If You Read One Article About Cost Of Hiring An Architect In Canada Read This One!

Transcription

1 If You Read One Article About Cost Of Hiring An Architect In Canada Read This One! In this article I m going to reveal the mystery behind the architect fees percentage in Canada. I can say from experience in other countries that this might be very close to a universal guide applicable to most countries including Canada. This article will answer the question: How much does it cost to hire an architect to design a new building or addition? And describe how to calculate architect fees for commercial projects, how to find out the architect fees for residential projects, and how to determine architect fees for a remodeling or renovation project. I hope after reading this article you will be able to calculate architect fees for almost any type of project. Also you will be well-equipped to negotiate your terms and budget with the architect you hire. Ready? Read on and you will learn a lot about the budgeting behind your new dream space!

2 Buildings are prominent objects in our lives. We inhabit most of our waking and sleeping hours in buildings and cannot avoid seeing them. We use them as shelter, for celebrations, for business, the list goes on. You are influenced by what you receive from your environment via your five senses. What you experience from space around you affects you so subtly that you may feel like there is something coming from an unknown source, but the source is not unknown, it is very evident and it is your environment. Your environment has a great impact on you in profound levels and that s why you might not recognize the source and the way it touches you. Our physical environment can affect us in two ways: psychologically and physically. Now, let s see how it happens and how it works. Our physical surroundings can increase or reduce our stress, which in turn impacts our bodies in multiple ways, according to research by the International Agency for Research on Cancer, a component of the World Health Organization. They revealed that hard-to-cure illnesses like cancer can be discouraged by managing the stress level and our environment is the most important source of stress and comfort. Being exposed to the space featuring design, style, colour, lighting, and other elements we are comfortable with helps to manage our stress level. According to the research we can heal ourselves by living in spaces that give us that great feeling of relaxation and serenity. Now let s read about psychological effects and social values that our spaces can add to our lives. Susan Clayton, an environmental psychologist at the College of Wooster, states, For many people, their home is part of their self-definition, which is why we do things like decorate our houses and take care of our lawns. These large patches of vegetation serve little real purpose, but they are part of a public face people put on, displaying their home as an extension of themselves. It's hardly rare in our mobile modern society to accumulate several different homes over the course of a lifetime. Maybe that is why we choose to put the most into our home and do our best to grow with that as a self-identifier within the society we live.

3 Image from: blazepress For better or worse, the places you live in play a significant role in how you perceive your world, how you build your social reputation, how you maintain your well-being, and even factor into how you maintain your wealth. Those are very important issues that should be addressed when you are making the decision to build, renovate, or remodel your residential or commercial buildings. In this regard, the role of an architect is quite noteworthy. Many people consider a design budget when they plan for new build or renovate/ remodel their house or work space. Most are aware of the fact that it pays back through the value they add to a building by designing a layout that not only functions in its best way, but also is energy-efficient, pleasant to view and be active in, and will add market value to the property as well as the neighbourhood. Furthermore, the use of architectural services by a licensed or registered architect is a requirement for many building types as it is required by building codes across Canada. I know you re thinking: I thought you were going to tell me how much it costs to hire an architect? I m getting there! First, I needed to clarify the points that form the other end of a mutual transaction: what you receive and what you give. Now, after reading the rest of this article you have the whole map under your fingertips and are ready to go!

4 The information about cost of hiring an architect to design residential or commercial spaces in Canada, the methods, and the calculation considerations I m going to expose you to is excerpt from The Royal Architectural Institute of Canada (RAIC) 2009 s guide. This guide has been indorsed by Ontario Association of Architects (OAA), Manitoba Association of Architects (MAA), Association of Architects in Private Practice of Québec (AAPPQ), Ordre des Architectes du Québec (OAQ), Architects Association of New Brunswick (AANB), Architects Association of Prince Edward Island (AAPEI), Nova Scotia Association of Architects (NSAA), Newfoundland and Labrador Association of Architects (NLAA), Northwest Territories Association of Architects (NWTAA), and is supported in principle by Saskatchewan Association of Architects (SAA). There are several different methods of calculation of architect fees, but the most common methods are: Lump Sum or Fixed Fee Time basis Percentage-based Fee The architect and the client might choose one or a combination of two or more methods mentioned above. They might agree on one method for one phase of the project and another method for another phase. They are able to negotiate and agree on what works best for the both of them. Now we need to get a bit more into the details of each method to figure out how each works. This part may sound a bit boring, but you need to have a good grasp of each method to be fully equipped when you sit to discuss the fees with your architect. Below is a simplified version of complicated material so please bear with me and read on. 1. Lump Sum or Fixed Fee A lump sum or fixed fee is an amount negotiated with the client for professional services that can be defined at the outset of the project. This arrangement is only suitable if the following variables can be determined by your architect: Scope of the project The schedule for design and approvals The construction schedule Other variables related to the project in all phases When an architect offers a fixed fee it means s/he and consultants have precisely calculated and prepared a comprehensive estimate of work hours and overhead costs. The fee becomes effectively a fixed price unless some changes would apply that are beyond the architect s hand or the client changes their mind; in the case of these changes occurring the fee would be re-evaluated. 2. Time Basis Time basis fees are charged on an agreed-to hourly or daily (per diem) rate. This method of compensation is useful when the services are difficult to determine in advance or they might appear to be short in duration. Time-basis fees are typically used for the following: Services which are not well defined Pre-design services Partial services Additional services Conceptual design For a particular phase of the project, such as general / field review For services as an expert witness

5 Renovation projects Preparation of record drawings Specialist expertise or services The actual hourly rates vary across Canada and by the level of experience, seniority of the architect and staff, and/or the pricing strategies of the architectural firm. Architects are professionals with extensive training (sometimes the internship and licensing process for architects is considerably longer than that for other professionals, including medical doctors or lawyers) and therefore the hourly rates for architects will correspond to the local market, to the architect s experience and expertise, and to the rates of other licensed professionals in the region. Hourly billing can utilize fixed dollar rates (such as $250 per hour) or they can use a fee multiplier. There are two types of multipliers: Direct Salary Expenses multiplier and Direct Personnel Expenses multiplier, the latter being the most common. The hourly or per diem rates for architects and their staff should be agreed at the outset and, additionally, the client and architect should agree upon a time period for review and adjustment of the hourly rates (perhaps annually) in order to adjust for inflation and other factors. 3. Percentage-based fee This is the most common and the most flexible method to calculate architectural compensation in Canada. A percentage-based fee is a method of compensation which links the fee for the architect s services to a percentage of the construction cost of the project (defined below this section). The percentage will vary depending on the type of building, the construction value, and the type of construction contract, and some other variables. This method has the flexibility to be calculated based on the scope of architectural services in two ways: Calculate architectural fees on a net basis excluding all engineering and specialist consultant fees Calculate architectural fees including the normal basic engineering services for structural, mechanical, and electrical engineering Generally speaking, percentage-based fees are based on sliding scales taking into account both the size and complexity of the project and the construction cost. The fee indicated on the sliding scale is the starting point for discussion and both parties will bring up their points and decide on the final figure; it is likely several adjustments might come up during the process. Generally, services are rendered and payments are made progressively. Then when the project is completed the final accounting will be conduct to cover any discrepancy with the original agreed upon total. Construction Costs The construction costs are the basis for calculating the architect s fee when using the percentage method of compensation. It is important for the client to have a full understanding of the terms and definitions for construction costs. Below I try to shed some light on the subject. Construction cost is the total contract amount, including all project elements specified by the architect or an eligible person on behalf of the architect permit fees, contingency amounts, and all applicable taxes. Construction cost should be estimated as determined by the architect at market rates at the anticipated time of construction. Please note that the construction cost is solely extracted and calculated from the construction project itself. It doesn t include the compensation of the architect, the architect s consultants, the land cost, or other costs that are the client s responsibility. Whereas, if you have a construction manager or general contractor their fees are included in the cost of construction.

6 Now that you know what the construction cost is, I m going to show you two options you might choose from when signing an agreement with your architect. Again note that both client and architect should agree on the selected method. Calculated fee is merely based on a percentage of the final construction cost and the fee is adjusted for previous phases to include any changes in the scope of work or any change during the construction process Percentage fee is calculated based on cost estimates as the project progresses and the fee for earlier phases is not adjusted retrospectively If both ends agree on the second approach with development of the project, estimates of the construction cost are further refined until the actual contract price or construction cost is known. The amount usually is adjusted again during construction based on the agreed amounts at the beginning of each phase. So we saw that the architectural services adds financial and spiritual value to your life while it usually costs only 10% of total of all design and construction costs. As I said, if you do a quick calculation you will find out that it is almost 0.01% of the lifecycle costs for owning and operating a facility or home, according to RAIC s 2009 guide. Check out the diagram below: Diagram from: RAIC 2009 Now really, who s afraid of design and architectural costs? Now that you have all this knowledge feel free to share this article written by the experienced people at ASM-Architect with everyone and anyone that may be considering building or renovating their home or business. Sharing is caring! We love to hear from you! Please leave a comment below and let us know how you think about this article. Our audiences and ourselves like to know about your experiences about architect fees percentage and compensation, please share it with us! Cheers, Naz

7 References: Beck, J., The Psychology of Home: Why Where You Live Means So Much?, Atlantic, Online. From < Blazepress, Online. From: < > RAIC, The Value of an Architect, A Guide To Determining Appropriate Fees for The Services of an Architect, pp 4-9. University of Minnesota, How Does Your Personal Environment Impact Your Wellbeing?, Online. From: <