date changing (including the Leap Year in 2000) and therefore seek your assurance regarding the integrity of our premises.
'So as to ensure our continued quiet enjoyment of the premises and the avoidance of any consequential loss to our business, please warrant that before, on, and after 1/1/2000 the accommodation will continue to provide the same functionality and performance levels without fault or without generating errors in so far as any fault or error relates to the year 2000 date change and year 2000 Leap Year up to and including the year 2015.
'Where the full functionality and performance cannot be guaranteed after the Year 2000, we require you to remedy this situation at your own cost and within one month.'
This is not an April Fool's letter - it is serious and may affect you!
My firm won't be providing such a warranty; it was not a condition of our appointment and, as warranties generally set higher standards of duty than under normal contract (and this one certainly does), they should only be provided for additional consideration - and when the scope of the risk is understood.
If such equipment does prove defective (and I am relieved to say that our building meets the year 2000 requirements), it is anyway arguable that the tenant should have ascertained this prior to agreeing the lease.
Any attempt to hold architects responsible for defects of this kind will be complicated. If a specialist consultant for services was appointed independently during the job, the client should look first to him although it is likely (despite clause 4.1.7 of SFA/92) that the architect will be cojoined if any legal action follows. However, if the architect himself provided the advice on services, either directly or by way of a single appointment (one-stop shop) arrangement whereby the services consultant was a sub-consultant, then he is at greater risk.
For those who will face such claims, much depends upon how a 'reasonably' competent architect would have been expected to perform in relation to this issue. Determination of that will take a test case, but I suspect that most architects have, to date, been unaware of this problem. From here on, however, it is different - you have now been warned! So check provisions with respect to year 2000 and electronic management systems for work currently on your boards and on site!