Are you wondering about the costs of hiring an architect in Canada? Read this post.
In this article I’m going to reveal the mystery of all the puzzles that made you be wondering about the architect fees percentage in Canada. I can say from my experience in other countries that this might be very close to a universal guide applicable to the most countries. This article means to answer questions like: How much does it cost to hire an architect to design a new building or addition? How much is architect fees per square foot? How to calculate architect fees for commercial project? How to find out the architect fees for residential project? How to learn about architect fees for a remodeling or renovation project? etc. After reading this article you will be able to calculate architect fees for almost any type of project. Also you will be well-equipped to negotiate your terms and budget with the architect you hire. Ready?! Read on and you will learn a lot for your new dream space out of this article.
"How much does it cost to hire an architect to design a new building or addition? How much is architect fees per square foot? How to calculate architect fees for commercial project? How to find out the architect fees for residential project? How to learn about architect fees for a remodeling or renovation project? etc."
Buildings are prominent objects in our lives. We all inhabit most of our waking and sleeping hours in buildings and cannot avoid seeing them. You are influenced by what you receive from your environment via your five senses. What you receive from space around you intend to affect you so subtly that you may feel like there are something coming from an unknown source but the source is not unknown, it is very evident, it is your environment. Your environment has a great impact on you in profound levels and that’s why you might not recognize the source and the way they touch you. Our physical environment can affect us in two ways: psychologically and physically. Now, let’s see how it happens and how it works.
“Our physical surroundings can increase or reduce our stress, which in turn impacts our bodies in multiple ways” according to a research by International Agency for Research on Cancer, a component of the World Health Organization. They found out that hard-to-cure illnesses like cancer can be discouraged by managing the stress level and our environment is the most important source of stress. Being exposed to the space featuring design, style, color, lighting, and stuff we are comfortable with helps to manage our stress level. We can heal ourselves by living in spaces that give us great feeling according to the research.
Why to hire an architect at all?
Now let’s read about psychological effects and social values that our spaces can add to our lives. “For many people, their home is part of their self-definition, which is why we do things like decorate our houses and take care of our lawns. These large patches of vegetation serve little real purpose, but they are part of a public face people put on, displaying their home as an extension of themselves. It’s hardly rare, though, in our mobile modern society, to accumulate several different homes over the course of a lifetime” according to Susan Clayton findings, an environmental psychologist at the College of Wooster. Maybe that is why we put the most in our home and do our best to glow with that as a self-identifier within the society we live.
For better or worse, the places you live in play a significant role in how you perceive your world, how you build your social reputation, how you maintain your well-being, and how you maintain your wealth. Those are very important issues that should be addressed when you are making a decision on building, renovating, or remodeling your residential or commercial buildings. In this regard, the role of architects is quite noteworthy. Many people consider a design budget when they plan for new built or renovating / remodeling their house or work space because they are aware of the fact that it pays back through value they add to a building by designing a layout that not only functions in its best way but also is energy-efficient, pleasant to view, and will add market value to the property also to the neighborhood.
Furthermore, the use of architectural services by a licensed or registered architect is a requirement for many building types as required by building codes across Canada.
I thought you were going to say how much does it cost to hire an architect!
You’re right but I needed to clarify the points that form the other end of a mutual transaction: what you receive and what you give. Now, after reading the rest of this article you have the whole map under your fingertips and are ready to go!
The information about cost of hiring an architect to design residential or commercial in Canada, the methods, and the calculation considerations I’m going to expose you to is excerpt from The Royal Architectural Institute of Canada (RAIC), 2009’s guide. This guide has been indorsed by OAA (Ontario Association of Architects), MAA (Manitoba Association of Architects), AAPPQ (Association of Architects in Private Practice of Québec), OAQ Ordre des architectes du Québec , AANB (Architects’ Association of New Brunswick), AAPEI (Architects Association of Prince Edward Island), NSAA (Nova Scotia Association of Architects), NLAA (Newfoundland and Labrador Association of Architects), NWTAA (Northwest Territories Association of Architects), and is supported in principle by SAA (Saskatchewan Association of Architects).
There are several different methods of calculation of architect fees but the most common methods include:
Lump Sum or Fixed Fee
The architect and the client might choose one or combination of two or more methods mentioned above. They might agree on one method for one phase of the project and another method for the other phase. So they are able to negotiate and agree on what that works best for both of them.
Now we need to get a bit into details of each method to figure out how each method works. This part might sounds a bit boring but you need to get a good grasp of each method to be fully equipped when you sit to discuss the fees with your architect. I tried my best to simplify it for you so please bear with me and read on.
1- Lump Sum or “Fixed” Fee
A lump sum or fixed fee is an amount negotiated with the client for professional services that can be defined at the outset of the project. This arrangement is only suitable if the following variables can be determined by your architect:
Scope of the project
The schedule for design and approvals
The construction schedule
Other variables related to the projects in all phases
When an architect offers a fixed fee it means s/he and consultants have precisely calculated and prepared a comprehensive estimate of work hours and overhead costs. The fee becomes effectively a fixed price unless some changes would apply that are beyond the architect’s hand or the client changes their mind. In this case, the lump sum fee needs to be adjusted.
2- Time basis
Time basis fees are charged on an agreed-to hourly or daily (per diem) rate. This method of compensation is useful when the services are difficult to determine in advance or they short in duration.
Time-basis fees are typically used for the following:
Services which are not well defined
For a particular phase of the project, such as general / field review
For services as an expert witness
Preparation of record drawings
Specialist expertise or services
The actual hourly rates vary across Canada and by the level of experience, seniority of the architect and staff, and/or the pricing strategies of the architectural firm. Architects are professionals with extensive training (sometimes the internship and licensing process for architects is considerably longer than that for other professionals, including medical doctors or lawyers) and therefore the hourly rates for architects will correspond to the local market, to the architect’s experience and expertise, and to the rates of other licensed professionals in the region.
Hourly billing can utilize fixed dollar rates (such as $250 per hour) or they can use a fee multiplier. There are two types of multipliers: “Direct Salary Expenses” multiplier and “Direct Personnel Expenses” multiplier which is the most common.
The hourly or per diem (daily) rates for architects and their staff should be agreed at the outset and, additionally, the client and architect should agree upon a time period for review and adjustment of the hourly rates (perhaps annually) in order to adjust for inflation and other factors.
3- Percentage-based fee
As of my knowledge, this is the most common and the most flexible method to calculate architectural compensation in Canada. A percentage-based fee is a method of compensation which links the fee for the architect’s services to a percentage of the construction cost of the project (defined below this section). The percentage will vary depending on the type of building, the construction value, and the type of construction contract, and some other variables.
This method has the flexibility to be calculated based on the scope of architectural services in two ways:
Calculate architectural fees on a net basis excluding all engineering and specialist consultant fees
Calculate architectural fees including the normal basic engineering services for structural, mechanical, and electrical engineering
Generally speaking, percentage-based fees are based on sliding scales taking into account both the size and complexity of the project and the construction cost. The fee indicated on the sliding scale is the starting point for discussion and both parties will bring up their points and decide on the final figure and the likely adjustments might come up during the process.
The total amount of the compensation in this method breaks down to the traditional five phases of a project each phase carrying percentage of the total fee. The typical breakdown is as follow:
PhasePercentage of Total feeschematic design12 – 25%design development12 – 25%Cosntruction documents35 – 45%bidding and contract negotiation 2.5 – 6.5%construction phase
25 – 35%
Table from: RAIC – 2009
Generally in this method, services are rendered and payments are made progressively. Then when the project is completed the final accounting will be conduct to cover any discrepancy with the original agreed total fee.
What Is Construction Costs?
The construction costs is the basis for calculating of the architect’s fee when in percentage method of compensation. It is important for the client to have a full understanding of the term and definition for Construction costs then here I try to cast some light on it.
Construction cost is the total contract amount including all project elements specified by the architect – or an eligible person on behalf of the architect – permit fees, contingency amounts, and all applicable taxes. Construction cost should be estimated as determined by the architect at market rates at the anticipated time of construction.
Please note that the construction cost is solely extracted and calculated from the construction project itself. It doesn’t include the compensation of the architect, the architect’s consultants, the land cost, or other costs that are client’s responsibility. Whereas, if you have a construction manager or general contractor their fees are included in the cost of construction.
Now that you know what the construction cost is, I’m going to show you two options you might choose from when signing an agreement with your architect. Please note that both client and architect should agree on the selected method.
Calculated fee is merely based on a percentage of the final construction cost and the fee is adjusted for previous phases to include any changes in the scope of work or any change during the construction process
Percentage fee is calculated based on cost estimates as the project progresses and the fee for earlier phases is not adjusted retrospectively
If both ends agree on the second approach with development of the project estimates of the construction cost are further refined until the actual contract price or construction cost is known. The amount usually is adjusted again during construction based on the agreed amounts at the beginning of each phase.
So we saw that the architectural services adds financial and spiritual value to your life while it usually costs only 10% of total of all design and construction costs. As I said if you do a quick calculation you will find out that it is almost 0.01% of the “lifecycle costs” for owning and operating a facility, according to RAIC, 2009 guide. Please check the diagram below:
Diagm from: RAIC – 2009
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