how do architects charge?

How do architects charge.

Understanding how do architects charge a project’s architectural fees is important in moving forward to building your custom home.  Architectural fees are typically dispensed in two stages: the design phase and contract administration phase during construction.  The architect is the lead consultant who manages the: structural, mechanical, electrical, plumbing, fire, energy and quantity surveyor consultants. Architectural design fees can be amalgamated as a lump sum with consultant fees or separately invoiced to you the client.

How do architects charge with percentage fees.

Prior to 2005, the Institute of Architects published a percentage fee guide that architects would use to calculate architectural fees.  Amendments to the Trade Practices Act 1976 had deemed the guide anti-competitive and barrier to a fair market.  In July 2005, the ACCC made a ruling against use of the Institute’s fee guide.  The Institute no longer publishes the fee guide; percentage lump sum fees are still the most common fee structure.  The architectural percentage is on a sliding scale and reduces as the size and scope of construction work increases.  Projects were identified in the guide as either: complex, conventional and simple and costed accordingly.

Lump sum agreements.

Lump sum fee contracts are simple agreements with agreed fixed price to complete a defined scope of work.  Lump sum fee contracts are common in construction but can vary in cost if the agreed scope of work changes.  Factors that determine the architectural lump sum fee include: scope of work, site constraints, architectural specification and labor market forces.

How do architects charge on hourly rate fees.

Simple projects or where the scope of service isn’t defined, an architect may invoice at an hourly rate.  Typically architectural office staff allocate the project time spent and the record the duration on time sheets.  The office then invoices the client on each allocated time as staff have differing charge out rates.  The monetary rate depends on the whether the staff member is a design architect, project architect, interior designer or draftsperson.

Hourly rate fees are used on select services due to developer’s difficulties in budgeting project costs at hourly rates.  Architects would normally charge an hourly rate for initial consultations, feasibility studies or architectural drawing revisions.  Other activities include: revisions outside the lump sum fee scope, site surveys, as-constructed drawings or sketch design.  Hourly rates vary from office to office and experience/seniority level from $100-$400/hour.

Fixed Fee.

Some jurisdictions may call this type a fixed fee.  As a client, you should be wary of fixed fees – even though you have a purported guaranteed fixed price.  There is an awkward conversation later in the process when professional try to win work by cutting fees.  Architectural design work can be left incomplete should the architect’s fee estimate be inaccurate.  If latent site conditions are discovered, an architect cannot continue to work without adjusting the fee.  There are some unenviable outcome if the architect doesn’t return to the client to renegotiate a low fixed fee: Some of the worst case outcomes may include: project delays, costly construction mistakes, lawyer involvement or bankruptcy.

How do architects charge by area?

Charging design fees on area is common in more competitive US jurisdictions and therefore estimated $/square foot.  The demand for $/square foot may have been evolved from the pressure from property developers.  A fatal flaw in these fees, for architects, is the sudden loss of project area to meet budget.  In a recent project, I witnessed the sudden loss of building where the client was unable to obtain credit.  Clients accept this fee modus operandi as clients pay more for a larger home and less for a smaller home.

Architects need to be very cautious of this fee where clients have grandiose ideas that may never eventuate.  Since 1995, I’ve had three projects where couples were designing their dream home in an endeavor to save their marriage.  In hindsight, it may have been cheaper for husbands to engage a therapist rather than a licensed/registered architect.  Depending on jurisdiction, architectural fees typically range from $2-15 per square foot.  Simple projects are at the lower end between $2-5 per square foot.  Custom home builds from concept to practical completion which includes contact superintendence of the builder range between $10-15.