The setting of fees and valuing Architectural work can be complex. Every project for an Architect is unique, requiring a different level of expertise and scope of services. Therefore, the Architectural fee scale can vary drastically.
Initially, the Architect may be asked to help define the project, assess the feasibility and to provide a free proposal when many factors remain unknown.
With this in mind, it is common practice for Architects to set their fee for a project as a percentage of the total construction cost. The downside is that the project may change substantially as the design is developed — but these fees have several advantages, particularly for a project’s design and documentation stages.
In this article, we share five benefits of Architect fee percentage pricing for both the Client and the Architect. Read on.
First, a guide to an Architect’s services
The role of an Architect is to ensure you obtain the best outcome for your building or development while staying on schedule and budget. From the initial consultation to overseeing construction, an Architect will manage all the steps listed in the infographic above.
With this in mind, it is important to remember that Architect fees vary based on the project type, complexity and size. According to realestate.com.au, some Architects are currently charging 5% to 8% of the total construction cost for the design and construction documents for a house. Where the Architect is engaged to be involved for construction, an additional 2%-3% fee will apply.
A common breakdown is as follows:
1.25% Sketch Design
1.75% Detailed Design (Development Applicaton)
3.00% Construction Documents (Construction Certificate)
2.00% Tender and Contract Administration
8.0% Total Fee for All Services
It should be noted that these percentage fees are applicable where the Architect is providing full services i.e. managing all aspects of the project on behalf of the Client.
However, these percentages will vary from Architect to Architect. We recommend discussing these costs with your Architect as every firm varies depending on the scale of the project and the scope of services requested.
Now, into the advantages of Architect fee percentage pricing.
As the project alters through the design stages, the percentage fee payment enables flexibility in the project budget. With any changes to the design, for example, the project becoming larger or smaller, the percentage fee payment enables the adjustment of the fees with these changes. The percentage used to calculate the fee can increase or decrease as appropriate in accordance with the change in project value.
2. Monthly billing
There are mutual cash flow advantages for both the Client and the Architect. By defining the total fee at the beginning, the percentage calculation can enable billing at regular intervals for a portion of the total fee based on progress. A Client can manage their cash flow and not be faced with infrequent or unexpected payments.
Percentage fee payment arrangements place the onus on the Architect to ensure that the project moves along promptly and efficiently. The fee is capped at a percentage of the project cost, so the Architect must work efficiently to derive a profit.
4. Budget efficiency
By establishing a percentage fee payment at the beginning of the design process, the Client can consider these Architectural costs together with all the other projec costs when managing their budget.
5. Ease of calculation
Some large projects may take years to complete. Other fee calculation methods for such a long gestation period can be complex and even lead to disputes. Percentage fee payments can be calculated at any time using the current project value.
Contact Mark Lawler Architects for more information about Architect fee percentage pricing
Percentage fees have been derived from the long tradition of Architectural practice. In many cases, we recommend the percentage fee payment pricing arrangement for a project’s design and documentation stages. However, we consider each Client’s individual circumstances and calculate fees accordingly.
There is not a single fee billing method that suits every project and every Client. We can discuss the range of fee options and assist the Client in deciding which method is most appropriate for their project.