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HomeMy WebLinkAboutMMIA Risk Management MA Montana Municipal Insurance Authority PO Box 6669 Helena, MT 59604-6669 NEW �... Please distribute to all appropriate personnel and post in a conspicuous place. Date: December 22, 2000 R.M. Bullet To: All MMIA Program Participants D From: Alan W. Hulse JAN 1 1 2001 Risk Specialist RE: Liability Exposures — Building Departments & Inspectors CITY OF LAUREL This bulletin is an update of a bulletin that was published May 23, 1995, The MMIA continues to experience a number of claims filed against cities & towns for the action or inaction of building departments. Claims include allegations of inadequate reviews of plans and specifications as well as issues surrounding the inspection/failure to properly inspect work in progress. Typically the claimant alleges that the building inspector failed to identify building code deficiencies during the review and permit stage or failed to identify violations during inspections of the construction site. According to Montana Law, Sec. 50-60-106 (1 ), MCA: The examination, approval, or disapproval of plans and specifications, the issuance and revocation of building permits, licenses, certificates and similar documents, the inspection of buildings, and the administration and enforcement of building regulations within the municipal jurisdictional area are the responsibility of the municipalities of the state. (emphasis added) Therefore, a city or town is given the power to review building plans and inspect the construction sites. However, regarding building review and inspection activities, the law is vague. Municipalities are authorized, but not required, to have a building inspector. Sec. 50-60-302 (1 ), MCA states: (1) A county or municipality may not enforce a building code unless: (a) the code enforcement program has been certified by the department as in compliance with the applicable statutes and department certification rules; (b) the current adopted code, a current list of fees to be imposed, and a current plan for enforcement of the code have been filed with and approved by the department; and (c) all inspectors inspecting or approving any installations, which if accomplished commercially require state licensure, must themselves be properly and currently state licensed as a journeymen in the craft or occupation or be certified by a nationally recognized entity for testing and certification of inspectors that is approved by the department before being permitted to inspect or approve any installations. over This newsletter is published as a service to our members. The articles are not a substitute for the Memorandum of Liability Coverage or other coverage documents. All coverage determinations are made on a case-by-case basis,and can only be viewed on the unique facts of the claim presented. This statute goes on to state: (4) If the certification of any local government code enforcement program is revoked for any violation or deficiency, the state resumes its original jurisdiction for state building code enforcement within the municipal or county area and the local government retains the responsibility for completion of inspections and issuance of certificates of occupancy on any incomplete construction projects previously permitted by the local government, unless the reason for the decertification is directly related to the protection of health, safety, and welfare of the public. (5) If a local government voluntarily decertifies its code enforcement program, the department must be given written notification of the intended decertification at least 90 days prior to the date of decertification. The local government retains the responsibility for completion of inspections and issuance of certificates of occupancy on any incomplete construction projects permitted by the local government prior to decertifying its code enforcement program. If your department is enforcing building codes, it is necessary that your program and inspectors be certified in accordance with the State Department of Commerce rules. If your community does not have the resources to conduct building inspections, or meet the Department of Commerce certification requirements, you can opt to either not certify or decertify your program and the State of Montana would be required to assume enforcement responsibility in your jurisdiction. Additionally, your community could opt to adopt only the codes that you are capable of or willing to enforce, have your program certified then the remainder of the codes would fall to the State of Montana to enforce. In accordance with 50-60-302 MCA and A.R.M. 8.70.203, it is also vital to ensure that the codes that you have adopted by ordinance are consistent with the building codes adopted by the State Department of Commerce. Due to the influx of liability claims in the area in recent years, the MMIA strongly recommends language be added to all forms of building permits in an attempt to limit your exposure. Perhaps the best approach is reflected in the following statement: With his/her signature, the below signed Applicant/Owner acknowledges the City of does not control, direct, guide, oversee or approve the Contractor(s) or Subcontractor(s), their agents, employees or crew members in this or any construction processes. Further, below signed Applicant/Owner acknowledges the issuance or granting of a permit or approval of plans, specifications, and computations shall not be construed to be a permit for, or an approval of, a violation of any of the provisions of the Uniform Building, Mechanical, or Plumbing Codes; the National Electrical Code; the City of zone and sign code, Municipal Codes, or any other ordinance of the City of The Applicant/Owner has complete control over the construction process and is wholly responsible for the project's ultimate compliance with the applicable Codes and Ordinances. This disclaimer should be counter-signed by the applicant for the building permit so that the individual acknowledges their continuing responsibility. Please bear in mind that no exculpatory language is foolproof. This disclaimer may not prevent a liability suit from being filed, but it will go a long way in strengthening the defense of a claim filed against a city or town. Additional consideration should be given to the current requirements placed on your building department by your municipal codes. We are aware of several communities that have codes requiring the actions of a building inspector, yet no such position exists on their staff, or they may have a staff position to fulfill the actions, but the duties are not consistently performed. Check all of your codes that pertain to building, permitting, and inspection activities to ensure they are consistent with the way you are currently operating. Another common problem arises in smaller departments where staff is limited. Does your community have a policy or referral process in place to assure that only properly trained staff deals with building department issues even if personnel in the building department are not available? It is not unusual to see a clerk issuing a building permit without any review, or an elected official giving a building permit or worse yet a variance without going through the proper process. Needless to say, these scenarios have the potential to create extensive liability exposure for your community. Your community should have a policy for dealing with these situations. One effective strategy that we've seen implemented is a partnering system with a neighboring community whereby you share the services of that communities building inspector in the absence of yours and visa versa. At a minimum, you should put a policy in place that in the absence of your building official, staff will take the pertinent information and get it to the building official upon his/her return. Remember that the underlying goal of this policy needs to be the avoidance of decisions being made by people who are not trained or qualified to make them. If you have any questions, please call the MMIA at 1-800-635-3089.