Architect's fees

[edit] Introduction

Fees charged by architects vary very significantly, and since the Royal Institute of British Architects (RIBA) abolished its indicative fee scales, there is very little benchmarking information freely available.

Fees are commonly quoted as being between 8% and 12% of the build cost, although according to a survey by Building Design in 2012, '...only 21% of architects achieve fee levels of above 5% while 55% are paid fee levels of 4% or less...'. A more recent survey by the Architects' Journal in 2017 reported fee levels of between 2.75% and 15%.

However, as fees are entirely dependent on the nature of the project and the circumstances of the appointment, these figures are not very illuminating.

Generally speaking, large new-build projects in rural areas attract much lower percentage fees than small works to existing buildings in London; commercial work attracts lower fees than private residential work, and works to historic or listed buildings attract higher fees.

Fees will vary based on:

• The architect appointed (a 'signature' architect may charge more than an 'unknown').
• The type of building required.
• The size of building required.
• The complexity of the building required.
• The quality of the building required.
• The location of the architect and of the project.
• The amount of bespoke design required.
• The level of service required (from basic planning drawings, through to a full design service, site inspection and post occupancy evaluation).
• The amount of information available (including the nature of the project required, the project brief, the feasibility of the project and the site conditions).
• The level of experience of the client.
• Compatibility of the project with the business goals of the practice.
• The state of the economy (in times of recession, architects may struggle to find work, and can offer lower fees simply to keep work flowing through the office; conversely in boom years, they may not have enough staff to meet demand and so will push fees up).
• The perceived risk to the architect of undertaking the project.

Attempting to save money by driving fees down can be a mistake for a client. Fees represent a small part of the whole-life costs of a project, but poor design can have a long lasting and expensive impact. This is sometimes demonstrated by reference to the following notional, relative costs illustration of a typical project:

• 0.1 to 0.15 for design costs (ref. OGC Achieving Excellence Guide 7 - Whole-Life costing).
• 1 for construction costs;
• 5 for the building's maintenance and operating costs during its lifetime, and
• 200 for the cost of operating the business during the lifetime of the building.

(Ref. Report of the Royal Academy of Engineering on 'The long term costs of owning and using buildings' (1998)).

However, this has been criticised as misleading, not least because the construction industry accounts for around 7% of GDP, implying a much more significant proportion of business costs than the ratio suggests. Other ratios of construction-costs-to-operational-costs-to-business costs have suggested figures as low as 1:0.6:6 for some types of buildings. However, the usefulness of these ratios is questionable, other than if they are calculated based on actual figures for specific businesses.

[edit] Fee types

There are three standard ways an architect may charge:

• A percentage of the build cost. This requires that an approximate build cost can be estimated (so that an appropriate percentage can be calculated) and that the scope and nature of the services required from the architect are known.
• Lump sum fee. This is popular for home owners and small clients as it gives certainty about the total cost at the outset. Lump sum fees are appropriate where the scope of work required is well known when the appointment is made. If the nature of the appointment or of the project varies beyond agreed limits, then the fee may need to be re-negotiated.
• Hourly rate. This is generally reserved for work where it is difficult to define the scope of services required or the nature of the project when the appointment is made. It is important in this case that fees are capped to a maximum that can be charged without prior agreement and that detailed records of hours worked are kept.

All three methods will generally bring the architect to a similar position. This is because there is a relationship between the type of the project, its build cost and the amount of hours required. Ultimately, the fee quoted is likely to come down to how many hours the job will take multiplied by a charge-out rate.

A survey by the RIBA in 2014 (ref. RIBA Journal February 2014) revealed that the most common methods of appointing architects were:

Smaller practices tended to be appointed mostly by direct appointment (61%), whereas this was less common for larger practices (25%).

For detailed descriptions of the sequence of activities necessary to appoint architects, see the article: Appointment, and the work plan stages:

• Traditional contract: appointment.
• Design and build: appointment.
• Public project: appointment.
• Construction management: appointment.
• Management contract: appointment.

NB: When appointing an architect:

• Always check the Architects Registration Board (ARB) register to make sure they are a registered architect (if they are not, they cannot offer their services as an 'architect').
• Check that the architect has adequate professional indemnity insurance.

[edit] Role of an architect

It is important that the scope of services required from an architect is properly described and is set out in writing, along with an agreed schedule of payments.

Very broadly, the role performed by an architect might include some or all of the following services:

• Assisting the client to prepare a strategic brief.
• Carrying out feasibility studies and options appraisals.
• Advising on the need to appoint other professionals.
• Advising on procurement routes.
• Contributing to the preparation of a project brief.
• Preparing the concept design.
• Preparing the detailed design.
• Preparing planning applications.
• Preparing applications for statutory approvals (such as building regulations).
• Preparing production information.
• Preparing tender documentation.
• Contributing to the assessment of tenders.
• Reviewing designs prepared by others.
• Acting as contract administrator.
• Inspecting the works.
• Advising on the rectification of defects.
• Carrying out post-occupancy evaluations.

If the architect is to perform lead designer or lead consultant roles, this must be clearly agreed.

It is also important to be clear as to what extent expenses are included in the fee, such as travelling, printing costs, model making costs and so on.

[edit] Additional services

Some services will only be undertaken by an architect if they are specifically identified in their appointment documents, otherwise they may not be included within the fee. These are described as 'other services' on some forms of appointment and might include:

• Compiling or editing briefing documents (for example preparing the strategic brief may be the responsibility of the client or an independent client advisor, not the architect).
• Environmental studies.
• Applying for outline planning permission.
• Undertaking negotiations with the statutory authorities or the main contractor.
• Undertaking surveys.
• Undertaking tasks in relation to party wall matters.
• Undertaking tasks in relation to two-stage tendering (such as two-stage design and build contracts).
• Revisions to documents that are required for reasons that are not the architect's responsibility (e.g as a result of changes in legislation).
• Assessment of designs prepared by others.
• Undertaking tasks in relation to disputes or work not in accordance with the contract.
• Preparing a site waste management plan.
• Preparing marketing materials.
• Assisting in raising funds for the project.
• Preparing 'as-built' drawings.
• Providing site inspectors.

This is an amended version of an article created by --Grant Erskine Architects 11:11, 14 January 2013 (UTC)

[edit] Related articles on Designing Buildings

• Appointing an architect.
• Architect.
• Architecture.
• Architectural design.
• Architectural styles.
• Architectural training.
• Appointing consultants.
• Charge-out rate.
• Collaborative practices.
• Concept architectural design.
• Consultant team.
• Consultant team start up meeting.
• Designers.
• Design liability.
• Fees.
• Hiring an architect as a commercial client.
• Hiring an architect as a domestic client.
• Hourly rate.
• Professional appointments.
• Professional Indemnity Insurance.
• Quantity surveyor’s fees.
• Risks in fees and appointments.
• Scope of services.
• Structural engineers' fees
• The architectural profession.
• The role of architects.

[edit] External references

• Achieving Excellence Guide 7 - Whole-Life costing.
• Architects Registration Board.
• Fee survey by Building Design.
• RIBA: Work with an architect.
• RIBA: Earnings survey. 2012
• Report of the Royal Academy of Engineering on The long term costs of owning and using buildings (1998).

Comments

Project specific issues:

• Client - repeat or new (is it an SPV), trust, how much money do they have - check Companies House, who are the stakeholders, cost/quality/time, client brief, scope of works, procurement, contract type, appointment (RIBA principle 2.3 and ARB 4.4)
• Proposals - build cost and programme (benchmarking), complexity, architects' experience, size, quality, repetition, sustainability (RIBA 3.3)
• Planning - historical issues, LA policy, neighbours, change of use, environmental issues, conservation, land law (restrictive covenants/easements), party walls

Practice specific issues:

• Resourcing - staff available, their experience, how long will it take (benchmarking), project lead, technical ability required (RIBA 2.2, ARB 4.2)
• Finances - cash flow, working capital available, monthly payments, tax implications (overseas), PI cover, financial aspirations - new sector/marketing - is it in the businss plan, overdraft facilities (RIBA Guidance note 5 / ARB Standard 8 and 9.1)
• Benchmarking - previous fees on similar projects, fellow practitioners chargers, AJ 100 benchmarking analysis and data, RIBA Business Benchmark Survey