• Decoding Architectural Fees And How To Calculate

    To consider architectural fees as a part of one’s construction budget is mandatory. Hiring architects is a must while planning any residential or commercial building. The involvement of architects and designers is important, as they give us their valuable input on the design and structure. As a result, their expert opinions do have value, which they charge through their architectural fee. As a part of the construction budget, architectural fees vary according to the stages, depending on the scope of work of the architect on the project. Thus, while doing any construction project, it is necessary to know the architectural fees and calculations for hiring a designer.

    Architectural Fees
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    Talking about the architectural fee calculations, we must look into the following factors that affect the calculation of the fees:

    1. Scope of Work

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    When an architect accepts a project, they look into the type and nature of the project. The scope of work includes the typology of the project, whether it is a residential, commercial, or institutional project. They look at the complexity of the project, which also includes the scale that directly impacts the workload of an architect. Projects that need more research, design iterations, and supervision will be charged more.

    2. Experience and Reputation

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    When you hire a new architect in comparison to a well-established architect, there is a huge difference in the charges. A well-established architect with a proven track record and experience will charge more. For higher-scale projects where architects have more involvement, the percentage will be between 6% and 15%. Whereas small-scale projects have charges per square foot, architects have less involvement.

    3. Project Scale and Budget

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    The higher the scale of the construction, the higher the fees. A higher scale and budget will require more design, drawings, and supervision. Hence, the fees will increase gradually.

    4. Location

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    The area or city in which the project is based will affect the fees of an architect. Looking at their needs for travel, market demand, and local regulations, the charges will be increased or decreased.

    5. Services Provided

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    There are basic services that are provided by the architects, such as conceptualization, schematic design, and construction drawings. The charge for additional services such as project management and site visits is according to the needs.

    6. Timeframe and Deadlines

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    The timeline of the project impacts architectural fees. Due to the requirement of the immediate completion of the project, the charges for the architect’s services will be higher. As architects will have to give extra hours to complete the project in a given time, they will charge more fees.

    7. Additional Consultants

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    Architects often have the role of designing and providing design drawings. They might also suggest other members of the team for the project. While engineers, contractors, and other consultants will always charge additional architectural fees, the calculation and budgeting of these charges are different.

    How To Calculate The Architectural Fees

    According to the architect’s profile, roles, and responsibilities in the project, the fees in India will vary. There are several ways in which architects adopt their fee structure. Different ways of charging the fees include fees based on an hourly rate, a fixed fee, a percentage of the project cost, or even a fee based on the square footage of the project. As we see in India, architects charge a percentage of the total construction cost, which ranges from 8% to 15%. To get more accurate information, we can discuss different ways of charging fees.

    1. Hourly Rate:

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    To charge an hourly rate for their service, which includes specific consulting or advisory services. For example, providing expert advice, reviewing plans, or offering guidance on specific design elements. These rates will vary depending on the experience and reputation of the architect. It is very necessary to know the hourly rates before calculating the budget.

    2. Retainer fee:

    For certain projects, architects may charge a retainer fee to secure their specific period. The retainer fee is a lump sum amount, reassuring the architect’s availability and commitment to the project.

    3. Value-Based Fee:

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    For larger or more complex projects that require the architect’s expertise and innovative solutions, they will charge more. The negotiation of the fees is based on the value of the architect’s contributions rather than a fixed percentage or rate.

    4. Combination of Methods:

    They use a combination of fee calculation methods depending on project requirements. For example, they may charge a fixed fee for certain services, such as initial or conceptual design, and then calculate the total cost on a percentage basis for subsequent stages. This hybrid approach will allow flexibility in the projects.

    5. Additional Costs:

    There are also calculations regarding the work, such as government approvals, building permits, structural engineering fees, interior design fees, and project management fees. Such works are always additional, apart from the architectural fees.

    Schedule Of Payment for the Services

    There is a formalised payment schedule, which they give to the clients after their approval of the project. This agreement for the schedule of payment becomes a document that ensures timely payment from the client accordingly.

    Retainer stage

    After signing the final agreement letter with the client, the architect takes 5% of the total payable fees as a matter of confirmation of the project from the client.

    Stage 1: Conceptual Design Stage

    When the architect submits the basic conceptual designs and the rough estimation for the project, they charge 10% of the total payable amount for the project. 

    Stage 2: Preliminary Design and Drawing

    The architect gives the preliminary design for the project and the cost estimation is 20% of the total fees payable, which is less than the amount paid at stage 1.

    Stage 3: Drawing for the Client’s or Statutory Approval

    1. When the architect submits the drawings done after incorporating inputs from the client, 30% of the total fees payable is less the payment made at stages 1 and 2.
    1. When the architect commences the construction after the client’s approval, wherever needed, 35% of the total fees payable will be less than the payments made at previous stages.

    Stage 4: Working Drawings and Tender Documents

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    This stage covers the working drawings, specifications, and schedule of quantities sufficient to prepare an estimate of cost and the preparation of tender documents, after which 45% of the total fees payable less the fees already paid will be charged.

    Stage 5: Appointment of Contractors

    This stage includes inviting, receiving, and analysing tenders after the approval of the clients. This will also include the appointment of contractors, after which 55% of the total fees payable less the amount paid will be released.

    Stage 6: Various construction stages

    Upon submitting the working drawings required for the commencement of construction, 65% of the total fees payable are less the payment already made.

    20% of work completion on site 70% of total fees less payable from previous payment

    40% of work completion on site, 75% of total fees less payable from previous payments

    60% of work completion on site 80% of total fees less payable from previous payment

    80% of work completion on site, 85% of total fees less payable from previous payments

    On virtual completion on site, 90% of total fees are less payable than the previous payment.

    Stage 7: Completion Stage 

    On submitting the completion report and drawings for issuance of a completion or occupancy certificate by authorities wherever required and on issuing the bill, one takes 100% of the total fees payable less the previous payment.

    How Can the Project Cost be Reduced?

    People often worry about the project’s cost going high beyond the budget that has been in their minds. These circumstances can be avoided by the client and architect’s collaborative efforts and discussions. There are various ways in which one can reduce or keep the project cost in check.

    The material that is to be used can be selected according to budget and quality.

    The project can be planned and executed within a certain time frame such that the material cost and market rates do not vary from commencement.

    The labour charges can be negotiated according to the work required.

    One can always look for contractors offering discounts on various services.

    One can research supplies at economic rates.

    Reconsidering the project scope by eliminating certain tasks that are not necessary for the project’s completion.

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    When one hires an architect or a designer, they have the benefit of their expertise in every aspect of the project. An architect can help plan the project according to the budget one has in mind. The architect has better knowledge regarding the market rates and dealers for the material. They can suggest alternatives according to one’s budget and needs. Architectural fees are a small part of what one pays when one hires an architect to help them with overall project management. Knowing the various aspects of architectural fees is very important for the client to understand the structure of the project. These fees are the agreement for the project that is stated between the client and the architect, which completes the project smoothly.

    Content Writing And Research By: Ar. Rajeshwari Pandya Modi

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