![]() In the end, if actual costs exceeded those estimates, the architect would send the owner a bill to reconcile the difference. ![]() Often, they inserted a statement like “7 percent of the cost of the work,” and the architect billed the owner based on estimates throughout the project. As to using a percentage of the project’s cost, the instructions suggested the following language: Percentage of the Cost of the Work, in which compensation is calculated by applying an assumed percentage to the estimated or actual Cost of the Work, whichever is more certain at the time the calculation is made.Įven with this guidance, owners and architects struggled to clearly define the architect’s compensation in a ‘percentage of the cost of the work’ scenario. The new B101-2017 offers a solution that could bring clarity to the murky world of percentage-based compensation.ī101-2007’s instructions noted at least 10 methods of computing an architect’s compensation that could be inserted into that agreement. Some of the inserted terms made sense, but others were confusing and ambiguous. ![]() How then, does an architect calculate fees based on costs that are still unknown? AIA’s B101-2007 agreement required the owner and architect to enter their own terms for percentage-based compensation. But there has always been an inherent conflict in an architect calculating compensation as a percentage of project costs, as those costs are not fully known until after the architect has performed most of his or her services. After all, the cost to build a project directly relates to its complexity and to the degree of design services the architect is expected to perform. AIA’s new B101-2017 agreement attempts to bring clarity to the murky world of percentage-based compensation.Īrchitects often set their compensation as a percentage of project costs. ![]()
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