Costs and Contracts with ArchitectsQ - We are going to build a house and agreed a fee six months ago with an architect based on £850 per square metre. He now says that building costs have escalated since then and he wants his fee to be based on £950 per square metre. Can you advise us on what we should do?
A - Architect's fees are normally calculated as a percentage of construction cost (usually the lowest tender) or on a time basis. Using a percentage is difficult in self-building because the client often carries out some of the work himself so the overall construction cost is reduced to the detriment of the fee.
So it would be normal in these circumstances to agree a lump sum fee for the design work.
But you have agreed a figure with him and, whether in writing or not,
you have a contract and he ought to adhere to it. You will either have to negotiate or appoint someone else.
Q - We are going through the planning process to convert a small three-bedroom cottage to a much larger four-bedroom house in South Cheshire. In order to get the floor area we need, (somewhere in the order of 300m2), we are going to build a basement underneath the planned extension, but I am not sure how much to budget for the construction of the basement.
A - Our architect is working on a cost of £1,400 per square metre (excluding VAT) for the basement, and £1,000 per square metre for the extension including fitting out to a good standard. Contacts tell me that £800 per square metre is the local going rate for extensions but are stuck for basement costs.
Q - The floor area of the basement is approx 62 square metres and the extension has the same floor area on the ground floor and an additional 32 square metres on the floor above. We would appreciate your views on how much we should be budgeting for both the basement and the extension.
A - Your architect's square metre prices seem high. Building costs today are running at about £1,000 per square metre for a normal specification level but raising that to a higher level should only cost an extra £100 to £150. Basement costs should only exceed building costs if the work is being carried out in an existing house. Given normal ground conditions and no structural problems, you should expect to pay around £600 to £700 per square metre for a new basement plus extra drainage costs depending upon the layout and levels.
Q - We are having our new house designed by an architect and he is advising us employ a quantity surveyor to prepare a bill of quantities. Is this normal procedure and what would it cost?
A - It is unusual to have bills of quantities for single house projects but not unknown. They would be of limited help in assessing the monthly payments to the builder and in the agreement of the cost of extra work. Their main value would be at the tender stage when you are obtaining quotations because all the bidding contractors would prepare their bids on the same basis.
But even on major projects their use is declining as other methods of procurement are becoming more popular. If you decide to go ahead, however, you should expect to pay about 2.5% of the cost of construction costs for their preparation.
You would receive better value if you employed a quantity surveyor to prepare a bill of approximate quantities, obtain tenders, select a contractor, measure up for monthly payments and settle the final account. You should be able to have this work done for about 5% of the construction costs.
Q - We are talking to an architectural technician about preparing drawings for our house and he wants his fee to be based on a percentage of the square metre price of the actual cost of the house. We are going to carry some of the work ourselves and are worried whether this system will work. Can you advise us on what we should do?
A - You should be very wary of adopting this method of payment because it is fraught with potential problems. For example, to arrive at the final cost of the house you would have to retain every single item of expenditure and how would you put a value on your own time? Further, you wouldn't know the final value until the work was complete and would he prepared to wait that long?
I would make the arrangement as simple as possible and ask him for a lump sum quotation broken down into payment stages, say obtaining outline planning, then detailed planning and building regulations. Both parties would than know where they stood and the possibility of disputes would be reduced.
Q - We have been building our house for three years that is now finished and have paid an architect to issue certificates for payment purposes. But he won't issue a final certificate because he has retired. Another architect is willing to issue a certificate for a fee of £700 but we have already paid the first architect £450 for this work. What is our position in this?
A - It all depends upon the wording of the agreement you had with the first architect. If he was contracted to see the job through to completion, he should provide the final certificate. If he wasn't, he needn't. But in any case, it seems unfair on you if he evades his responsibility by retiring (unless the cause was sudden ill health) without letting you have notice of his intentions. Perhaps a letter from a solicitor may produce a result for you.
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