Understanding architectural fees before the first invoice

Find out which calculation applies

MBIE's guidance identifies hourly rates, a percentage of building cost and fixed fees as common ways designers and architects are paid. Those labels are a starting point. I would ask the team to explain the arrangement proposed for your own project in ordinary language.

With an hourly arrangement, ask which rates apply and how time will be reported. With a percentage fee, ask what cost figure the percentage uses and when that figure is updated. With a fixed fee, ask exactly which work and assumptions sit behind the amount.

• Is this an agreed fee, an estimate or an allowance?
• Does the same charging method apply to every stage?
• Does the amount shown include GST?

Separate the total from the payment timing

Knowing the likely overall fee does not tell you when you need the money available. I would draw a simple line showing the proposed design stages, then write the expected payment points underneath it. Leave a question mark anywhere the timing is unclear.

For a hypothetical example, imagine you are comfortable with a proposed fee but have assumed most of it is payable when building starts. The designer may be proposing payments during the design work. Neither assumption should be left hanging until an invoice turns up.

• Is there an initial payment, and what is it applied to?
• Will invoices arrive at milestones, at regular intervals or on another basis?
• What are the payment terms?
• How will a pause in the project affect outstanding work and payments?

Keep the other invoices in view

I would give every anticipated project cost a named place in your notes. Put design fees in one line and ask where consultant fees, council charges and other expenses belong. Do not quietly include a cost in your mental total just because the design team will help coordinate the work.

For each item, ask who will appoint the person involved, who will invoice you and whether you already have a confirmed amount. You are building a clear picture of your commitments, even where some figures are not available yet.

• Mark each amount as confirmed, estimated or not yet known.
• Check whether an expense appears in another allowance already.
• Ask who will obtain missing information and when.

Agree how a change becomes a cost conversation

Consider a hypothetical renovation where you initially discuss the kitchen, then decide to explore the bathroom too. Before asking for the extra design work, I would ask the team to explain what that addition means for the agreed fee and programme.

The same question is useful when something unexpected needs investigation. Ask how the team will let you know, what information they can give you at that point and how you will agree the next step. My preference is to make the uncertainty visible while you still have a decision to make.

• What is prompting the additional work?
• Can you explain the proposed fee or charging basis?
• What needs my agreement before you proceed?
• When will you update me if the amount is still uncertain?

Try explaining the arrangement back

Before accepting a proposal, finish this sentence in your own words: I am paying for these stages, calculated this way, with payments due at these points. Then add what happens if the work changes. If you get stuck, that is the part to ask about.

I want a design conversation to leave room for practical questions like these. If you are considering a project with Modal Architecture, bring your budget questions to an initial consultation so we can discuss the work you need and how a proposal could be structured.