Architectural Fee structure can come in many forms from hourly, percentage of construction, per square foot, or flat rates. Depending on the architect the architectural fees may have varying structures and these may also vary based on the project type.
Different architects will have different ways they structure their fees. In this post we will outline some of the most common methods. Architects will also have different perspectives on what is and is not included in the price. Make sure to fully understand what additional fees may be incurred on a project.
Types of Architectural Fee Structure
- Hourly
- Flat Rate
- Percentage Of Construction
- Cost Per Square Foot
- Hybrid Fee Structure
HOURLY ARCHITECTURAL FEES
Hourly fees are straight forward but leave you open to surprises when you get the bill. At our architecture firm we rarely do hourly services because our clients prefer not to. In some instances where it is difficult to establish a clear scope of work hourly architectural fees may make more sense. In this case the architect will provide the client with a price list outlining how much the individuals working on the project are billed at on a per hour basis. At the end of every month the client will receive a bill for the work performed.
Hourly billing is very fair to the architect because they get paid for their time. some clients don’t like this fee structure because they will have no idea how much they will spend on the job. Sometimes the architect will cap the fees setting a maximum limit for billing.
FLAT RATE ARCHITECTURE FEES
Flat rate fees for architectural services are how we usually price services at our architecture firm. We provide a hard number based on our best estimate on what the job should cost. The billing can be broken up into monthly billing based on a percentage of work completed or into milestone payments. Milestone payments are most common for us. On larger jobs a percentage of work completed billed monthly may make more sense. The percentages could be based on the 5 phases of architectural design.
Clients like flat rate fees because there are no surprises. the problem with flat rate fees is that the architect runs the risk of over estimating or under estimating the job.
PERCENTAGE OF CONSTRUCTION
It is very common for architects to charge a percentage of construction. I have actually never done this at my firm. Basically the architect will propose a percentage rate and the client will pay them based on the construction budget. The architect would bill either monthly or based on milestones at a predetermined rate.
I find this system to be odd quite frankly. It leaves a lot of unknowns for everybody. Additionally I think clients tend to be scared the architect will try to inflate the budget to increase their fees.
COST PER SQUARE FOOT
Some architects charge based on a set cost per square foot. the set a rate and based on the size of the job they get paid accordingly. I am not so sure how common this is but I do think many architects use this system. Based on the expected difficulty of the job the cost per square foot could vary. In this system the architect would either bill monthly or based on pre established milestones.
HYBRID ARCHITECTURE FEES
sometimes an architect will provide a hybrid structure. For example they may do a flat rate for design and filling for permits but an hourly rate for construction site visits. This is relatively common. You may not know how much time you will actually spend on the construction site for example if you have a great contractor the architect may need to do less visits. If the contractor is not so good the architect may need to do more.
THANK YOU FOR READING OUR POST ON ARCHITECTURAL FEES
We hope this post was helpful and we wish you the best of luck with your project. Please feel free to leave comments or questions below. If you are interested in speaking with an architect you can contact us directly and we will be happy to hear about your upcoming project.
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This post was written by Jorge Fontan AIA a Registered Architect and owner of New York City architecture firm Fontan Architecture. Jorge Fontan has earned 3 degrees in the study of architecture including two degrees from the City University of New York and a Masters Degree in Advanced Architectural Design from Columbia University. Jorge has a background in construction and has been practicing architecture for 20 years where he has designed renovations and new developments of various building types.
