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dglynnarch
Joined: 08 Feb 2006
Posts: 4
Location: Honolulu, Hawaii
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 Posted: Wed Feb 08, 2006 8:31 pm Post subject: How much to charge for house plans being sold with property? |
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I am a practicing licensed architect (sole proprietor), and am looking for advice for a situation I have zero experience in.
I have a client for whom I have produced multiple designs (since early 2003) for a new house to replace an existing house, which will be demolished. We have gone to permit with at least two of the designs (I've lost track). The latest design is still in the permit process - almost complete.
My client has decided he's better off selling the place as-is (new baby, upset wife, etc.) than he is building the new house. He still owes me a significant sum, which he says he'll pay me when the house sells.
He has a realtor who has found a potential buyer. This buyer may be interested in building the design that is now being permitted. In other words, the buyer will be buying the property and the plans for a new house.
Question: what is a fair price for me to charge for the plans? A percentage of the estimated construction cost? $$/page?
From my perspective I should be paid:
- by my client for the time spent producing the designs.
- by the buyer for the plans, and whatever time it takes to get them the permit.
Is this correct, or am I expecting too much?
Much thanks for whatever advice you can provide. |
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Freelance-Designer
Joined: 04 Feb 2006
Posts: 65
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| Posted: Wed Feb 08, 2006 9:22 pm Post subject: |
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| 20% of the estimated construction cost. Thats all! |
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mx2
millennium club
Joined: 18 Jan 2006
Posts: 1977
Location: Miami, Florida
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| Posted: Thu Feb 09, 2006 7:25 am Post subject: |
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**[ Question: what is a fair price for me to charge for the plans? A percentage of the estimated construction cost? $$/page?
From my perspective I should be paid:
- by my client for the time spent producing the designs.
- by the buyer for the plans, and whatever time it takes to get them the permit.
Is this correct, or am I expecting too much? ]**
Howzit? (I visited once long time ago...love the islands brah, and no, I'm not haolie) 
Anyway, I assume you did not have a written contract then. First free advice: always get it in writing...everything. That said, "handshake" agreements are also binding and your agreement was with the original owner. He owes you for the work you provided, the service you rendered. I think it was reasonable for him to offer to pay you when he makes money from the sale. I've seen too many architects get burned in your situation where the client simply has amnesia and says they're not paying one cent. The burden of proof is on you, but you do have drawings in for permit and that would help you in a lawsuit. 
Obviously you don;t want to go there which is why my advice is to cut your losses, get your money and walk away.
Now as for the new owner, this is an entirely new agreement. The new owner may not like some of it, all of it, or may (unlikely) love it just the way it is. No matter what, I recommend you regard this as simply selling him new services...as if it were a brand new project. You can negotiate by offering what others can not, permitted drawings, which belong to you, not the house. The seller forfeited his rights to the house so they are not legally bound to the permitted plans and the buyer may or may not agree. But you should have made your money already from the seller. That's why I say you need to approach the buyer as a *potential* client.
Now there is one very small side note to this. Property with permitted plans are more valuable. The value of the property increases if it has permitted plans because the issues of liens, zoning, whatnot have obviously been resolved...which makes the property more desireable. But that part would have to be negotiated with the seller, who himself may not be aware and the real esate agent may be making an extra profit off of both of your efforts. 
Hope this helps a little. Good luck braddah...!
mx2
_________________
*Art of Architecture: The conscious use of skill and creative imagination in the production of an aesthetic building.
*Science of Architecture: The calculated use of technical skill and knowledge in the construction of a functional building. |
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dglynnarch
Joined: 08 Feb 2006
Posts: 4
Location: Honolulu, Hawaii
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| Posted: Thu Feb 09, 2006 1:11 pm Post subject: |
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Howzit Bruddah!
Thanks much for your reply; sounds like you're coming from a lot of experience - this helps me very much.
Happily I have a written contract with the present owner (CYA!); it's not the AIA version, but it's pretty good. That, plus an extensive e-mail record which includes every twist and turn of the project means my okole is well covered.
That said, my client is a good guy and is in a tough situation, so I'm not going to take extreme measures if he doesn't pay me every dime owed. On the other hand, I've got bills to pay too.
I like the concept of approaching the new owners as a "potential" client. If they like the plan currently in permit review, they can choose to go with it. They could also decide to start from scratch with another architect - entirely up to them.
Property with permitted plans is more valuable - we have gone through the variance process and been approved for increasing the height limits. But I see now that this increased value accrues to the property, not the architectural plans.
Bottom line; I'll focus on getting paid by my present client, and work something out with the new owners should they decide to continue with my services. I won't expect to be paid for the plans as part of the sale.
If the new owners decide to go with the new design as-is with minor modifications, should I charge them only for my time spent making changes to the drawings, or should I be charging them for my stamp as well? And since the seller is no longer buying my stamp, as it were, shouldn't he see a reduction in what he owes me?
Which leads to a fundamental issue: what portion of my fee covers my stamp - meaning my office taking responsibility for the accuracy/buildability of the design? This is one aspect of the practice of Architecture that I have never had a firm grasp of; I'd really like to get it right, out of fairness to my clients.
Much thanks for your help, mx2! |
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mx2
millennium club
Joined: 18 Jan 2006
Posts: 1977
Location: Miami, Florida
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| Posted: Thu Feb 09, 2006 2:22 pm Post subject: |
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Howzit, howzit? They still have that beer out there?
Ever hear of C&K...now I'm reminiscing...sorry.
Ahem, back to work, uh, yes....first, you got it down. So with the stamp, it's really up to you but the way we deal with it is in the fact that once you sign and seal, you're liable forever....unlike contractors, who are liable for up to 3 years or something like that. The main reason being is if you dig up a set of plans form the building deprtment, your name is on the drawings...so the sharks come after you! No one remembers who built it...crazy really.
So, we expect payment as soon as we deliver S&S drawings. If we have a picky, stubborn, cheap client...we require payment up front. Because once we submit, (and this has happened) they can drag their feet forever and even not pay...forcing you to go to court, etc, etc. Even on small jobs, you should get paid for that seal you worked hard for and not just any "malihini" just showing up...add a fee for stamping ($500 or $1,000) on top of your work. So bottom line, you have no control as to what the client does after you stamped, so I think its fair to say you got paid for full architectural services rendered.
As for reduction for the potential client, that's up to you. You have the advantage of proposing reduced fee for the work already done, but then what if they change the scope (add new work, re-design)...in truth and I think even legally, I'm certain, the change of ownership means the plans would *have* to be re-submitted anyway, with the new owner listed. That means you would have to re-stamp them at which point you re-negotiate the fee. I hardly see how you could expect to be liable for any problems, accuident, errors or omissions that could lead to construction problems, injury, or even death...and just be paid for your stamp. You're stamping your responsibility on it also...it's really best to start over, and reduce your fee if you convince the client to stick to the "general" layout and design. That's what I would do. It sounds like you should get an AIA copy of the B-series (owner-architect), if you dont already...actually you could probably check it out from the library (UH maybe) and I know you can order the contracts you need online (Google it) Anyway they answer a lot of these questions and it's been recommended that even if you don't use them, to incoporate some of the language...for example one problem we've had is that if we do NOT incorporate the note "we retain the right to legal action in the case of a dispute"...then we can not sue. Found that out the hard way. So much...just so much, learning ever day really. Anyway hope it helps, a little. Besides, always verify what others say anyway, don't take my word for it.
Peace and aloha brah...
mx2
_________________
*Art of Architecture: The conscious use of skill and creative imagination in the production of an aesthetic building.
*Science of Architecture: The calculated use of technical skill and knowledge in the construction of a functional building. |
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dglynnarch
Joined: 08 Feb 2006
Posts: 4
Location: Honolulu, Hawaii
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| Posted: Fri Feb 10, 2006 1:29 am Post subject: They still have that beer out there? |
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If you mean Primo, I don't think so; last I heard, they were brewing it in LA. Maybe now it's available only on the mainland...
C& K are still rocking; Ceilio & Kapono are doing well, still very popular. Henry Kapono was operating a very nice bar at the Aloha Tower until recently. He decided he'd had enough of operating an establishment and moved on, apparently.
Thanks again for your wisdom, obviously coming from much experience. Do you run your own firm? Sole proprietor?
Where are you operating - Miami?
'Ats a long way from Maui, brah...!
Hang loose,
DG |
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mx2
millennium club
Joined: 18 Jan 2006
Posts: 1977
Location: Miami, Florida
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| Posted: Fri Feb 10, 2006 6:39 am Post subject: |
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Primo! That's it...."hey howzit, howzit! Arf!" I didn't really like it anyway..haha but the commercial stuck in my head. Go figure.
As for experience, I graduated 10 years ago, been working my butt off ever since at a couple of firms around Miami, yes...been putting off getting my license as I feel I need *more* experience, although I do think its time now. By working in a small firm for so long (tried the large firm for a couple of years too) I had to be involved in so many different aspects, including the business end with great bosses who have combined over 60 years under their belt and skills and knowledge I have not yet mastered. I think that's part of my problem is that I keep trying to catch up...a never ending task. 
It's definitely a long way from the islands (although we have the Caribbean down here..haha) and I'll let you in on some privvy info, Cecilio is my uncle, mom's older brother. An my mom lived in Waipahu for several years and its why I got a chance to visit. She moved to Cali when my little brother was only speak pijun and was starting to get into trouble a lot...hahaha! As for Cee, he's doing much better now, since...well, since moving on, you know. Been working very hard at his music and working it out with Henry, obviously they need each other. Glad to see that. Anyway, I hardly ever see or talk to him and most of the family moved to the mainland...but someday would love to come out again. Such a great place...love Hawaii...
anyway, shaka brah...good luck with da kine houses man...and always CYO...cover your okole!
mx2
_________________
*Art of Architecture: The conscious use of skill and creative imagination in the production of an aesthetic building.
*Science of Architecture: The calculated use of technical skill and knowledge in the construction of a functional building. |
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dglynnarch
Joined: 08 Feb 2006
Posts: 4
Location: Honolulu, Hawaii
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| Posted: Fri Feb 10, 2006 4:36 pm Post subject: hey howzit, howzit! Arf! |
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| mx2 wrote: | | Primo! That's it...."hey howzit, howzit! Arf!" I didn't really like it anyway..haha but the commercial stuck in my head. Go figure. |
Yeah - those were the bestest commercials 
| mx2 wrote: | | As for experience, I graduated 10 years ago, been working my butt off ever since at a couple of firms around Miami, yes...been putting off getting my license as I feel I need *more* experience, although I do think its time now. By working in a small firm for so long (tried the large firm for a couple of years too) I had to be involved in so many different aspects, including the business end with great bosses who have combined over 60 years under their belt and skills and knowledge I have not yet mastered. I think that's part of my problem is that I keep trying to catch up...a never ending task. |
So you still one young buggah, ya? Good for you - sounds like you got a good head on top your body. Don't wait to get your license; the farther you get from school, the harder it is to take all the exams. I know - some ole futs like me (close to 50 years old!) are studying to take the exam - pure torture! I took it right out of school (early 80s) thank goodness.
| mx2 wrote: | | It's definitely a long way from the islands (although we have the Caribbean down here..haha) and I'll let you in on some privvy info, Cecilio is my uncle, mom's older brother. An my mom lived in Waipahu for several years and its why I got a chance to visit. She moved to Cali when my little brother was only speak pijun and was starting to get into trouble a lot...hahaha! As for Cee, he's doing much better now, since...well, since moving on, you know. Been working very hard at his music and working it out with Henry, obviously they need each other. Glad to see that. Anyway, I hardly ever see or talk to him and most of the family moved to the mainland...but someday would love to come out again. Such a great place...love Hawaii... |
Too cool! That makes you Hawaiian-kine royalty, you know!! Thanks for sharing that; I'm a musician too - used to play with some guys that hung out with Brother Nolan - so is cool to hear the update about Cecilio. He's got a gig for life if he sticks with Henry - those guys have a huge following.
| mx2 wrote: | anyway, shaka brah...good luck with da kine houses man...and always CYO...cover your okole!
mx2 |
Hang loose, brah! If you ever come to Hawaii, be sure and let me know.
Aloha,
D |
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mx2
millennium club
Joined: 18 Jan 2006
Posts: 1977
Location: Miami, Florida
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| Posted: Fri Feb 10, 2006 5:31 pm Post subject: |
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You've got mail.\
mx2
_________________
*Art of Architecture: The conscious use of skill and creative imagination in the production of an aesthetic building.
*Science of Architecture: The calculated use of technical skill and knowledge in the construction of a functional building. |
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