02_Architectural Appointment

Architect Appointment

 

Implications of not having a professional services contract in writing

 

In response to your request for a summary of the implication of not having a professional services contract in writing for the potential boutique hotel commission in California, I have prepared the short practise note below:

 

The benefit of a formal appointment is that is clearly sets out, in detail, our fees, our services, and the terms and conditions of the appointment.  The success of a commission relies on a clear and unambiguous agreement regarding the scope of work, agreement on terms for payment and the way of dealing with changes in scope and variations and provisions for limitations of liability and options for dispute resolution. 

 

If no written agreement is in place, the practise will be relying solely on the good faith between our Director and his friend (the client).  Although an overview of the key terms may have been agreed in principle through a letter of intent or email exchange, we can expect there to be terms that have not been accounted for in this document leaving open the possibility for ambiguity or personal interpretation.  Furthermore, in the absence of the use of a formal agreement (for example, the RIBA Standard Agreement, or an alternative bespoke agreement drafted with legal advice) it is difficult to know in advice what interpretation a court would give to any oral / letter of intent if a dispute was to arise.  This would leave our architecture firm open to the risk of the inability to claim for fees, and/or a risk of prosecution if we do not have a clear understanding of our duties and liabilities before work commences.

 

Therefore it is vital that a formal agreement is made with the client formalising the following terms:

 

·         Scope of work

·         Who will be responsible for what

·         Extent to which any of the architectural services will be sub-contracted

·         Agree on terms for payment and the way of dealing with changes in scope / variations.  Procedures for calculation and payment of fees and expenses

·         Sets out expectations for project delivery

·         Addresses limitations of liability and insurance requirements. Needed for PI insurance

·         Provisions for protection of copyright and confidential information

·         Provisions for suspension and determination

·         Set outs options for dispute resolution

 

 

 

Written appointment terms provide vitally important benefits and protection to both us (the architects) and the client against ambiguity and misinterpretation of our duties and responsibilities to each other

Terms of appointment must include:

 

·         A clear statement of the clients requirements

·         A clear definition of the services required

·         The obligation to perform the services with due skill and care

·         The obligation to keep the client information of progress

·         The roles of other parties who will provide services to the project

·         The name of any person with the authority to act on behalf of the client

·         Procedures for calculation and payment of fees and expenses

·         Any limitation of liability and insurance

·         Provision for protection of copyright and confidential information

·         Provision for suspension and determination

·         Provision for dispute resolution

Any variation to the standard for of appointment need to

·         Legally acceptable

·         Compatible with other provisions

·         Will not legal to excessive liabilities

·         Do not create conflicts of interest

 

Professional code of conduct, which deals with this issue.

 

Furthermore, both the ARB and RIBA Code of conduct require architects to have a written appointment with a client in place. 

 

The Architects Registration Board (ARB) Code of Conduct comprise of 12 standards of professional conduct and practice of those registered as Architects.  Standard 4 deals with the competent management of your business, with standard 4.4 requiring that before undertaking any professional work an architect must actually enter into a written agreement with their client.

 

Note 4 of the RIBA Code of Professional Conduct requires an obligation of members to provide to their client at the outset of any project, their terms and conditions of appointment.  Guidance note 4.2 provides a list of the terms that the appointment should include.

 

Failure to comply with these codes may result in disciplinary action by the ARB and will be taken into account if in the event of coming before the Board’s of Professional Conduct Committee

 

 

Letter of Intent

 

·         A letter of intent covers a broad range of agreements between parties, with varying degrees of formality. 

·         Although often considered a mechanism for getting the ball rolling by outlining the initial works and key terms (for example, perhaps fee and timing), a letter of intent typically lacks the weighting of a properly settled contract with agreed appointment terms. 

·         Depending on the content of the letter of intent it is difficult to know in advance what interpretation a court would give to such a document if a dispute based solely on a letter of intent was to arise. 

·         Therefore, the primary disadvantage over a formal appointment contract is their unpredictability and if used when time is of the issue, should always be followed up with a formal appointment contract.

 

·         ARB Code of Conduct Standard 4 – Competent management of your business, address the need for a formal services agreement.

 

·         RIBA Code of Professional conduct Guidance note 4 addresses the importance of formal agreement.

 

·         EXAMPLE: may be that a client is desperate for the architect to perform a feasibility study on a site which is going to auction in a weeks time.  In this case, due to time restraints, a letter of intent might be sent to the client to outline the fee structure and the time structure for the first stage of the works with a view to agree a formal architectural appointment at a later date.  This is in the understanding that the urgency to start the feasibility study outweighs the risk of losing the job and project to both client and architect

 

Risks involved with the hotel project and what issues should any written appointment address.

 

·         Have not done this type of work before.  Need to make the client aware of this.  Further reason to have a formal appointment agreement in place.

 

·         Risk that it is an overseas project. 

 

·         May need to engage the services of a local architect to oversee the design and ensure that the design meets the local building regulations.

 

·         Need to contact insurer to make them away of the location and type of project being undertaken before signing any formal agreement.

 

·         No the limits of professional knowledge and allow in the contract provision to bring in specialist sub-consultants to aid the design and reduce the risk (move the risk of this design element to them)

 

·         Risk that he is a friend of the director.  Will not be specifically written into the contract but this fact should not be forgotten and further distils the importance of having a formal agreement in place to have a legal agreement to fall back on.

 

 

RIBA Plan of Works 2013

 

Stage 0 – Strategic and designation of project.

·         Defining the clients requirements through development of the brief

·         Initial consideration for assembling the project team

·         Pre-application discussions

·         Review past applications / discussions

·         Strategic Brief

Stage 1 – Preparation and Brief

·         Develop project objectives ie. quality / outcomes

·         Prepare project roles

·         Pre-application discussions

·         Handover strategy and risk assessments

·         Advising the client on procurement

Stage 2 – Concept Design

·         Prepare Concept design, including outline proposals for structural / services design

·         Preliminary cost information

·         Agree final project brief

Stage 3 – Developed Design

·         Prepare Developed Design, including co-ordinated and updated structure / services design

·         Outline cost information

·         Project strategies in accordance with Design programme.

 

Stage 4 – Technical Design

Stage 5 – Construction

Stage 6 – Handover and Close Out

Stage 7 – In Use

 

ARB Code of Conduct

 

Standard 01             - Honesty and Integrity

Standard 02             - Competence

Standard 03 - Honest promotion of your services

Standard 04 - Competent management of your business

Standard 05 - Considering the wider impact of your work

Standard 06 - Carry out professional work faithfully and conscientiously and with due regard to relevant technical and professional standards

Standard 07 - Trustworthiness and safe guarding clients’ money

Standard 08 - Insurance arrangements

Standard 10 - Deal with disputes or complains appropriately

Standard 11 - Co-operation with regulatory requirements and investigations

Standard 12 - Respect for others

 

RIBA Code of Professional Conduct

 

1. Integrity

2. Competence

3. Relationships

 

Guidance Notes

 

1. Integrity, Conflicts of Interest, Confidentiality and Privacy, Corruption and Bribery

 

2. Competition

 

3.  Advertising

 

4.  Appointments

 

5.  Insurance

 

6. CPD

 

7. Relationships

 

8.  Employment and Equal Opportunities

 

9.  Complaints and Dispute Resolution