The problem is that as a design evolves the price is a moving target.
Exactly, more often than not clients move the goalposts, especially on house extension and refurbisment projects, with items of work added along the way as the design evolves.
As an example, I am doing a project now that started off as a simple reorganisation of a kitchen and a simple extension to that kitchen.
Now...in addition to this, there is a porch to the front of the house, re-wiring throughout the house, new windows to be the existing house, painting and decorating to the enstire house, and, the conversion of a box bedroom to an EnSuite.
Additional works = additional time designing, detailing, specifying, inspecting on site, snagging, etc., etc.
So, on a % basis, the project has a higher value but the fees increase accordingly (to cover the extra time input/work invoved). If the initial fee quote was fixed - fo the work to the kitchen - then with every additional item of work added, you would have to go back, cap in hand, to the client, looking for more fees...that gets annoying (on both sides!).
That's the reason that many architects charge % fees. Where a fixed fee is required - then the client has to be very clear outset that that fixed fee is for a fixed service.
Many architects will also work on a dual fee basis, in terms of starting on a % basis, and, then, when the scope of works has been established (and all the works the client actually wants to do has 'come out in the wash') fix fees from that point on.
As to 'celtic tiger' fees and % fees, bear in mind that a project that is E200K now, would have been likely to have been E300K 6/7 years ago. So, if the architect is still charging a fee of typically 10%...the architect has in effect reduced fees 33% since the 'celtic tiger'.
To answer the OPs query, some architects will exclude what I call 'client supply items', such as timber flooring, tiles, sanitary ware, the kitchen, and the likes, from the build cost/contrcat (and therefore not charge fees in relation to same) if the client is happy to deal with the selection, sourcing and dealing with same.
I believe where % fees get a bad name is from solicitors (conveying houses) and estate agents (selling houses). Hard to justify a % fee for conveying/selling houses based on market value as this varys hugely from area to area but, in theory, the amount of work to convey/sell the house is the same (no matter what the market value is).
Is it really that annoying to have to manage scope and renegotiate fees with clients?
Also, I think you're not quite understanding the solicitor's role in conveyancing. Their role is all about risk...
It's between you and your client to work out, but I'm not sure why it is 'a bit of a mess' for an architect, but fairly routine for the builder to deal with revisions, changes and additional cost proposals?Very simply...yes. A client could have a handful of revised/additional fee proposals. That's a bit of a mess?
That's why % fee is straight forward and everybody knows where they are.
Interesting to note that you see the value of 'pricing the job' for the builder, but not for yourself. I wonder why?In terms of what you said above about incentivising the architect to 'let' overall prices increase? That's one reason to go to (competetive) tender and I always ask clients to bring at least one builder (that has come recommeded to them) to price the job (essentially for balance...so they know that I am not sending out to tender to selected expensive builders).
Just also to say, for very simple straightforward jobs - and where there is a clear brief - I will give clients a fixed fee proposal (if they wish), but, sometimes that can work out more expensive than the % fee option. When you are doing fixed fee proposal there is an element of hedging.
But yet you didn't mention risk in your explanation of the % fee basis?...and an architects role in a project is nothing to do with risk? Noted your own comment on PI insurance above.
I would suggest that architects are exposed to more risk being involved in a projcet than any solicitor conveying a property?
Interesting to note that you see the value of 'pricing the job' for the builder, but not for yourself. I wonder why?
But yet you didn't mention risk in your explanation of the % fee basis?
Honestly, neither am I. I’m not trying to ‘go anywhere’ – I’m just putting out an alternative view.Not sure where you are going with this?
Yes, it’s a free market, and clients and architects are free to act either way. I’m suggesting that clients might like to think about a business arrangement that doesn’t incentivise the architect to increase the overall costs of the job. It’s just a suggestion really – it may go against tradition, but the ‘traditional’ approach doesn’t seem to be in the best interests of the client.When I meet a (potential) client. I give them a detailed proposal. They accept it or they don't. If they choose me (and my % fees) well and good. If they don't choose me, so bit it.
A (potential) client may seek to get 10 fee proposals from 10 architects...it's a free/open/competitive market.
As for builders, yes, get prices from builders, but, in my experience. clients very often do not go with the cheapest builder.
Just a gentle dig at you – if risk really is a factor, how come you didn’t mention this when you were initially explaining the % fee?You were the one that connected % fees and risk suggesting that a house, with a higher market value, is a riskier prospect for a solicitor to convey than a house with a lower market value...but the process of conveying both is essentially the same.
All I was saying in relation to % fees, is the bigger the job, the more work there is for the architect to do, so the more they should be paid in terms of fees...and, in terms of risk...bigger job = bigger risk.
This applies to the construction risk, but not to the title risk. The legal professional still bears the risk of ensuring 'good and marketable title'.either way the legal system commutes the risk to the surveyor, or now for a new property under the new BCA to the design or assigned certifier
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