You love Builder Jones's house but hate the location, and Builder Smith can do the same thing for less money. The obvious solution: Take Jones's sales brochure to Smith and ask him to draw up a set of building plans and procure a building permit. The only problem: It's illegal.

You hire an architect to design a one-of-a kind, custom-built house. It gets raves and it's published in the paper. Suddenly, before you know it, someone else has stolen your thunder and is building the same house right next door. Your vanity is hurt, but it's not illegal.

What's the difference in these two scenarios? The ownership of the plans. In the first case, neither you nor Smith got permission from the owner of the plans to reuse them. In the second case, the soon-to-be next-door neighbor did. In both cases, the owner of the plans was not a builder. It was the architect who created them.

This much-misunderstood aspect of home building confuses many people contemplating a new house project. Some grasp of the fundamentals can be helpful.

The architect owns the plans. More important, as the creator of the plans he also holds the copyright, the exclusive legal right to reproduce, publish and sell them. This means you cannot legally use the plans without his permission. In the case of a one-of-a-kind custom-built house, the thousands you are paying the architect in design fees actually cover his professional services, his expertise and a "one-time use" of the plans to build your house. And, because he holds the copyright, he can extend the "one-time use" to someone else.

With a tract-built house, the architect designs the house for a specific builder, and each time the builder uses the design he must have the architect's permission. A large home-building firm may have its own in-house architect; in this case it would own the plans.

Copyright or not, many home plans seem to be of such a generic nature that you might reasonably think: How could anyone tell if you "borrowed" one?

According to copyright lawyer John Cooney of North Aurora, Ill., who has represented both builders and architects in copyright infringement cases, the plagiarized work does not have to be startlingly new and different, nor does the knockoff have to be identical. It only has to be substantially similar. Though you may move a door, add a few more windows or bump a family room out another foot, the house may bear a striking similarity to Builder Jones's. If he can demonstrate that you signed the visitor's log at his model and took one of his brochures or that you met with him and discussed the project at length, he can make a case for copyright infringement, Cooney said.

Cooney also explained that the copyright issue more often comes up between builders rather than between a buyer and builder because "builders stealing plans from each other is very common." If a plan is "hot" and "really sells," the competition wants a cut of the action.

Although many buyers and even some builders regard stealing a plan as a minor theft of no consequence, the plan in fact represents a considerable investment of a builder's time and money.

Maryland home builder Bob Goodier said that a small firm such as his typically spends four to six months of staff time and $30,000 in architectural fees to get a new product up and running -- "devising a new plan and then redoing and redoing it until you get all the bugs out." For a large national firm, the marketing surveys, focus groups and endless plan revisions can take as long as 12 months and chew up hundreds of staff hours. The architectural fees can be more than $50,000.

Plan theft is most often accomplished by lifting a plan set from the job site -- they're always lying around -- or getting one from a subcontractor that the builders use in common. The aggrieved builder finds out when his electrician tells him, "I was just in Builder Smith's house and it's exactly like your model."

To prove that a plan has been stolen, some builders purposely incorporate errors. The mistakes won't be obvious, and the builder who steals the plan will build them in. When asserting theft, the aggrieved builder can point to them as proof.

Since the copyright law is a federal statute, violating it is a federal offense and the maximum penalty for each infringement can be as high as $150,000. In addition to stiff fines, the builder who stole the plans may suddenly find his operation shut down and his buyers in legal limbo -- they've paid for houses they can't occupy. In one case, Cooney's builder client, accompanied by U.S. marshals, seized 13 houses until the case was resolved.

"You should always ask the builder, 'Is this your plan?' If the builder says, 'No,' you should run," Cooney advised. "If the builder says, 'yes,' you should still insist on a rider in your contract stating that the builder represents that he is the copyright holder, or that he is an authorized licensee to use the architect's plan to construct your house."

When you negotiate with an architect, Gaithersburg real estate lawyer Jim Savitz advised discussing who owns the plans at your first meeting. Savitz said he would want exclusive rights; that is, he would want to own them "so I have access anytime, I can use for any purpose, including modification at a later date." He said, "I don't want to have to ask for permission for this." When you own the plans, you also protect yourself from seeing your house built in your neighborhood or anywhere else. If the architect grants you exclusive use, though, he may charge more.

If the architect won't agree to give you ownership of the plans, you may still get him to agree that he won't allow your house to be built within a specific geographic area or that he won't allow reuse as long as you own the house.

At that first meeting, Savitz said you must also discuss the possible termination of the contract, similar to a prenuptial agreement before a marriage. If you have a falling-out, you want the right to take the work done to date and have it completed by another architect, and you want to limit payment to what has been done. Depending on when your relationship ruptures, the work to date may be design sketches, more fully scoped-out floor plans or detailed construction drawings and specifications. If you don't have such an agreement, the architect can keep everything because he owns the design, and you will have to start from scratch with a new person.

Your lender will also want an assignment of the right to use the plan as part of its agreement to finance the construction loan, Savitz said. If you default, the bank wants to assume your "one-time use" of the plans so it can finish the job, sell the house and get its money. If you are working with a builder, the lender will want a similar assignment of the builder's right to use the plans so that it can bring in another builder to finish the job, Savitz added.

Why does the architect care who owns the plans? As a musician wants to collect royalties, an architect wants to be compensated for his work. If the plans are reused, he wants to be paid.

Also, the architect wants to have control over where the work is built to avoid liability issues. If he designs a house for the desert and his client decides it would also look great in the mountains and builds it there, the snow loads on the roof could cause a structural failure. In this unhappy event, through no fault of his own, the architect would be dragged into a contentious lawsuit before eventual exoneration.

On aesthetic grounds, most architects who design a house for a specific site would be distressed to find the house plunked down somewhere else without their knowledge.

Katherine Salant can be contacted at Salantques@aol.com

{copy} 2002, Katherine Salant

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