One of the popular questions in a construction contracting business is about the computation of architectural fees in residential buildings. It often happens that the clients are not sure if they are being charged fairly, and much worse, whether the fee is excessive or if the whole pricing thing is even proper. In this blog post, I will use the costs provided in the manual of UAP (United Architects of the Philippines) guidelines, a typical residential design to calculate architectural fees. Moreover, I will show how to know when an architectural fee could potentially be more than it ought to be and what are the variables that might bring down the cost.
Step-by-Step Guide to Computing Architectural Fee
Here’s a sample computation, we will demonstrate the steps in the form of a simple example that involves how to calculate the architectural fee for a house in the Philippines with PHP 35,000 per square meter as the average construction cost of a standard finish house.
Step 1: Calculate the Total Construction Cost
First, we will find the total cost of construction. The scenario is that a house will have a total floor area of 200 square meters.
- Construction cost per square meter: PHP 35,000
- Floor area: 200 square meters
The total construction cost is:
Total Construction Cost = 200 sqm × PHP 35,000 = PHP 7,000,000
Step 2: Apply the Standard Architectural Fee (10%)
Under the auspices of the UAP Doc 201 guidelines, residential buildings will be charged 10% of the total construction cost as it is the standard architectural fee.
Hence, the architectural fee will be:
Architectural Fee = PHP 7,000,000 × 10% = PHP 700,000
Thus, the architectural and engineering design fee for a 200 sqm residential house with a standard finish should be PHP 700,000.
Additional Considerations
The scope of services certainly extends beyond the architectural design and is thus beyond the architect’s fee, which also commonly takes into account the coordination of allied professionals—such as structural engineers, electrical engineers, mechanical engineers, and sanitary engineers—who are also essential for the completion of the project. These allied professionals usually get paid separately but besides that, their fees are regularly in the total price of the architectural services, as the architect handles the coordination of the design process. For example, for a residential type of building, an architect might take PHP 700,000 home with him and use part of the money to make all the other allied professionals happy with their job well done.
When Can You Tell That the Fee is Overpriced?
Now that we know how to compute the architectural fee, let’s explore how you can tell when the fee might be overpriced.
1. The Architect Is Charging Above the Standard 10%
In cases wherein an architect is asking for a fee above PHP 700,000 for a 200 sqm residential project that is not backed up by a good reason (like the complexity of the design, or using higher-quality materials, etc.), it is highly likely the fee was marked up excessively. Furthermore, the architect is likely to give you a higher fee if a particular design or site condition requires that. Overall, the range set by the United Architects of the Philippines should be the parameter for the majority of residential projects. Any figure that is too high should be questioned and the issue should be discussed later on.
2. Architect Is Charging for Services Already Included in the Fee
According to UAP Docs, the expenses for architectural designing should include the following:
- Pre-design services (site analysis, zoning, permitting)
- Design development (conceptualization, schematic drawings, etc.)
- Construction documents (plans, sections, elevations, technical specifications)
- Coordination with allied professionals (engineers, specialists)
- Bidding and negotiation (helping select the contractor)
- Construction administration (site visits, supervision)
Adding these services if extra paid for by the customer is indeed grievous overpricing. Buyers need to make sure to spell out in the contract what will be brought onboard.
When Is a Fee Not Overpriced?
Above the calculated fee of PHP 700,000, we can say that not all architectural fees are flashy. The fees, on the other hand, can be set straight by considering several key factors like:
- Project complexity: A more complex and custom design plan may result in more time and more expert assistance and thus more reasonable fees.
- Location: Projects in remote or challenging locations may include matters of travel or site assessments for which additional costs will be incurred.
- Design complexity: A project with a sort of expressed design or non-standard finishes will need more engineering services or consultancies with interruption and a wider range of the specialists.
- Scale: The more massive projects can be a proper case for a slightly reduced percentage fee, as the construction cost is higher and it stills’ the person’s effort.
- Scope of work: Once an agreement is reached with your chosen architect, the scope of work should be clearly defined. In some cases, it may be necessary to adjust the proposed services by adding or removing certain elements based on mutual agreement.
If an architect charges less than PHP 700,000 or decreases the fee, it is not overpriced. Perhaps they have toned down their rates to meet the project-specific requirements like budget shortage or other unexpected conditions. It’s recommended to tone down the rates of design and to question the discounts in order to know the explanation of the rate.
Allied Professionals and Their Role
One of the most important aspects to consider when determining architect’s fee is the fact that the architect assigns the responsibility for the coordination of these professionals, and typically their fees are a portion of the overall design fee.
Where you will be given an itemized list of the services provided, it is upon the architect to ensure that the different specialists work together without issues. Hence, a part of the architect’s fee is used to cover the cost of paying these allied professionals.
Conclusion
Summing up, the architectural fee for a residential building in the Philippines should approximately be 10% of the total construction cost with a PHP 700,000 fee for a 200 sqm house at a rate of PHP 35,000 per square meter. Assuming the fee is less than this sum, this may not mean that it is too much money and probably just includes that the architect calculated certain adjustments, for example, the complexity or the site location.
Nevertheless, if the fee is significantly above the PHP 700,000 mark, or if some scandalous services are being charged besides, it’s necessary to ask for a detail and clarification to affirm the prices are reasonable. Don’t forget, that the architect’s fee you pay also incorporates the cost of coordinating competent professionals and that makes all the parts of your building designed in a riskless and efficient way.
Just as before, clear and open information exchange between you and your architect is the basis for a job order that will make you offer the architect and engineering firms who are working on your project a reasonable price for deliverable and safe projects.
