RIBA. A Client s Guide to Engaging an Architect. May 2004

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1 RIBA A Client s Guide to Engaging an Architect May 2004

2 -~ ~ Royal Institute of British Architects First published November 1994 Revised 1999,. Updated 2000,2003 Revised ISBN Product Code: ,_.. I...-,.. -. All rights reserved. No part-of this publication may be reproduced, stored in a m the British Library.... I..... _ I_ ractice Department,.... RIBA....,,.. I...

3 Introduction This Guide provides an introduction to the services that an architect can provide. It also outlines the requirements for the client-architect agreement and to the various factors affecting the amount of the architect s fee. It is important to note that there is no standard or recommended basis for calculating the fee, as the fee is dependant on the specific requirements of the project and the client. A sound working relationship between client and architect will contribute significantly to the success of a project. Time spent in preliminary discussion about the requirements, the timetable, the budget, and the nature and cost of professional resources required and their cost is time well spent. The architect can provide a range of services. For a building project, these begin with investigating the feasibility of the requirements, developing design proposals, applying for statutory approvals, preparing construction information, obtaining tenders for building work and administering a building contract. The architect works with a broad palette of skills and can provide or arrange other services connected with the project such as interior design, landscaping, or making measured surveys of a site or building. The architect s skills are not only relevant to whole building projects but also may be applied to related issues, including such diverse matters as strategic planning of property development for a company and the design or selection of furniture and fittings for the client s home. The architect is obliged, of course, to work within the law relating to construction work, such as complying with building regulations, planning, party wall and health and safety legislation and relevant common law restraints. The architect will advise on the steps that must be taken to ensure compliance, and on the need for approvals. Architects can make submissions and conduct negotiations with statutory bodies, but obviously cannot guarantee outcomes beyond their control. Health and safety requirements in design and construction are governed by the Construction (Design and Management) Regulations (CDM). If the architect advises that the Regulations apply to the project a Planning Supervisor must be appointed in accordance with the law. The architect may be separately appointed by the client for this role under the RlBA form of Appointment as Planning Supervisor (PS/99). I If it is decided that a contractor should be made responsible for the design as well as the construction of the project - the design and build option: the client may benefit from the services of an architect in specifying the requirements in the building contract, or the contractor may appoint an architect to develop the design. In either situation, the appointment of an architect can be covered by published amendments to the standard forms. A Client s Guide to Engaging an Architect, May

4 The client-arc h itect agreement A member of the RlBA is required by the Code of Professional Conduct to record the terms of any appointment before undertaking any work and to establish that adequate competence and resources will be available. It is in the interests of both parties that they understand their agreement, which should define and record precisely the services to be provided and identify associated costs, fees and procedures. For this reason it is advisable to use a standard form of appointment. RlBA publishes a range of standard forms of appointment suitable for use with projects of all sizes and complexity. These include: Standard Form for the Appointment of an Architect (SFN99) uses a memorandum of agreement. Conditions of Engagement for the Appointment of an Architect (CW99) uses a letter of appointment. Small Works (S W/99) uses a letter format. Suitable for works not expected to exceed f 150,000 in value. Under these forms both parties give undertakings set out in the agreement and briefly described below. The printed conditions are not lengthy and will repay careful reading. An agreement will normally comprise: Project specific matters recording the requirements, the services to be provided, fees and expenses. Conditions or undertakings of the parties governing their contractual obligations (see facing page). If other consultants or specialists or site staff are required for work outside the normal expertise of the architect it is advisable that the arrangements are made concurrent with the appointment of the architect. Generally the architect will retain copyright of their work in accordance with the law. The client, however, is given a conditional licence to copy and use information produced by the architect for the project. An additional fee may be payable if the design is to be repeated on other projects or sites, for instance where a design for a house type is to be repeated by a contractor on various sites. The architect is required to maintain professional indemnity insurance in respect of their liability to their clients. The amount of the insurance cover and period of liability to be available for the project are agreed and specified in the agreement. If the client finds it necessary to postpone work on the project, provision is made for the architect s services to be suspended on 7 days notice and for their resumption within six months. If the client defaults on payment of fees or fails to comply with the CDM Regulations the architect also has the right to suspend the services. It is also possible for either client or architect to determine the agreement on the expiry of reasonable notice.

5 The client-architect agreement Should a dispute or difference arise between client and architect that cannot be resolved by negotiation, there are several options for involving a third party to help resolve it: by using the RlBA Mediation Service; by an adjudicator, in accordance with a statutory right to this rapid procedure; by an arbitrator in a private process or in the courts. The undertakings in a standard client-architect agreement c The Architect The architect undertakes to: use reasonable skill and care in performing the services required, in conformity with the normal standards of the architect s profession; keep the client informed of progress and on issues affecting time, cost or quality; co-operate with any other appointed designers and/or the planning supervisor; 0 obtain appropriate professional indemnity insurance cover; only make material alteration to the services or the approved design with the client s consent, except in an emergency; and only assign or sub-contract any obligation under the agreement with the client s consent. The Client The client undertakes to: advise on the relative priorities of the client s requirements and to provide necessary and accurate information; appoint other consultants and specialists required under separate agreements; comply with the CDM Regulations where applicable; take decisions and respond promptly to approvals sought by the architect; instruct the architect about submissions for statutory and other approvals; pay the fees, expenses and disbursements due and VAT where applicable; and employ a building contractor under a separate contract, if proceeding with construction work. A Client s Guide to Engaging an Architect, May

6 RIBA Plan of Work The RIBA Outline Plan of Work divides the design and construction process into convenient Work Stages. Architect s services and fees are usually based on these work stages. Feasibility A Appraisal Identification of Client s requirements and of possible constraints on development. Preparation of studies to enable the Client to decide whether to proceed and to select the probable procurement method. B Strategic Brief Preparation of Strategic Brief by or on behalf of the Client confirming key requirements and constraints. Identification of procedures, organisational structure and range of Consultants and others to be engaged for the Project. Pre-Construction C Outline proposals Commencement of development of Strategic Brief into full Project Brief. Preparation of outline proposals and estimate of cost. Review of procurement route. D Detailed proposals Completion of development of the Project Brief. Preparation of detailed proposals. Application for detailed planning approval. E Final proposals Preparation of final proposals for the Project sufficient for co-ordination of all components and elements of the Project. F Production information F1 Preparation of production information in sufficient detail to enable a tender or tenders to be obtained. Application for statutory approvals. F2 Preparation of further production information required under the building contract. G Tender documentation Preparation and collation of tender documentation in sufficient detail to enable a tender or tenders to be obtained for the construction of the Project. H Tender action Identification and evaluation of potential contractors and/or specialists for the construction of the Project. Obtaining and appraising tenders and submission of recommendations to the Client. Construction J Mobilisation Letting the building contract, appointing the Contractor. Issuing of production information to the Contractor. Arranging site handover to the Contractor. K To practical completion Administration of the building contract up to and including practical completion. Provision to the Contractor of further information as and when reasonably required. L After practical completion Administration of the building contract after practical completion. Making final inspections and settling the final account. 4 A Client s Guide to Engaging an Architect, May 2004

7 Architects fees and expenses Fee options The fee is a matter for negotiation - there is no standard or recommended basis for calculation, but before the fee can be agreed, client and architect should establish the requirements, the services to be provided, the procurement method, an approximate construction cost and the timetable. Work in alterations or extensions or to historic buildings will usually be more demanding than work on a clear site. In proposing a fee the architect will allow for the resources required taking into account factors such as the complexity of the project and, where appropriate, an addition, above actual costs, for the architect s conceptual skills on which the success of the project will be realised. Complexity does not only relate to technical aspects but also to any need that requires a proportionally high level of resources (eg individual houses). Larger projects may offer more opportunity for efficiency savings. RlBAforms of appointment provide a number of options for the calculation of the architect s fee, ie: a quoted percentage of the final cost of the building work, or 0 a fixed or calculated lump sum or sums, or time charges, or another agreed basis. Percentage basis Lump sums In this option the fee for normal services is expressed as a percentage of the final construction cost and is best used for clearly defined building projects. Fixed lump sums may be suitable where the requirements, time and cost are clearly defined from the outset. Then, if these vary by more than a stated amount the lump sum itself may be varied. Calculated lump sums are calculated from previously agreed percentages, either when the design and estimated cost have been settled (at the end of Stage D of the RlBA Plan of Work) or at the commencement of each stage based on the latest approved cost. This option may be beneficial where the requirements cannot be predetermined or where there are inflationary or deflationary pressures in the market place. Time bask Value added Expenses Payment This option may be appropriate where the scope of the services cannot be reasonably foreseen or does not relate to the cost of construction, or for additional services such as for surveys, feasibility studies, protracted planning negotiations, party wall services, etc. Fees can be based on the value added to a project by the architect s services. This can be calculated as a percentage or lump sum proportion of the gross margin (ie the increased value of a building or site less the development costs). In addition to the fee, expenses may also be chargeable for the cost of copies of drawings and other documents, travel costs and accommodation, etc. If the architect agrees to pay the fees that must accompany applications for building regulations or planning approval, such disbursements will also be chargeable, perhaps with a handling charge. Accounts for instalments of the fees and expenses will normally be issued monthly for payment within 30 days. Fee payment instalments can be related to completion of work stages of the RlSA Plan of Work. If required regular payments can be budgeted over a period with a review at completion of, say, all the pre-construction work stages, or fees may be paid at the completion of each work stage. A Client s Guide to Engaging an Architect, May

8 Architects fees and expenses Proportion of fee by work stage Clients often require architects services for only selected work stages from the RlBA Plan of Work. The typical proportions of the total fee for Work Stages C to L are shown in the following table. Work Stages A and B (Appraisal and Strategic Brief) are normally carried out on a time charge basis and are therefore not included in the following percentage figures. RlBA Plan of Work Stage Proportion of 100% fee C Outline proposals 1 0% - 15% D Detailed proposals 15% - 20% E Final proposals 20% F Production Information 20% G-L Tender and Construction 25% - 35% Design and Build Building vpes - range of complexity Fees for projects procured by the design and build method will reflect the extent of the architect s services prior to the appointment of the contractor, who completes the design and is responsible for its construction. If the information to the contractor includes only the brief, and perhaps a feasibility study, the contractor will provide the services in Work Stages C to F. If the information includes a design and full planning permission, the contractor will provide the services in Work Stages E and F. In each case the architect s fee may be reduced appropriately and the contractor will include a charge for the design work in the tender. The level of architects services and the resultant fees increase with the complexity of the type of building. Typical building types and their degree of complexity for each of these types, are shown in the following table. Bulldlng Type Slmple Average Complex offices Multi-storey and underground Banks car parks Office developments Telecom and computer buildings Research and development laboratories Radio, TV and recording studios lndustrlal Barns and sheds Purpose-built factories and Food processing units Speculative factories and warehouses Breweries warehouses Animal breeding units High risk processes Transport garages Retall Speculative retail Food retail Department stores Non-food retail Shopping centres Garagedshowrooms Community bulldlngs Community centres Branch libraries Schools Ambulance and fire stations Police stations Prisons Postal buildings Bus and railway stations Airports Civic centres Specialist libraries Universities Churches and crematoria Museums and art galleries courts Theatres, opera houses, concert halls and cinemas Medical Health centres Hospitals GP surgeries Dental surgeries Public houslng Social housing Sheltered housing Housing for single people Special needs housing Residential care homes Prlvate houslng Apartment blocks Individual housedflats Lelsure Sports halls Leisure complexes Squash courts Restaurants Swimming pools Public houses Hotels 6 A Client3 Guide to Engaging an Architect, May 2004

9 Fee Information - Range of Average Fees The archiiect s fees for a particular project will depend on the specific requirements of that project and the client. The following graph shows the broad band within which architects average charges have generally fallen for a wide range of different new building types. This is expressed as a percentage of the cost of construction for new work procured in the traditional contractual manner (ie the architect providing services based on Stages C to L of the RlBA Plan of Work, administering a competitive tendered contract). This fee information is based on an annual survey of architects fees collected between July 2002 and July 2003*. Note that fees negotiated with clients cover a wide range as shown by the percentages at the upper and lower edges of the graph. The shaded band represents the range of average fees charged by architects but some projects will lie above or below this area. An architect s proposal for an appropriate fee basis for a project (see fee options above) will take into account factors such as those below: The extent of the architect s services and type of procurement. The size and complexity of the building project. The fee level generally decreases as the size of project increases, due primarily to economies of scale. Fees for private housing projects in the survey are generally at the upper edge of the graph. This is generally due to the personal service and bespoke design required for this type of project. Fees for works to existing buildings (refurbishment and extensions) could be up to 60% greater than average fees for equivalent new work depending on the type of work*. Repair and conservation work to historic buildings requires greater resources than refurbishment of other existing buildings. Fees for this type of work can be significantly higher than the fees for equivalent new work. Architects costs and charge out rates depend on geographical location, practice size, reputation and specialist skills. Figure 1 Range of Average Fees for New Works -Traditional Contract Architects Fees 2004 A survey of fees charged by private architectural practices ISBN October An annual survey available from: Mina and Nacey Resealch Southdown House, Ford, Arundel, West Sussex BN18 ODE Tel: (01243) k.net z C i s C Q m 2 6 a, 9 $ dOk dm I Construction cost 1 A Client s Guide to Engaging an Architect, May

10 Legislation and Domestic Projects Legislation Statutory regulations apply to most construction works covering the terms of construction contracts, management of health and safety and the rights of consumers. The architect will explain the impact of these matters when developing the design of the project and the need for approvals from regulatory bodies. Domestic Projects There are particular legislation requirements, for work to the client s home, where the client will be: A consumer to whom The Unfair Terms in Consumer Contracts Regulations 7999 apply; A residential occupier exempt from the provisions of the Housing Grant, Construction and Regeneration Act 7996 (HGCR Act); Exempt from The Construction (Design and Management) Regulations (CDM) 7994; Exempt from The Late Payment of Commercial Debts Regulations The Unfair Terms in Consumer Contracts Regulations 7999 These Regulations will apply if the client is acting in a private capacity for purposes not connected with a business interest, eg as a consumer or residential occupier. The object of the legislation is to offer the consumer protection where the contracting parties might be of unequal bargaining strength and the terms of the contracts have been drafted unilaterally. The architect can explain the implications of this so that the terms are individually negotiated in good faith. HGCR Act 7996 This Act applies to most construction contracts, which also include clienvarchitect agreements. However, the Act does not apply to a contract with a residential occupier that principally relates to operations on a dwelling which one of the parties to the contract occupies or intends to occupy as his residence (S.106). RlBA Form of Appointment for Small Works (SW/99) includes terms that comply with the Act s provisions, which primarily relate to payment arrangements and resolution of disputes by adjudication, but these can be deleted if not required. CDM Regulations 7994 These Regulations relating to health and safety requirements in design and construction impose statutory duties on designers and contractors, but clients for domestic projects will be exempt. Other legislation Other legislation that may affect the project includes building regulations and requirements for planning, party wall and accessibility for disabled persons. The architect can make submissions and conduct negotiations with statutory bodies, but obviously cannot warrant outcomes beyond the architect s control.

11 Fees A Client s Guide to Engaging an Architect May 2004 This booklet provides guidance for clients on engaging an architect, and on professional services, conditions of engagement and fees. Other RlBA Client guides Engaging an Architect Guidance for Clients on Health and Safety The Construction (Design and Management) Regulations nd edition Engaging an Architect Guidance for Clients to Quality Based Selection Ehgaging an Architect Guidance for Clients on Party Wall Procedures I ISBN E D C 6 A

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