This week, Annmarie and I organized, coordinated and began to make the “big move”. If you don’t know about our plans, you may want to read more at an article I shared a couple weeks back.
The new studio is still being constructed, but we have much to do before we need to move anything to back to Chappaqua. After 10 years in the Pleasantville space, we’ve accumulated a room full of material samples, shelves of manufacturer binders, reference books, gadgets and goodies. Times like these are when we need to lose the sentiment and discard or recycle as much as possible. We’re moving from a 2,000 square foot space to less than ten percent of that, so obviously, not everything can be saved.
We spent this weekend sorting our project files and filled dozens of storage boxes. As licensed architects, we may as well be liable for all of eternity. In the state of New York where we practice, there is no statute of repose. There is essentially no limit on when a claim for negligence may be filed against us. It’s one of the hazards of being a licensed professional… and another reason why you may want to raise your fees. (We’ll talk about fees again another day.)
There is no statute of repose in New York for construction claims. A cause of action based on a theory of simple negligence and brought by a third party (i.e., not the owner of a building) against a design professional or construction contractor is governed by a 3 year statute of limitations, and the cause of action does not accrue until the injury occurs. See Cubito v. Kriesburg, 419 N.Y.S.2d 578 (N.Y. App. Div. 1979), aff’d 415 N.E.2d 979 (N.Y. 1980), citing N.Y. C.P.L.R. § 214. There is an additional notice requirement for claims against design professionals (including construction managers that have a design component in their contract) arising out of injuries that occur more than 10 years after the completion of construction. See N.Y. C.P.L.R. § 214-d. Although there is an expedited procedure for claims brought more than 10 years after the completion of the design professional’s or contractor’s work, contractors/design professionals remain answerable to negligence claims commenced indefinitely after project completion. Note, however, that an owner’s cause of action accrues against a builder upon completion of construction. City Sch. Dist. v. Hugh Stubbins & Assocs., Inc., 650 N.E.2d 399 (N.Y. 1995).
You may check the legal limits for your state here.
In order to protect ourselves from a potential future lawsuit, we must retain every document related to the design of every project; every transmittal, every letter and every construction drawing… everything. We cannot predict the future, so we have no choice but to retain any document that may be the one item to prove our innocence.
Retaining Business and Personal Documents
With all the project documents packed and labeled, we then turned to our business and important personal files. The general rule of thumb for retaining personal and business financial documents, sales tax records and supporting documents for income tax returns is to save it all for a minimum of five years. Every document relating to these items from 2008 through today must be packed and added to the pile.
Income tax returns may also be discarded after five years, but since these records are relatively compact, we packed them up and will keep them forever.
We are moving to a small office located in our home. There is limited space for archive storage, so we’ll need to rent local space. Our goal is to reduce expenses to the absolute minimum in order to achieve “debt zero“, so paying for eternal storage is not part of our long term plan. We’ll need to find a better solution.
The Paperless Studio and Digital Storage
As we proceed with the new studio, we will store all future documents as digital files. Throughout the process of design and construction, all correspondence, records and documents will be saved as PDF files and stored digitally. When we complete and close-out each project, copies of the digital files will be stored as archives both locally on a dedicated hard drive and remotely on the “cloud”. No paper copies will be retained.
My hope is to eventually scan all the stored paper documents as well, retain them as digital files and eliminate the monthly storage expense. Many services will convert paper records to digital archives, but it’s not inexpensive. I will need to determine the cost to convert such a massive amount of paper to bytes. It may be more cost effective to purchase a refurbished wide format scanner and hire our kids to operate the technology. Convincing them to contribute to the firm will not be difficult. Our oldest has already researched, prepared and submitted a scanning proposal for my review. No doubt, my entrepreneurial genes are alive and well in the next generation of LePages.
Do you have systems in place to properly retain important records and documents? Are you storing archives in a digital format? Are you running a paperless firm? Please share your thoughts in the comments below. Let’s talk…